What Can Changes in Structural Factors Tell Us About Unemployment in Europe?

48 Pages Posted: 27 Feb 2003

See all articles by Julian Benedict Morgan

Julian Benedict Morgan

European Central Bank (ECB)

Annabelle Mourougane

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO)

Date Written: October 2001

Abstract

This paper examines the impact of temporal variation in labour market institutions and other structural factors on unemployment in Europe. These include the influence of trade unions, social security benefits, employment security, mismatch between job seekers and vacancies, the minimum wage and factors which drive a wedge between consumer and producer prices. With this aim, a system including a labour demand and a wage equation is estimated on pooled time-series data for the six largest EU countries for the 1980s and 1990s, allowing for country-specific fixed-effects, institutional effects and adjustment terms. Our estimates suggest that changes in regional mismatch, trade union density and the ratio between consumer and producer prices are positively associated with structural unemployment. This result is robust to a wide variety of different specifications of the model, including a larger sample of eight EU countries. No consistent role is found for the other institutional factors.

Keywords: structural unemployment; labour market institutions; panel estimation

JEL Classification: E24, J30, C33

Suggested Citation

Morgan, Julian Benedict and Mourougane, Annabelle, What Can Changes in Structural Factors Tell Us About Unemployment in Europe? (October 2001). Available at SSRN: https://ssrn.com/abstract=356240 or http://dx.doi.org/10.2139/ssrn.356240

Julian Benedict Morgan (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
0049 69 13440 (Phone)
0049 69 1344 6000 (Fax)

Annabelle Mourougane

Organization for Economic Co-Operation and Development (OECD) - Economics Department (ECO) ( email )

2 rue Andre Pascal
Paris Cedex 16, MO 63108
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
136
Abstract Views
1,566
Rank
335,988
PlumX Metrics