Why Are European Countries Diverging in Their Unemployment Experience? During the nineties, unemployment has fallen in a number of European countries while it has remained high in others. The paper discusses potential causes for that evolution in light of recent economic research, emphasizing obstacles to reform due to political constraints, the prevalence of ideology, and agency issues within ...

The paper elucidates the relationship between housing tenure, regional mobility and unemployment. It develops a model that can explain the paradoxical empirical regularity that higher owner occupation rates are associated with higher levels of unemployment although homeowners tend to be unemployed less often. The choice of housing tenure affects moving costs and thereby regional mobility and un...

Should unemployment benefits be paid indefinitely at a fixed rate or should it decline (or increase) over a worker’s unemployment spell? We examine these issues using an equilibrium model of search unemployment. The model features worker-firm bargaining over wages, free entry of new jobs, and endogenous search effort among the unemployed. The main result is that an optimal insurance program imp...

The NAIRU is the rate of unemployment consistent with stable inflation... An important challenge in setting economic policy is to identify the rate of capacity utilisation that is sustainable, in the sense that it is associated with reasonably stable inflation. There are different ways of measuring capacity utilisation. Looking at perhaps the most common measure, unemployment, this idea of sust...

Extensions of unemployment insurance (UI) benefits have been implemented in response to the Great Recession. This paper measures the effect of these extensions on the unemployment rate using a calibrated structural model featuring job search and consumption-saving decisions, skill depreciation, and UI eligibility. The ongoing UI benefit extensions are found to have raised the unemployment rate ...

This paper considers the potential effects of the government's Welfare to Work policy on general practitioner (GP) working patterns, and aims to explore the relationship between unemployment, ill health, and GP sickness certification. Social security and employment policy initiatives are discussed in relation to the literature on the relationship between unemployment and ill health, sociologica...

We study the response of domestic unemployment rates to shocks in total factor productivity for economies with high capital mobility and low labour mobility. We show that high capital mobility amplifies the impact on the domestic unemployment rate of domestic fluctuations in total factor productivity, shortens the lag of the response to shocks and raises the variability of unemployment. But ave...

This paper develops new estimates of flows into and out of unemployment that allow for unobserved heterogeneity across workers as well as direct effects of unemployment duration on unemployment-exit probabilities. Unlike any previous paper in this literature, we develop a complete dynamic statistical model that allows us to measure the contribution of different shocks to the short-run, medium-r...

This paper examines the dynamic effects of government outlays on economic growth and the unemployment rate. Using vector autoregression and data from twenty OECD countries over three recent decades, we found: (1) positive shocks to government outlays slow down economic growth and raise the unemployment rate; (2) different types of government outlays have different effects on growth and unemploy...

This paper studies the connection between the stock market and the unemployment rate. I establish three facts. First, the log of the real value of the S&P 500 and the log of a logistic transformation of the unemployment rate are non-stationary cointegrated series. Second, the stock market Granger causes the unemployment rate. Third, the connection between changes in the real value of the stock ...