DP949 Some Political Aspects of Unemployment

Author(s): Gilles Saint-Paul
Publication Date: May 1994
Keyword(s): Exclusion, Firing Costs, Fiscal Conservatism, Labour Market Flexibility, Political Reform, Protection, Unemployment
JEL(s): E24, E6, J6, J65, Z00
Programme Areas: International Macroeconomics, Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=949

We study a number of mechanisms through which an economy can be stuck at a high unemployment equilibrium because a poor labour market is associated with support for poor policy. These mechanisms are consistent with the relative scarcity of measures that have been undertaken to cure unemployment. The message of the paper is that curing the European unemployment problem is a difficult task because a lot of skill is required to avoid political pitfalls.