DP958 Unemployment Persistence and the Unemployment-Productivity Relation

Author(s): Dennis J. Snower
Publication Date: July 1994
Keyword(s): Inflation, Productivity, Unemployment, Unemployment Persistence
JEL(s): E31, E32, J23, J31, J64, O50
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=958

This paper explores the interrelation between the degree of unemployment persistence and the unemployment-productivity trade-off. The analysis suggests that the more effective are structural labour market policies (designed to change labour market institutions and laws, such as job security legislation) in making wages and prices more responsive to current unemployment and making unemployment less persistent, the less effective will be the growth-promoting supply-side policies (such as training schemes) in reducing unemployment.