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Institute for International Economic Studies, Stockholm University Seminar Papers, Institute for International Economic Studies, Stockholm University

No 616:
The European Employment Problem

Assar Lindbeck ()

Abstract: How do we explain the poor employment performance in Western Europe since about the mid-1970s? This question is in fact twofold: what initiated the dramatic rise in unemployment, and what mechanisms have made it continue for so long? My attempts to answer these questions form the basis for a discussion of various policy options. A main point of the paper is the complex interaction, often in the form of complementarities, between different explanatory factors behind the West European employment problem.

Unfortunately, this complexity makes it difficult to test and estimate attempted explanations. Moreover, the complementarities between different factors often preclude any positive effects of isolated policy actions on the employment situation; a battery of policy actions seems necessary.

Keywords: unemployment; policy; (follow links to similar papers)

JEL-Codes: E24; (follow links to similar papers)

25 pages, October 29, 1997

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