Monastiriotis, Vassilis (2006): Macro-determinants of UK regional unemployment and the role of employment flexibility. Published in: European Institute Working Paper Series No. No 2006-01 (March 2006): pp. 1-40.
Download (694Kb) | Preview
This paper explores the macroeconomic determinants of UK regional unemployment and their relation to the influences on unemployment exerted by the levels and types of employment flexibility in the country. Theoretically the paper draws on Keynesian and monetarist explanations of unemployment and elaborates on how the two main theoretical approaches perceive the role of price stability, accumulation, macroeconomic shocks and labour market rigidities for unemployment. Empirically, the analysis relies on a novel set of flexibility indicators and examines their impact on regional unemployment, unemployment persistence, and adjustment to economic shocks. The results provide useful insights into the explored relationships and highlight the areas and conditions under which employment flexibility helps achieve favourable employment outcomes. The implications of the findings are discussed in the concluding section.
|Item Type:||MPRA Paper|
|Original Title:||Macro-determinants of UK regional unemployment and the role of employment flexibility|
|Keywords:||Employment flexibility; regional unemployment; persistence; NAIRU and Keynesian explanations of unemployment|
|Subjects:||R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Production Analysis, and Firm Location > R38 - Government Policy; Regulatory Policy
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes; Keynesian; Post-Keynesian
|Depositing User:||Vassilis Monastiriotis|
|Date Deposited:||29. Sep 2006|
|Last Modified:||12. Feb 2013 15:48|
Addison J. and B. Hirsch (1997), “The economic effects of employment regulation: what are the limits?”, in B. Kaufman (ed.), Government Regulation of the Employment Relationship, IRRA Fiftieth Anniversary Volume, Industrial Relations Research Association, Cornell University Press, Ithaca. Adsera A. and C. Boix (2000), Must we choose? European unemployment, American inequality, and the impact of education and labour market institutions, European Journal of Political Economy, 16, pp.611-638. Amisano G. and M. Serati (2003), What goes up sometimes stays up: shocks and institutions as determinants of unemployment persistence, Scottish Journal of Political Economy, 50 (4), pp.440-470. Arulampalam W. and A. Booth (1998), Training and labour market flexibility: is there a trade-off?, British Journal of Industrial Relations, 36 (4), pp.521-536. Atkinson J. (1984), Flexibility, Uncertainty and Manpower Management, IMS Report No89, Institute of Manpower Studies, Brighton. Atkinson J. and N. Meager (1986), Changing Working Patterns: how companies achieve flexibility to meet new needs, Institute of Manpower Studies, National Economic Development Office, London. Baker D., A. Glyn, D. Howell and J. Schmitt (2002), Labor market institutions and unemployment: a critical assessment of the crosscountry evidence, CEPA Working Paper 2002-17. Beatty C., S. Fothergill and R. Macmillan (2000) A theory of employment, unemployment and sickness, Regional Studies, 34 (7), pp.617-630. Belot, M. and J. Van Ours (2000), Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labour market reforms?, IZA Discussion Paper 147. Bertola, G., F. Blau and L. Kahn (2002), Comparative analysis of labor market outcomes: lessons for the United States from international long–run evidence, pp.159-218 in A. Krueger and R. Solow (eds), The Roaring Nineties: Can Full Employment be Sustained?, Russell Sage Foundation, New York. Blackaby D. and P. Murphy (1995), Earnings, unemployment and Britain's North-South divide: real or imaginary?, Oxford Bulletin of Economics and Statistics, 57 (4), pp.487-512. Blanchard O. and J. Wolfers (2000), The role of shocks and institutions in the rise of european unemployment: the aggregate evidence, Economic Journal, 110, pp.C1-C33. Blanchflower D. and A. Oswald (1994), The Wage Curve, MIT Press, Cambridge. Brosnan P. and P. Walsh (1996), “Plus ca change…: The Employment Contracts Act and non-standard employment in New Zealand, 1991-1995”, Industrial Relations Centre Working Paper No4/96, Victoria University, Wellington. Burchell B., D. Day, M. Hudson, D. Ladipo, R. Mankelow, J. Nolan, H. Reed, I. Wichert and F. Wilkinson (1999), Job Insecurity and Work Intensification: flexibility and the changing boundaries of work, Joseph Rowntree Foundation, YPS, UK. Buyers J. (1991), Testing for common trends in regional unemployment, Applied Economics, 23 (6), pp.1087-1092. Chapman P. (1991), The dynamics of regional unemployment in the UK, 1974-89, Applied Economics, 23 (6), pp.1059-1064. Davidson P. (1994), Post-Keynesian Macroeconomic Theory, Elgar, Cheltenham. Davidson P. (1998), ‘Post-Keynesian employment analysis and the macroeconomics of OECD unemployment’, Economic Journal, 108(448), pp.817-831. Dawes L. (1993), Long-term Unemployment and Labour Market Flexibility, Centre for Labour Market Studies, University of Leicester. Elmeskov J., J. Martin and S. Scarpetta (1998), Key lessons for labour market reforms: evidence from OECD countries' experiences, Swedish Economic Policy Review, 5 (2), pp.205-252. Fitoussi, J., D. Jestaz, E. Phelps and G. Zoega (2000), Roots of the recent recoveries: labor reforms or private sector forces?, Brookings Papers on Economic Activity, 1, pp.237–291. Gallie D., M. White, Y. Cheng and M. Tomlinson (1998), The flexible workforce? the employment conditions of part-time and temporary workers, ch.6 in D. Gallie, M. White, Y. Cheng and M. Tomlinson, Restructuring the Employment Relationship, Oxford University Press, Oxford. Gray D. (2004), Persistent regional unemployment differentials revisited, Regional Studies, 38 (2), pp.167-176. Grubb D. and W. Wells (1993), Employment regulation and patterns of work in EC countries, OECD Economic Studies, 21, pp.7-58. Hall P. and D. Soskice (2001), Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford University Press, Oxford. Hart P. (1990), Types of structural unemployment in the United Kingdom, International Labour Review, 129 (2), pp.213-228. Hoon H. and E. Phelps (1992), Macroeconomic shocks in a dynamized model of the natural rate of unemployment, American Economic Review, 82 (4), 889–900. Martin R. (1997), Regional unemployment disparities and their dynamics, Regional Studies, 31 (3), pp.237-252. McCormick B. (1997), Regional unemployment and labour mobility in the UK, European Economic Review, 41, pp.581-589. Michie J. and M. Sheehan (2003), Labour market deregulation, ‘flexibility’ and innovation, Cambridge Journal of Economics, 27 (1), pp.123-143. Monastiriotis V. (2003), A panel of regional indicators of labour market flexibility: the UK, 1979-1998, Department of Economics Discussion Paper No 03/01, Royal Holloway. Monastiriotis V. (2004), Employment flexibility and UK regional unemployment: persistence and macroeconomic shocks, paper prepared for the DTI/EMAR Research Programme on Labour Market Flexibility. Nickell S. (1997), Unemployment and labour market rigidities: Europe versus North America, Journal of Economic Perspectives, 11(3), pp.55–74. Nickell S. (1998) Unemployment: questions and some answers, Economic Journal, 108, pp.802-816. Nickell S. and R. Layard (1999), Labour market institutions and economic performance, pp.3029-3084 in Handbook of Labour Economics. Nickell S., L. Nunziata, W. Ochel and G. Quintini (2002), The Beveridge Curve, unemployment and wages in the OECD from the 1960s to the 1990s, pp.394-431 in P. Aghion, R. Frydman, J. Stiglitz and M.Woodford (eds), Knowledge, Information, and Expectations in Modern Macroeconomics: Essays in Honor of E.S. Phelps, Princeton University Press. Nunziata L. (2002), Unemployment, labour market institutions and shocks, Nuffield College Working Papers in Economics 2002-16. Ozaki M. (ed) (1999), Negotiating flexibility: The role of the social partners and the state, International Labour Office, Geneva. Phelps E. (1994), Structural Slumps: The Modern Equilibrium Theory of Unemployment, Interest and Assets, Harvard University Press, Cambridge. Pissarides C. (1990), Equilibrium Unemployment Theory, Basil Blackwell, Oxford. Pollert A. (1991), “The orthodoxy of flexibility”, ch.1 in A. Pollert (ed), Farewell to Flexibility?, Basil Blackwell. Scarpetta S. (1996), Assessing the role of labour market policies and institutional settings on unemployment: a cross country study, OECD Economic Studies, 26, pp.43–98. Solow R. (1998), What is labour-market flexibility? What is it good for?, Keynes Lecture in Economics, Proceedings of the B itish Academy, 97, pp.189-211. Stockhammer E. (2004a), Explaining European unemployment: testing the NAIRU theory and a Keynesian approach, International Review of Applied Economics, 18(1), pp.1-26. Stockhammer E. (2004b), The rise of European unemployment: a synopsis, Political Economy Research Institute Working Paper No76, University of Amherst. Weiss C. (2001), On flexibility, Journal of Economic Behavior and Organization, 46, pp.347-356.