Title: Structural Unemployment: Spain versus Portugal
Abstract:The increase in European unemployment over the last two decades has made clear that the natural rate of unemployment is all but natural, and all but constant. A considerable body of research has explo...The increase in European unemployment over the last two decades has made clear that the natural rate of unemployment is all but natural, and all but constant. A considerable body of research has explored the determinants of what is now and more appropriately called the structural rate of unemployment. Much of this research was summarized in the book by Richard Layard et al. (1991). This year has seen two new and important contributions: an in-depth empirical study by the Organization for Economic Cooperation and Development OECD, 1994), and a theoretical exploration by Edmund Phelps (1994). How much closer are we to understanding the differences in structural rates across countries, and their movements over time? To answer those questions, we decided to take up what may be the biggest empirical challenge facing theories of structural unemployment, the dramatic difference in the unemployment experiences of Portugal and Spain. Both countries have had a remarkably similar history over the last 20 years. Yet one, Spain, has the highest unemployment rate in the European Union, 24.4 percent, while the other, Portugal, has-save for Luxembourg-the lowest one, 6.8 percent. This paper presents our conclusions. A short summary is that humility and more research are in order.Read More
Publication Year: 1995
Publication Date: 1995-01-01
Language: en
Type: article
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Cited By Count: 163
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