Employment Growth and Labour Market Flexibility in OECD Countries

Jaakko Kiander and Matti Virén

No 184, Discussion Papers from VATT Institute for Economic Research

Abstract: This paper investigates the adjustment of employment to population shocks in 22 OECD countries over the period 1960 - 1997. Most of the countries have experienced significant population shocks during that period. The speed of adjustment parameter is used as a measure of the functioning of the labour market. If the OECD countries are compared using this measure, it turns out that the Anglo Saxon countries clearly outperform the other (European) countries in terms of labour market adjustment. In the case of the Nordic countries, the results presented are the most extreme. In practically all countries, the functioning of the labour market seems to have deteriorated over time. These observations seem to be helpful in explaining for behaviour of unemployment rates in the OECD area. It also turns out that there are inter-country differences in how population shocks affect open unemployment. In most countries unemployment has increased after the population growth has slowed.

Keywords: Employment; population shocks; monetary union; International comparisons; Kansainväliset vertailut; Labour market; Työmarkkinat; Taxation and Social Transfers; Julkisen talouden rahoitus ja tulonsiirrot; J210 - Labor Force and Employment; Size; and Structure (by industry; occupation; demographic characteristics; etc.) (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (2)

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