The Swiss "Job Miracle"

Michael Graff, Massimo Mannino and Michael Siegenthaler

No 14-368, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: While Switzerland's recent growth of employment was high in historical and international perspective, the reasons for this "job miracle" were not well understood. As the "miracle" was not anticipated by economic forecasters, it consequently resulted in systematic and persistent forecast errors. This paper shows that the "miracle" is related to a substantial increase in the labor intensity of economic activity. To this end, we present a number of stylized facts reflecting shifts and structural changes that affected the Swiss economy around 2000. Then, we discuss potential drivers of the "miracle" which are consistent with these facts. Finally, we demonstrate how they contribute to understand why, during the last ten years, forecasters systematically underestimated the growth of domestic employment. Finally, we highlight that immigration was not only a consequence of the "miracle", but also an important cause, as it created additional jobs in Switzerland by raising local demand for goods and, most importantly, services.

Keywords: KOF-Key-arbeitsmarkt (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-12
New Economics Papers: this item is included in nep-lab, nep-lma, nep-mac and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:14-368

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