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Can Insider-Outsider Theories Explain the Persistence of Unemployment? An Econometric Study of Two British Industries

Gail C Mulvey

The Manchester School of Economic & Social Studies, 1997, vol. 65, issue 2, 170-91

Abstract: Using industry-specific and aggregate data for the period 1952-85, this paper focuses on the potential of the insider-outsider explanation of unemployment to account for the differing economic performance of two British industries, electrical engineering and motor vehicles. The former industry experienced a steady expansion in this period while the latter was in relative decline. Although hysteresis was found to be somewhat greater in the motor vehicle industry, insider power was rejected both as a cause of the persistence of unemployment and as an explanation of that industry's contraction. Copyright 1997 by Blackwell Publishers Ltd and The Victoria University of Manchester

Date: 1997
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