Long-Term Unemployment and the Great Recession in the Netherlands: Economic Mechanisms and Policy Implications

Marloes Graaf-Zijl (), Albert Horst (), Daniel van Vuuren, Hugo Erken () and Rob Luginbuhl

De Economist, 2015, vol. 163, issue 4, 415-434

Abstract: A decomposition of GDP changes during the Great Recession shows that a relatively large part of the economic shock in the Netherlands translated into unemployment. Wages absorbed a larger part of the shock in Germany, the UK, and the US. The Netherlands has faced more long-term unemployment than other countries, particularly in recent years. Long-term unemployed workers are on the margins of the Dutch labour market. Neither real wages nor the number of vacancies respond to an increasing rate of long-term unemployment. Long-term unemployment is for an important part a problem of older unemployed workers. In the Netherlands, 40 % of the long-term unemployed workers are over age 50, which is almost twice as much as in the EU and the US. We identify three possible avenues for labour market reform: unemployment insurance, employment protection legislation and active labour market policies. Copyright Springer Science+Business Media New York 2015

Keywords: Long-term unemployment; Great Recession; Wage adjustment; Unemployment insurance; Labour market institutions; E20; E24; J63; J69 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s10645-015-9263-y

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