Unemployment, inquality and the policy of Europe: 1984-2000

James K. Galbraith () and José Enrique Garcilazo
Additional contact information
James K. Galbraith: The University of Texas at Austin, The Lyndon B. Johnson School of Public Affairs, Austin (USA)

BNL Quarterly Review, 2004, vol. 57, issue 228, 3-28

Abstract: This paper reconsiders the problem of unemployment in Europe at multiple geographic levels and through time from 1984 to 2000. We employ a panel structure that permits us to separate regional, national and continental influences on Europeanunemployment. Important local effects include the economic growth rate, relative wealth or poverty, and the proportion of young people in the labor force. As part of this analysis, we assess the relationship between pay inequality and unemployment in Europe, following the insight of Harris and Todaro (1970) that pay inequalities influence job search. With our own panel of inequality measures derived from Eurostat's REGIO data set, we find that higher pay inequality, though usually taken to indicate greater labor market flexibility, is associated with more, not less,unemployment. Among large countries distinctive effects at the national level are few, perhaps indicating that national labor market institutions are not a decisive factor in the determination of unemployment. Changes in the macro-environment are picked up by time fixed effects, and these show a striking pan-European rise inunemployment immediately following the Maastricht Treaty, though with some encouraging recovery late in the decade.

Keywords: Pay; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 J31 J64 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9820/9705 (application/pdf)

Related works:
Journal Article: Unemployment, inquality and the policy of Europe: 1984-2000 (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:psl:bnlaqr:2004:11

Ordering information: This journal article can be ordered from
http://www.economiacivile.it

Access Statistics for this article

BNL Quarterly Review is currently edited by Alessandro Roncaglia

More articles in BNL Quarterly Review from Banca Nazionale del Lavoro
Bibliographic data for series maintained by Carlo D'Ippoliti ().