What Hides Behind An Unemployment Rate: Comparing Portuguese and Us Unemployment
Pedro Portugal and
Olivier Blanchard ()
Working Papers from Banco de Portugal, Economics and Research Department
Over the last 15 years, Portugal and the United States have had the same average unemployment rate, about 6.5%. But behind these similar rates hide two very different labor markets. Unemployment duration in Portugal is more that three times that of the United States. Symmetrically, the flow of workers into unemployment in Portugal is, in proportion to the labor force, less than a third of what it is in the United States. Relying on evidence from Portuguese and U.S. micro data sets, we show that these lower flows come in roughly equal proportions form lower job flows, and from lower worker flows relative to job flows. We then argue that these differences plausibly come from high employment protection in Portugal. We finally show how, looking across countries, higher employment protection is associated with lower flows and higher unemployment duration. In short, high employment protection makes economies more sclerotic; but because it affects unemployment duration and flows in opposite directions, it has an ambiguous effect on the unemployment rate.
JEL-codes: E2 J3 (search for similar items in EconPapers)
References: Add references at CitEc
Citations: View citations in EconPapers (30) Track citations by RSS feed
Downloads: (external link)
Working Paper: What Hides Behind an Umemployment Rate: Comparing Portuguese and U.S. Unemployment (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w199803
Access Statistics for this paper
More papers in Working Papers from Banco de Portugal, Economics and Research Department Contact information at EDIRC.
Bibliographic data for series maintained by DEE-NTD ().