Unemployment and inequality
No FS I 95-303, Discussion Papers, Research Unit: Economic Change and Employment from WZB Berlin Social Science Center
Analysis of contemporary unemployment has increasingly focussed on the position of the least skilled. The deterioration in their labour market position is first situated in the context of structural trends in the labour market. The development of labour market inequality in the 1980s is summarised and the deteriorating employment position of the unskilled, both in terms of registered unemployment, withdrawal from the labour market and falling relative earnings is documented. Explanations for these trends are discussed, with the distinction being drawn between those which focus on changes in technology and trade patterns and those which see declining overall demand for labour as the primary factor. Alternative policy responses are surveyed, with emphasis on their distributional implications.
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