The Unemployment Challenge in Europe

Arbeitslosigkeit; Arbeitsmarktpolitik; Langzeitarbeitslosigkeit; Ungelernte Arbeitskräfte; EU-Politik; EU-Staaten

Poverty and Worklessness in Britain

Relative poverty in the UK has risen massively since 1979 mainly because of increasing worklessness, rising earnings dispersion and benefits indexed to prices, not wages. So poverty is now at a very high level. The economic forces underlying this are the significant shift in demand against the unskilled which has outpaced the shift in relative supply in the same direction. This has substantially weakened the low-skill labour market which has increased both pay dispersion and worklessness, particularly among low-skilled men. The whole situation has been exacerbated by the very long tail in the skill distribution, so that over 20 per cent of the working age population have very low skills indeed (close to illiterate). Practical policies discussed include improving education and overall well-being for children in the lower part of the ability range, raising wage floors, New Deal policies, tax credits and benefits for the workless. Overall, I would argue that without reducing the long tail in the skill distribution, there is no practical possibility of policy reducing relative poverty to 1979 levels.Poverty, Worklessness, Wage dispersion, Disability

Patterns of Work Across the OECD

Market work per person of working age differs widely across the OECD countries and there have been some significant changes in the last forty years. How to explain this pattern? Taxes are part of the story but much remains to be explained. If we include all the elements of the social security systems like early retirement benefits, sickness and disability benefits and unemployment benefits, then we can capture some aspects of the overall pattern but still a lot remains unexplained. The story favoured by Alesina et al. (CEPR DP.5140, 2005) is that the nexus of strong unions, generous welfare and social democracy implies both high taxes and pressure in favour of work-sharing in response to adverse shocks. This story, however, falls foul of the simple fact that most Scandinavian countries now do much more work than the French and Germans despite having stronger unions, more generous welfare, higher taxes and more social democracy. Ultimately, we are forced into the position that there is no simple story. Some of the broad patterns can be explained but there remain country specific factors which are hard to identify but lead to substantial differences from one country to another.work, working hours, employment

Wages

Empirical analyses of longitudinal data on some 66 manufacturing companies on Britain lead us to the following three conclusions. First, agreed reductions in restrictive work practices lead to increases in productivity. Second, controlling for such agreed reductions, there is some weak evidence that both relative pay and aggregate labour market slack have some positive impact on productivity. Third, falls in market share or declines in the financial health of companies lead to both lower pay rises and reductions in restrictive practices.