Most countries in the European Union have experienced a steady increase of unemployment over the past decades. Figure 2.1 illustrates this fact by showing the average unemployment rate for the 15 countries of the European Union (EU 15) together with the unemployment rate of West Germany and the United States. In most years, West Germany’s unemployment rate was lower than the one of the EU 15 countries. The development however was analogous to that of the EU 15 countries. The experience of the European Union is contrasted by the development in the United States. The unemployment rate of the United States grew to almost 10% in 1980, but declined from then onwards with the exception of the short period between the late 80’s to the early 90’s.
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- 1.See e. g. Lawrence and Slaughter (1993) for this line of argumentation.Google Scholar
- 2.See e. g. Wood (1995), Sachs and Shatz (1996), or Richardson (1995) for the trade argument. Since the Stolper-Samuelson theorem relates the product prices to the wages, most empirical studies focus on the effects of technical progress or international trade on wages. See e.g. FitzRoy and Funke (1996), Lücke (1997). Fitzenberger (1996) and Learner (1996a) consider the effects of technical progress and international trade on the wages. See also Paqué (1997). In contrast, Wood (1994) presents a number of empirical studies using the method of the factor contents of trade to estimate the effects of trade on the demand for unskilled workers in industrialised countries.Google Scholar
- 3.See e.g. Krugman (1995) or Fitzenberger (1996) for a description of the argument.Google Scholar
- 4.The average duration of unemployment is measured by the ratio of the average stock of unemployed persons and the flow out of unemployment. The average duration increased from 3.46 months in 1980 to 7.37 in 1985 (data from Bundesanstalt für Arbeit, own calculation). See also Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (1994, ch. 5) for a detailed discussion in this context for Germany.Google Scholar
- 5.The matching function for the United States has been estimated by Blanchard and Diamond (1989). For the matching function of the United Kingdom see e.g. Pissarides (1986), for the one of Israel see e.g. Berman (1997) or Yashiv (1995).Google Scholar
- 6.For a detailed description see Burda and Wyplosz (1994).Google Scholar
- 7.See e. g. Franz and Siebeck (1991) for a foundation of the Beveridge curve.Google Scholar
- 8.For the Beveridge curve of the United States see Blanchard and Diamond (1989).Google Scholar
- 9.See Franz (1991) for the method of correction.Google Scholar
- 10.See e.g. Freytag, Meier, and Weiß (1998) for export in percent of the gross domestic product of various developing and newly industrialised countries.Google Scholar
- 11.See e.g. Wood (1994) for an overview.Google Scholar
- 12.See e. g. Sachs and Shatz (1996) for examples in which the trade between industrial and developing countries lead to effects on the labour market even in absence of terms-of-trade changes.Google Scholar