Labour supply, the natural rate, and the welfare state in The Netherlands: the wrong institutions at the wrong point in time

Broersma, Lourens; Koeman, J.H.; Teulings, Coen N.

doi:10.1093/oep/52.1.96

Cited by 15 publications

(16 citation statements)

References 3 publications

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“…8, suggests that β 12 < 0 for both countries. Previous results are mixed, but our findings reinforce evidence of a negative relationship between productivity and the NAIRU in both countries (Broersma et al 2000;Hatton 2007).…”

Section: Hysteresis Hypothesissupporting

confidence: 66%

“…In the Netherlands, panel (b), unemployment describes a J-curve, and after an initial fall it stabilizes at a rate 2% greater than its baseline, although this rise is only marginally significant. Layard et al (1991, p. 441), Nickell and Bell (1995), Broersma et al (2000) and Gianella et al (2008) also find that unemployment benefits increase the NAIRU in both countries. Figure 11c shows that in the UK, the grr-shock causes a larger fall in productivity than in real wages for the first 8 quarters, which feeds into higher unemployment through the positive coefficient ofξ 2,t−1 , see Table 3.…”

Section: Unemployment and Lmimentioning

confidence: 94%

“…It is usually argued that Labour Market Institutions (LMI) can explain the evolution of unemployment in these economies since the 1980s (Nickell 1998;Nickell and Ours 2000;Broersma et al 2000). These authors argue that high-trade union power, generous benefits systems and high taxation contributed to high unemployment during the 1980s, and that reforms of these LMIs have made unemployment reductions possible afterwards.…”

Section: Introductionmentioning

confidence: 99%

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Hysteresis and labour market institutions. Evidence from the UK and the Netherlands

Gil

2017

Empir Econ

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This paper uses data for the UK and the Netherlands (1983q4-2011q4) to test if hysteresis occurs in these economies, and through what mechanisms. The novelty of the paper resides in the use of a VAR-IRF that encompasses previous hysteresis studies, using long-term unemployment, productivity, capital stock and real long-term interest rates, and in the use of specific Labour Market Institutions shocks, such as benefits, taxation or unions' power. This allows us to disentangle what specific demand and supply-variables affect unemployment in the long-run, i.e. the NAIRU. Our findings suggest that there is hysteresis in both countries, and that it happens through several channels. Further, we find that the influence of Labour Market Institutions on unemployment depend on their impact on the real wages-productivity gap. These results have implications for structural and macroeconomic policies that we also discuss. Finally, we investigate the impact of different supply and demand-shock on long-term unemployment and discuss the relevant policy implications.Keywords Hysteresis · NAIRU · Labour Market Institutions · Impulse response analysisWe would like to thank the referee and the editor for their comments and useful suggestions. We are also grateful to

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Section: Hysteresis Hypothesissupporting

confidence: 66%

Section: Unemployment and Lmimentioning

confidence: 94%

Section: Introductionmentioning

confidence: 99%

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Hysteresis and labour market institutions. Evidence from the UK and the Netherlands

Gil

2017

Empir Econ

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“…One possible reason why such a policy could be upheld for so long has to do with the restructuring of social security provision starting in the second half of the 1980's. See Broersma et al (2000).…”

Section: National Adjustment To Regional Demand Shocksmentioning

confidence: 99%

“…One explanation for this 'Dutch Miracle' is the policy of wage moderation that could be sustained due to major revisions in the Dutch social security system. See also Broersma et al (2000). One of the questions addressed in this paper is: is this high level of flexibility evenly distributed over Dutch regions, or is there a difference in adjustment speed, and hence flexibility, between Dutch regions.…”

Section: Introductionmentioning

confidence: 99%

Regional labour market dynamics in the Netherlands

Broersma¹,

Dijk²

2002

Papers in Regional Science

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may ABSTRACTThis paper analyses the response of the Dutch labour market to a regional labour demand shock. European-wide studies and US labour market studies found that in Europe adjustment to such a shock runs primarily through changes in participation, while in the US this is through migration of workers. The main explanation for this phenomenon is the rigid labour market in Europe, against the flexible labour market in the US, which is expressed by the fact that mobility among US workers is much higher than among European workers. A similar approach to the Dutch labour market shows that adjustment to labour demand shocks is primarily through changes in participation. In that sense it fits the European picture. As far as the speed of adjustment to a shock is concerned, the Dutch labour market seems more in line with American than with European levels. A disaggregate analysis shows that particularly the response of the northern labour market stands out. Adjustment to a shock is absorbed faster than in other Dutch regions. Furthermore, unemployment and migration are more important as absorption channels than in the other regions.

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Makroökonomische Ursachen von Erwerbslosigkeit — eine neoklassische Perspektive

Reichel¹

2001

Erwerbslosigkeit

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Labour supply, the natural rate, and the welfare state in The Netherlands: the wrong institutions at the wrong point in time

Cited by 15 publications

References 3 publications

Hysteresis and labour market institutions. Evidence from the UK and the Netherlands

Hysteresis and labour market institutions. Evidence from the UK and the Netherlands

Regional labour market dynamics in the Netherlands

Makroökonomische Ursachen von Erwerbslosigkeit — eine neoklassische Perspektive

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