The Impact of the Crisis on Employment and the Role of Labour Market Institutions

38 Pages Posted: 22 Nov 2010

See all articles by Werner Eichhorst

Werner Eichhorst

Institute for the Study of Labor (IZA)

Verónica Escudero

Research Department (ILO); Paris School of Economics

Paul Marx

IZA Institute of Labor Economics

Steven Tobin

affiliation not provided to SSRN

Abstract

The paper takes a comparative perspective on the labour market impact on G20 and EU countries of the financial and economic crisis that began in 2008. It starts from the observation that the decline in employment and rise in unemployment in relation to output or GDP reductions varies significantly across countries. It examines the impacts from an institutional perspective taking into account different channels of external, internal and wage flexibility determined by both the institutional arrangements in place before the crisis and discretionary reforms implemented during the crisis. Emphasis is placed on the role of permanent and temporary jobs, working time adjustment, wage flexibility and active and passive labour market policies. The paper shows that, at least for the time being, unemployment increases have been contained in countries with comparatively strong internal flexibility. At the same time, however, it appears that the crisis has - at least in some cases - contributed to a further dualization of labour markets given that risks are allocated unequally across types of employment.

Keywords: crisis, employment, EPL, institutions, dual labour markets, flexibility

JEL Classification: J58, J65, J21

Suggested Citation

Eichhorst, Werner and Escudero, Verónica and Marx, Paul and Tobin, Steven, The Impact of the Crisis on Employment and the Role of Labour Market Institutions. IZA Discussion Paper No. 5320, Available at SSRN: https://ssrn.com/abstract=1712627 or http://dx.doi.org/10.2139/ssrn.1712627

Werner Eichhorst (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Verónica Escudero

Research Department (ILO) ( email )

Route des Morillons 4
Geneva, 1211
Switzerland

HOME PAGE: http://www.ilo.org/almp-americas

Paris School of Economics ( email )

Paris
France

HOME PAGE: http://www.parisschoolofeconomics.eu/en/escudero-vasconez-veronica/

Paul Marx

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Steven Tobin

affiliation not provided to SSRN

No Address Available

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