PUBLIC ENTERPRISES AND LABOR MARKET PERFORMANCE
This article shows that state control of some industries may have contributed to the increase in European unemployment from the 1970s to the early 1990s. We develop a simple two-sector model, one privately run and one publicly run, that has risk-averse workers directing their search into one of the sectors. Assuming that the privately run sector is less able to insure its employees against uncertainty, we show that aggregate unemployment in this economy increases in response to an increase in economic turbulence. Copyright 2007 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.
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|Authors:||Hörner, Johannes ; Ngai, L. Rachel ; Olivetti, Claudia|
International Economic Review. - Department of Economics. - Vol. 48.2007, 2, p. 363-384
Department of Economics
|Type of publication:||Article|
Persistent link: https://www.econbiz.de/10005384938