This paper discusses the challenges that European Monetary Union (EMU) poses for European labor markets, emphasizing in particular the regional dimension of the European unemployment problem. The authors argue that the inability of labor markets to adjust to shocks is largely a regional problem...

Labor markets in Australia have adjusted smoothly to significant declines in commodity prices with little increase in unemployment. This paper examines several aspects of the adjustment, focusing on (i) evidence of increased labor market frictions following the commodity price decline; (ii)...

This paper provides new empirical evidence on the degree of nominal wage flexibility in a sample of nineteen industrial countries. Across countries, aggregate uncertainty increases the degree of wage flexibility in the face of various shocks. Wage flexibility stabilizes fluctuations in real...

We investigate the long-run relationship between the real exchange rate, traded and nontraded productivity levels, and government spending for 14 OECD countries, using recently developed panel cointegration tests. The results indicate that under certain assumptions it is easier to detect...

This paper assesses the responsiveness of wages and labor force movements to employment shocks across British and U.S. regions and across Europe using a multivariate vector autoregression technique. The paper finds inflexible real wages in all three areas in that each area’s real wage responds...

This paper argues that an important group of labor market policies are complementary in the sense that the effect of each policy is greater when implemented in conjunction with the other policies than in isolation. This may explain why the diverse, piecemeal labor market reforms in many European...

The aim of this paper is to analyze the relationship between labor market flexibility and unemployment outcomes. Using a panel of 97 countries from 1985 to 2008, the results of the paper suggest that improvements in labor market flexibility have a statistically and significant negative impact on...

Institutional and market frictions impose costs on the reallocation of labor from low to high productivity sectors, leading to suboptimal allocations and a loss in aggregate labor productivity. Using cross-country sector-level data, we use a dynamic panel error correction model to compute the...

Even though institutions are created to protect workers, they may interfere with labor market functioning, raise unemployment, and end up being circumvented by informal contracts. This paper uses Brazilian microeconomic data to show that the institutional changes introduced by the 1988...

The aim of this paper is to analyze unemployment and labor market developments in Algeria and assess the factors that may hamper employment creation. The results of the paper suggest that the relative low output-employment elasticities and rigid labor market are the main factors behind the still...