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Unemployment in the OECD Since the 1960s. What Do We Know?* 

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  • * 

    An earlier version of this paper was prepared for the Unemployment Conference, on 27–8 May, 2002, at the London School of Economics. We thank the ESRC Centre for Economic Performance, CES ifo, Munich and the Bank of England External MPC Unit for help in the production of this paper and the Leverhulme Trust Programme on the Labour Market Consequences of Structural and Technological Change and CESifo, Munich for financial assistance. Our thanks are due to Michèle Belot, Olivier Blanchard, Guiseppe Nicoletti, Andrew Oswald, Jan Van Ours and Justin Wolfers for help with our data, as well as useful comments on an earlier draft. Two anonymous referees provided some helpful remarks for which we are also grateful.

Abstract

This paper presents an empirical analysis of unemployment patterns in the OECD countries from the 1960s to the 1990s. Our results indicate the following. First, broad movements in unemployment across the OECD can be explained by shifts in labour market institutions. Second, interactions between average values of these institutions and shocks make no significant additional contribution to our understanding of OECD unemployment changes.

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