Episodes of Unemployment Reduction in Rich, Middle-Income, and Transition Economies
This paper studies the incidence and determinants of episodes of drastic unemployment reduction, defined as swift, substantial, and sustained declines in unemployment. Forty-three episodes are identified over a period of nearly three decades in 94...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10986/18795 |
| Summary: | This paper studies the incidence and
determinants of episodes of drastic unemployment reduction,
defined as swift, substantial, and sustained declines in
unemployment. Forty-three episodes are identified over a
period of nearly three decades in 94 rich, middle-income,
and transition countries. Unemployment reductions often
coincide with an acceleration of growth and an improvement
in macroeconomic conditions. Episodes are much more
prevalent in countries with higher levels of unemployment
and, given unemployment, are more likely in countries with
better regulation. An efficient legal system that enforces
contracts expeditiously is particularly important for
reducing unemployment. The results imply that while
employment is largely related to the business cycle, better
regulation reduces the likelihood of high unemployment and
facilitates a more rapid recovery in the event unemployment
builds up. |
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