This paper explicitly differentiates between unemployment and inactivity, by defining inactivity as a state in which … of large flows between employment, unemployment and inactivity. Secondly, it shows that unemployment and aggregate wages … individuals do not search for jobs when non-employed. Facing changes in the value of inactivity, individuals transit through three …

This paper challenges what is the standard account of UK unemployment, namely that the major swings in unemployment … over the past 25 years are due predominantly to movements in the underlying empirical "natural rate of unemployment" (NRU … unemployment are due, instead, to very prolonged after-effects of persistent (transitory but long-lasting) shocks. We argue that (a …

Why do many democracies fail to reform their labor market institutions? We study the feasibility of reforms that … unemployment may be constrained Pareto-efficient. Consequently, no reform is accepted unanimously by voters. We show that this … low rates of unemployment can be removed in the political process while high rates of unemployment tend to be politically …

High unemployment in many OECD countries is often attributed, at least in part, to the generosity and long duration of … unemployment compensation. It is therefore instructive to examine a country where high unemployment exists despite the near … complete absence of an unemployment insurance system. In South Africa unemployment stood at 23% in 1997 and the unemployed have …