We propose an explanation of why Europeans choose to work fewer hours than Americans and also suffer higher rates of unemployment. Labor market regulations, unemployment benefits, and high levels of public consumption in many European countries reduce, ceteris paribus, the gains from being...

In contrast to the recently decreasing unemployment rates in the EU, long-term unemployment remains at alarming levels. An economic recovery will not be sufficient to get all long-term unemployed back to work; rather, there is a need for effective policies addressing the long-term unemployed. To...

This paper analyses the effect of unemployment insurance generosity and active labour market policy on reemployment stability in Europe. Using EU-SILC and OECD data, we conduct discrete time survival analyses with shared frailty specification to identify policy effects at the micro and macro...

This paper considers the role of flexicurity when jobs must be reallocated from a declining, traditional sector to a skill intensive expanding sector. Workers initially decide whether to acquire qualifications for skill-intensive tasks or to accept a less demanding traditional job. Unemployment...

Using cross-country data, we investigate the determinants of reservation wages and their course over the jobless spell. Higher unemployment benefits lead to higher reservation wages. Further, again consistent with the basic search model, repeated observations on the same individual provide scant...

A thorny problem in identifying the determinants of reservation wages and particularly the role of continued joblessness in their evolution is the simultaneity issue. We deploy a natural control function approach to the problem that involves conditioning elapsed duration on completed...