Journal Article

Labor market rigidity, unemployment, and the Great Recession


Abstract: Countries with very flexible institutions and labor market policies, like the U.S., experienced substantial increases in unemployment over the course of the Great Recession, while countries with relatively rigid institutions and strict labor market policies, like France, fared better. However, this better short-term performance comes with a tradeoff; evidence suggests that flexible labor markets keep unemployment lower in the long run.

Keywords: Labor market; Recessions; Unemployment;

Authors

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2011

Issue: June

Order Number: 11