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The Equilibrium Rate of Unemployment in Varying Micro- Institutional Settings

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  • Donatella Gatti

    (PSE & IZA)

Abstract

A major issue in the current economic debate is related to the striking difference betweenEurope, Japan and US concerning the level and evolution of unemployment. This paperexplores the micro determinants of these observed stylized facts. In a first part, atheoretical framework is presented allowing to address this comparative analysis. Thestarting point is the definition of different micro-institutional settings encompassing: (i) the structure of the firm; (ii) the system of education or vocational training; (iii) thenature of the labor market. In particular, the notion of mode of organization of the firmwill be defined. In a second part, a model is proposed which takes up a radicaleconomics perspective to analyze the choice made by firms about wage and effort, subject to their mode of organization. The main results point to the crucial role played by the mode of organization of the firm and the nature of workers' competence as key-determinants of the different observable levels of the unemployment rate across main developed countries.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Donatella Gatti, 2005. "The Equilibrium Rate of Unemployment in Varying Micro- Institutional Settings," Macroeconomics 0507010, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpma:0507010
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