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Political and Economic Explanations for Unemployment: A Cross-National and Long-Term Analysis

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  • Korpi, Walter

Abstract

This article shows that the widely accepted supply shock and real wage gap explanation of increases in unemployment rates since 1973 has only limited empirical support. The causal factors behind unemployment are best understood by focusing on conflicts of interest in Western democracies, on the distribution of power resources between major interest groups and on strategies of conflict. Given economic constraints, from this perspective unemployment appears as the labour market expression of distributive conflict, alternatives to which are inflation and industrial disputes. Strategic action by government elites and long-term patterns in settling conflicts are major factors behind the two great transformations of Western unemployment levels – the introduction of full employment in the immediate post-war period and the return to high unemployment since 1973 – as well as in variations in unemployment among eighteen Western democracies.

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  • Korpi, Walter, 1991. "Political and Economic Explanations for Unemployment: A Cross-National and Long-Term Analysis," British Journal of Political Science, Cambridge University Press, vol. 21(3), pages 315-348, July.
    • Handle: RePEc:cup:bjposi:v:21:y:1991:i:03:p:315-348_00
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    Cited by:

    1. Bernhard Ebbinghaus & J. Timo Weishaupt, 2022. "Readjusting unemployment protection in Europe: how crises reshape varieties of labour market regimes," Transfer: European Review of Labour and Research, , vol. 28(2), pages 181-194, May.
    2. Jochem, Sven, 1998. "The social democratic full-employment model in transition: The Scandinavian experiences in the 1980s and 1990s," Working papers of the ZeS 02/1998, University of Bremen, Centre for Social Policy Research (ZeS).
    3. Kamila Fialová & OndÅej Schneider, 2009. "Labor Market Institutions and Their Effect on Labor Market Performance in the New EU Member Countries," Eastern European Economics, Taylor & Francis Journals, vol. 47(3), pages 57-83, May.
    4. Victor Quirk, 2018. "The light on the hill and the ‘right to work’," The Economic and Labour Relations Review, , vol. 29(4), pages 459-480, December.
    5. Kenworthy, Lane, 2002. "Do affluent countries face an income-jobs tradeoff?," MPIfG Discussion Paper 01/10, Max Planck Institute for the Study of Societies.
    6. Indermit Gill & Johannes Koettl & Truman Packard, 2013. "Full employment: a distant dream for Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-34, December.

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