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European Integration - A Downward Bias in Employment Policies?

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  • Torben Andersen

Abstract

Even when labour mobility is low, international integration affects labour markets by making jobs more mobile. This runs via product market integration, which is an essential element of European integration. Increasing job mobility aects the possibilities single countries perceive in pursuing employment policies. In a setting where trade is driven by comparative advantages, and thus wage competitiveness plays an important role for employment, it is shown that there is a tendency that a bias arises in employment policies. Policies expanding private employment tend to be used too little, while policies harming private employment tend to be used too much. These effects are stronger the more integrated product markets are.

Suggested Citation

  • Torben Andersen, 2001. "European Integration - A Downward Bias in Employment Policies?," CESifo Working Paper Series 574, CESifo.
    • Handle: RePEc:ces:ceswps:_574
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    File URL: https://www.cesifo.org/DocDL/cesifo_wp574.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ulrich Fritsche & Camille Logeay & Kirsten Lommatzsch & Katja Rietzler & Sabine Stephan & Rudolf Zwiener unter Mitarb. von Cansel Kiziltepe & Christian Proano-Acosta, 2005. "Auswirkungen von länderspezifischen Differenzen in der Lohn-, Preisniveau- und Produktivitätsentwicklung auf Wachstum und Beschäftigung in den Ländern des Euroraums: Endbericht ; Forschungsprojekt im ," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 8, number pbk8.
    2. Andersen, Torben M, 2002. "Fiscal Stabilization Policy in a Monetary Union with Inflation Targeting," CEPR Discussion Papers 3232, C.E.P.R. Discussion Papers.
    3. Andersen, Torben M., 2005. "Fiscal stabilization policy in a monetary union with inflation targeting," Journal of Macroeconomics, Elsevier, vol. 27(1), pages 1-29, March.
    4. Andersen, Torben M., "undated". "The Macroeconomic Policy Mix in a Monetary Union with Flexible Inflation Targeting," Economics Working Papers 2003-2, Department of Economics and Business Economics, Aarhus University.

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    More about this item

    Keywords

    spill-overs; coordination; employment.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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