Unemployment Macroeconomic Performance and the Labour Market

This book is concerned with why unemployment is so high and why it fluctuates so wildly. It shows how unemployment affects inflation, and discusses whether full employment can ever be combined with price stability. It asks why some groups have higher unemployment rates than others. The book thus surveys in a clear, textbook fashion the main aspects of the unemployment problem. It integrates macroeconomics with a detailed micro-analysis of the labour market. it uses the authors' model to explain the puzzling post-war history of OECD unemployment and shows how unemployment and inflation are affected by systems of wage bargaining and unemployment insurance. For each issue it develops new relevant theory, followed by extensive empirical analysis. The authors are established experts in this field, and this book gives their definitive treatment. It is based largely on new research, but also incorporates the best of existing knowledge. The long `overview' chapter is accessible to any non-specialist with an elementary knowledge of economics. The rest of the book provides key elements for courses in macroeconomics and labour economics at advanced undergraduate and graduate levels, and will serve as a major source of reference for both scholars and students. The basic aim of the book, however, is to provide the basis for better policy. As the book shows, by learning from theory and experience, we can avoid the waste and misery of high unemployment.

Overview; The Microfoundations: Wage Bargaining and Unions; Efficiency Wages; Wage Behaviour: The Evidence; Job Search: The Duration of Unemployment; Mismatch: The Structure of Unemployment; The Pricing and Employment Behaviour of Firms; The Macroeconomic Outcome: The Macroeconomics of Unemployment; Explaining Post-War Unemployment in OECD Countries; Policy Implications: Policies to Cut Unemployment

Richard Layard is Emeritus Professor of Economics and Co-Director of the Centre for Economic Performance at the London School of Economics. Stephen Nickell is Professor of Economics at the London School of Economics. Richard Jackman is Professor of Economics at the London School of Economics.