Crisis, What Crisis?
Patterns of Adaptation in European Labor Markets
By Werner Eichhorst, Michael Feil, and Paul Marx
The current crisis, while of a global nature, has affected national labor markets to a varying
extent. While some countries have experienced a steep increase in unemployment, employment
in other developed economies has not fallen in parallel with a significant decline in
GDP. Our analysis shows that labor market institutions frequently used to study employment
performance can explain the development of unemployment in the situation of crisis in some
clusters of countries much better than in others. One major factor to be incorporated in capturing
national variations is the role of internal flexibility, in particular working time adjustment.
This calls for a broader concept of labor market flexibility which takes into account
different channels of adjustment.
Comment by Antje Mertens
Keywords: Labor market institutions, internal flexibility, employment protection, economic crisis
JEL Codes: J21, J23, J58
Werner Eichhorst, Michael Feil, and Paul Marx, Crisis, What Crisis?
Patterns of Adaptation in European Labor Markets, Applied Economics Quarterly 56/1 (2010), pages 29-64.