Fighting Unemployment

The Limits of Free Market Orthodoxy

Edited by David R. Howell

With much of Europe plagued by high levels of unemployment, it has become widely accepted that the culprit is labor market rigidity and that the prescription can only be labor market deregulation: lower wages, higher earnings inequality, greater decentralization in bargaining, less generous unemployment benefits, more hiring flexibility, and less job security. Fighting Unemployment critically assesses this free market orthodoxy. With cross-country statistical analyses and country case studies, leading economists from seven North American and European countries contend that this conventional wisdom has greatly exaggerated the extent to which the unemployment problem can be blamed on protective labor market institutions and that the case for dismantling the welfare state to fight unemployment rests more on free market ideology than on the empirical evidence. The larger message of this book is that fundamentally different labor market models - ranging from the 'American Model' to the much more regulated and coordinated Scandinavian systems - are compatible with low unemployment.

Fighting Unemployment

The Limits of Free Market Orthodoxy

Edited by David R. Howell

Description

With much of Europe plagued by high levels of unemployment, it has become widely accepted that the culprit is labor market rigidity and that the prescription can only be labor market deregulation: lower wages, higher earnings inequality, greater decentralization in bargaining, less generous unemployment benefits, more hiring flexibility, and less job security. Fighting Unemployment critically assesses this free market orthodoxy. With cross-country statistical analyses and country case studies, leading economists from seven North American and European countries contend that this conventional wisdom has greatly exaggerated the extent to which the unemployment problem can be blamed on protective labor market institutions and that the case for dismantling the welfare state to fight unemployment rests more on free market ideology than on the empirical evidence. The larger message of this book is that fundamentally different labor market models - ranging from the 'American Model' to the much more regulated and coordinated Scandinavian systems - are compatible with low unemployment.

Fighting Unemployment

The Limits of Free Market Orthodoxy

Edited by David R. Howell

Author Information

David Howell, is Associate Dean and Professor of economics and public policy at the Milano Graduate School of Management and Urban Policy, New School University (New York City). He also teaches in the Economics Department of the Graduate Faculty and is a Research Associate at the University's Center for Economic Policy Analysis (CEPA). His recent published work has addressed wage inequality in the United States, unemployment across OECD countries and the labor market implications of immigration in U.S. cities.

Fighting Unemployment

The Limits of Free Market Orthodoxy

Edited by David R. Howell

Reviews and Awards

"The essays in this book are an in-depth challenge to the received wisdom that labor market rigidity is to blame for poor employment performance, in Europe and elsewhere. Though not all readers may agree with the nuances, these essays contain a wealth of interesting data analysis and discussion. This volume serves as a perfect antidote to the view that comprehensive labor market deregulation is the only way forward."-Jonas Agell, Professor of Economics, Stockholm University

"This is a well-structured set of contributions that seriously challenge the conventional line that when unemployment is high and persists it is largely due to labor market inflexibilities and rigidities caused by labor market institutions. The contributors present evidence to make it very clear that this view is weak at best and is not at all robust. This is an important point to make, given the widespread acceptance of the conventional view in policy circles around the world and an important challenge for economists to look more carefully at the complex mechanisms that underpin unemployment and inequality."-Stephen Machin, Professor of Economics, University College London, and Research Director, Centre for Economic Performance, London School of Economics

"This is a 'must-read' book that confronts the conventional wisdom on unemployment without resort to ideology and makes a compelling case that deregulating labor markets and sharply curtailing welfare institutions such as unemployment benefits will not cure unemployment. The evidence against the conventional wisdom mounts as one reads through the chapters."-Eileen Applebaum, Professor, School of Management and Labor Relations Director, Center for Women and Work, Rutgers, The State University of New Jersey