Trends in European labour markets and preferences over unemployment and inflation

In this speech, David Blanchflower, an external member of the Bank of England’s Monetary Policy Committee, considers the similarities and differences between European labour markets and the implications of unemployment for wages.
Published on 27 September 2007

Speaking at a seminar organised by Dresdner Kleinwort Bank in the City of London, Professor Blanchflower notes that unemployment in Europe is higher than it is in the United States. Whilst Western Europe has more job protection, higher unemployment benefits, more union power and a more generous welfare state, this does not explain the observed crossing of US and European unemployment rates in the 1980s. Professor Blanchflower looks at data that indicate a positive correlation between unemployment and changes in rates of home ownership.

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