Long-term unemployment and the Great Recession in the Netherlands: Economic mechanisms and policy implications

Daniël van Vuuren, Albert van der Horst, H. Erken, Rob Luginbuhl, Marlies de Graaf-Zijl

Research output: Contribution to journalArticleProfessional

6 Citations (Scopus)

Abstract

A decomposition of GDP changes during the Great Recession shows that a relatively large part of the economic shock in the Netherlands translated into unemployment. Wages absorbed a larger part of the shock in Germany, the UK, and the US. The Netherlands has faced more long-term unemployment than other countries, particularly in recent years. Long-term unemployed workers are on the margins of the Dutch labour market. Neither real wages nor the number of vacancies respond to an increasing rate of long-term unemployment. Long-term unemployment is for an important part a problem of older unemployed workers. In the Netherlands, 40 % of the long-term unemployed workers are over age 50, which is almost twice as much as in the EU and the US. We identify three possible avenues for labour market reform: unemployment insurance, employment protection legislation and active labour market policies.
Original languageEnglish
Pages (from-to)415-434
JournalThe Economist
Volume163
Issue number4
DOIs
Publication statusPublished - 2015
Externally publishedYes

Keywords

  • long-term unemployment
  • Great Recession
  • wage adjustment
  • unemployment insurance
  • labour market institutions

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