Empirical Evidence

Abstract

That unemployment rates in the 1980s and 1990s have been persistently high especially in continental Europe is a well known fact. Whereas the following chapters will provide theoretical explanations for this development, this Chapter provides a more detailed description of the empirical observations. However, it needs to be noted throughout that there will always be several measurement methods for each question so that empirical evidence is seldom un ambiguous. For example, although there is universal agreement in the fact that unemployment has risen, there is by no means agreement on how exactly unemployment should be measured and many different definitions of unemployment coexist. In the case of unemployment rates this is not only because of different scientific measurement concepts but also due to the fact that there is also a political interest at using concepts which “lower” the unemployment rate. Hence, even if it is clear that the unemployment rate is defined as the ratio of the number of unemployed to the labour force, there is no consensus as to which criteria need to be fulfilled by individuals in order for them to be counted as unemployed or as part of the labour force. For example, how intensive does an individual need to searching for a job to count as unemployed? In which age range and how healthy do they need to be? What counts as a job, i.e. how many hours a week does it involve? What does the unemployed need to have done before being officially registered at a job cent re — e.g. students in Germany who are searching for their first job are not registered as unemployed.