Towards Full Employment and Growth in the European Union

  • Paul J. J. Welfens
Conference paper

Abstract

After a decade of full employment in OECD countries in the 1960s, the 1970s brought severe problems in labor markets and lasting negative shifts in European markets. From the trough of one business cycle to the next unemployment increased. In the period 1987–90 the EC’s unemployment rate increased by 6 percentage points; the 11 percent rate reached in 1994 is unlikely to fall quickly in the 1990s. The EC Commission noted in its White Paper on Growth, Competitiveness and Employment that in the two decades after 1973 the European economy’s potential rate of growth shrunk from around 4 % to roughly 2.5 % p.a.; the investment-output ratio declined by five percentage points. The unemployment rate has steadily increased from cycle to cycle, while the EU’s competitive position in relation to the US and Japan has worsened with regard to export markets shares, product innovation and R&D intensive products. At the same time it was noted that the single market program was rather successful: nine million jobs were created between 1986 and 1990, EC trade doubled in sectors previously regarded as sheltered from competition and growth increased by a half of a percentage point each year (EC COMMISSION, 1993, pp. 9–10). The EC Commission considers cyclical, structural and technological unemployment as major problems and finally concludes that the creation and expansion of trans-European networks is the key to restored growth, full employment and international competitiveness.

Keywords

Europe Transportation Income Expense Pyramid 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. BENTOLILA, S. and DOLADO, J.J. (1994), Labour Flexibility and Wages: Lessons from Spain, Economic Policy, 18, 53–100.CrossRefGoogle Scholar
  2. BRUNO, M. and SACHS, J. (1985), The Economics of Worldwide Stagflation: Cambridge, MA.Google Scholar
  3. CHADHA, B., CORICELLI, F. and KRAJNYAK, K. (1993), Economic Restructuring, Unemployment, and Growth in a Transition Economy, IMF Staff Papers, Vol. 40, 744–780.CrossRefGoogle Scholar
  4. DREZE, J. and BEAN, C., eds. (1990), Europe’s Unemployment Problem, Cambridge, MA.Google Scholar
  5. DREZE, J.H. and MALINVEAUD, E.(1994), Growth and Employment. The Scope for a European Initiative, European Economy, Reports and Studies, No. 1, Brussels.Google Scholar
  6. EC COMMISSION (1993), Growth, Competitiveness, Employment, White Paper, Brussel.Google Scholar
  7. FRANZ, W. and GORDON, R.J. (1993), German and American Wage and Price Dynamics, European Economic Review.Google Scholar
  8. FRÖHLICH, H.-P., KLÖS, H.-P., KROKER, R., LINK, F. J., SCHNABEL, C. (1994), Lohnpolitik in der europäischen Währungsunion, Köln: Institut der deutschen Wirtschaft Köln/Deutscher Instituts Verlag.Google Scholar
  9. GORDON, R. (1988), Back to the Future: European Unemployment Today Viewed from America in 1939, Brookings Papers on Economic Activity, 1988, 271–304.Google Scholar
  10. HEILEMANN, U. and SAMAROV, A. (1990), Changes in the Determinants of the Rate of Change of Wage Rates in the FRG: A Recursive Analysis 1952 to 1985, Jahrbücher für Nationalökonomie and Statistik, Vol. 207, 448–463.Google Scholar
  11. IMF (1996), World Economic Outlook, Washington D.C.Google Scholar
  12. IWD (1994), Dokumentation: Personalzusatzkosten in der westdeutschen Wirtschaft, in: IW-Trends, Vol. 21, 53–62.Google Scholar
  13. LANDMANN, O. and JERGER, J. (1993), Unemployment and the Real Wage Gap: A Reappraisal of the German Experience, Weltwirtschaftliches Archiv, 689–717.Google Scholar
  14. LAYARD, R.; NICKELL, S. and JACKMAN, R. (1991), Unemployment, Oxford: Oxford University Press.Google Scholar
  15. LINDBECK, A. and SNOWER, D.J. (1988), Cooperation, Harassment, and Involuntary Unemployment: An Insider-Outsider Approach, American Economic Review, Vol. 78, 167–188.Google Scholar
  16. LINK, F.J. (1993), Lohnstückkosten im internationalen Vergleich, IW-Trends, Vol. 20/3, 49–59.Google Scholar
  17. OECD (1993), Employment Outlook, Paris, July 1993.Google Scholar
  18. OECD (1994), The OECD Jobs Study, Paris.Google Scholar
  19. OECD (1996), Employment Outlook, Paris.Google Scholar
  20. PETIT, P. (1995), Technology and Employment: Key Questions in a Context of High Unemployment, in: OECD, STI Review, No. 15, pp. 13–47.Google Scholar
  21. WELFENS, P.J.J. (1992), Privatization, M&As, and Interfirm Cooperation in the EC: Improved Prospects for Innovation?, in: SCHERER, F.M. and PERLMAN, M., eds., Entrepreneurship, Technological Innovation, and Economic Growth, Ann Arbor: University of Michigan Press, 119–140.Google Scholar
  22. WELFENS, P.J.J., ed., (1994), European Monetary Integration, 2nd revised and enlarged edition, New York: Springer.Google Scholar
  23. WELFENS, P.J.J. (1995), Telecommunications and transition in Central and Eastern Europe, in: Telecommunications Policy, Vol.19, No.7, 561–577.Google Scholar
  24. WELFENS, P.J.J. and Graack, C. (1996a), Telekommunikationswirtschaft: Deregulierung, Privatisierung and Internationalisierung, Heidelberg: Springer.Google Scholar
  25. WELFENS, P.J.J. and GRAACK, C. (1996b), Telecommunications in Western Europe: Liberalization, Technological Dynamics and Regulatory Developments, in: WELFENS, P.J.J. and G. YARROW (Eds.), Telecommunications and Energy in Systemic Transformation, Heidelberg/New York: Springer.Google Scholar
  26. OECD (1994), The OECD Jobs Study, Paris: OECD.Google Scholar
  27. SCHNABEL, C. (1997), Tariflohnpolitik and Effektivlohnfindung, Frankfurt/Main: Peter Lang.Google Scholar
  28. SNOWER, D.J. (1994), Converting Unemployment Benefits into Employment Subsidies, American Economic Review, Papers & Proceedings, Vol. 84, 65–70.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1998

Authors and Affiliations

  • Paul J. J. Welfens

There are no affiliations available

Personalised recommendations