Labour and Financial Markets during Recessions: Causes of Lasting Unemployment Levels Following Financial Crises under Different Institutional Frameworks.

Project: Research

Description

This project aims at studying the interactions between financial and labour
markets during economic recessions. In particular, the goal is to better
understand the impact of a financial crisis on the behaviour of
unemployment during the recovery. This is an important issue given the
difficulties policy makers are experiencing today in the fight against lasting
high unemployment levels. At the same time, the evolutions in the financial
markets in the last thirty years have had an important impact on developed
economies. While several papers have already addressed lasting high
unemployment levels or the impact of the changes in the financial sphere, it
seems that the field of interaction between labour and financial policies still
misses some important elements.
Our aim is thus to provide further knowledge on those interactions. This will
be done by means of an empirical as well as a theoretical work. The
empirical part will lead us to collecting data on employment, financial
variables and institutional factors (level of employment protection,
importance of the industrial sector, level of financial regulation, ...) during
recessions. This will be done for several countries and the dataset will be
made robust for comparisons between countries and across time. Then we
will perform a statistical analysis to quantify the importance of the studied
interactions depending on the institutional setup. Finally, based on the
evidence from the data, we will build a model able to explain the microeconomic
foundations of the interactions as well as predict the impact of a
specific financial policies on the labour market.
Short titleJobless recoveries
StatusFinished
Effective start/end date1/10/146/01/19