Model analysis of the labour markets of diverse institutional structure

Tags: labour_market, structural_modeling, publications_from_2011

Publication date: 30.11.2011

The subject of empirical and theoretical analyses contained in this work are macroeconomic and institutional determinants of changes in the labour markets of OECD countries, analyzed through the prism of a model of search and dynamic recognition of the labor market. Chapter 1 is devoted to comparative analysis of labour markets in the EU-15 and U.S., as well as location on the background of the phenomena characteristic of transforming the Polish economy. We draw attention to the fact that the space of differences in the behavior of employment, unemployment and inactivity in Europe and America span the differences in the cyclical properties of labour market flows. In the last two decades, flows  in the U.S. each year included approximately 4.5-fold higher proportion of economically active persons than the average in Europe. Examining the causes of these differences, using the formal tools of analysis model, we devote Chapter 3. In the preceding chapter 2 we present a theoretical tool in the form of dynamic stochastic general equilibrium model. We integrate its strong heterogeneity of individuals in the labor market with the broader macro-economic model of DSGE type, in which there are: (1) structurally modeled flows between the three states in the labour market, (2) trade and capital from abroad, (3) the banking sector taking into account basic friction cash and liquidity, (4) the leading central bank with rules-based and discretionary monetary policy, and (5) the government influencing the economy through fiscal policy. Using this model, we make a historical decomposition of cyclical fluctuations observed for several variables to assess what impact on the individual variability of these have different macroeconomic shocks and differences in the properties of the economy. We show that the differences in the formation of GDP and its components in the U.S. and Europe in the course of historical cycles, including the recent crisis, primarily responsible are the differences in scale and intensity of technological shocks.

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