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The potential effects of labour market duality for countries in a monetary union
Author(s) -
KOSIOR Anna,
RUBASZEK Michał,
WIERUS Kamil
Publication year - 2016
Publication title -
international labour review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.433
H-Index - 46
eISSN - 1564-913X
pISSN - 0020-7780
DOI - 10.1111/j.1564-913x.2015.00050.x
Subject(s) - economics , unemployment , duality (order theory) , unemployment rate , labour economics , panel data , persistence (discontinuity) , monetary economics , macroeconomics , econometrics , mathematics , discrete mathematics , geotechnical engineering , engineering
This article investigates whether the varying prevalence of temporary employment contracts across Economic and Monetary Union (EMU) countries can explain their different unemployment dynamics. Using a database of labour market institutions, dynamic panel regressions are carried out for 11 eurozone countries for 1995–2013. Labour market duality – i.e. the co‐existence of permanent and temporary contracts – is found to have a robust and significant effect on unemployment dynamics: a high duality rate increases the response of unemployment to output shocks while decreasing its persistence. The authors suggest that introducing a “single contract” could improve stability at both eurozone and country level.