Author(s):
Veiga, Linda Gonçalves 
; Chappell Junior, Henry
Date: 2002
Persistent ID: http://hdl.handle.net/1822/1494
Origin: RepositóriUM - Universidade do Minho
Document details
Politics and unemployment in industrialized democracies
Description
This paper provides an empirical appraisal of the influence of politics on the evolution of unemployment rates in 13 industrialized democracies (12 European Union countries and the U.S.) from 1960 to 1999. We conduct new tests of opportunistic and partisan business cycle models, using richer data and more general specifications than previous studies. In contrast to most previous studies, we pay particular attention to the importance of labor market structure in conditioning the influence of politics on unemployment. We also investigate the relationship between political stability and economic stability. The results suggest the existence of partisan effects, with higher unemployment rates prevailing under “right” parties than “left” parties. There is more support for “rational” partisan models that embody transient partisan impacts than for models with permanent effects. We find evidence that union power is associated with higher average unemployment rates, but that centralized bargaining institutions tend to lower unemployment rates. The evidence also suggests that more fragmented coalition governments are associated with higher unemployment rates than single party governments.
This paper provides an empirical appraisal of the influence of politics on the evolution of unemployment rates in 13 industrialized democracies (12 European Union countries and the U.S.) from 1960 to 1999. We conduct new tests of opportunistic and partisan business cycle models, using richer data and more general specifications than previous studies. In contrast to most previous studies, we pay particular attention to the importance of labor market structure in conditioning the influence of politics on unemployment. We also investigate the relationship between political stability and economic stability. The results suggest the existence of partisan effects, with higher unemployment rates prevailing under “right” parties than “left” parties. There is more support for “rational” partisan models that embody transient partisan impacts than for models with permanent effects. We find evidence that union power is associated with higher average unemployment rates, but that centralized bargaining institutions tend to lower unemployment rates. The evidence also suggests that more fragmented coalition governments are associated with higher unemployment rates than single party governments.
Document Type
Article
Language English
Language English
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