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Relative Demand Shocks and Relative Wage Rigidities During the Rise and Fall of Swiss Unemployment
Journal
Kyklos
ISSN
0023-5962
ISSN-Digital
1467-6435
Type
journal article
Date Issued
2003-11-01
Author(s)
Abstract
Little is known on the existence of negative relative demand shocks against low-skilled workers on a ‘US-style' deregulated labour market with a ‘German-style' vocational (apprenticeship) education system. Switzerland provides an appealing testing ground to investigate this question. Traditionally a ‘zero unemployment' economy, Switzerland has seen an unprecedented rise in joblessness in the 1990s, although unemployment fell again to a rather low level after 1997. This paper tests whether Switzerland experienced a negative relative demand shock against the low skilled during this period and whether this shock resulted in growing wage dispersion between education groups (like in the US) or in growing unemployment (like in continental Europe). It turns out that only workers with an educational level below apprenticeship were affected by a negative relative demand shock, which speaks in favour of the German-style vocational education system. The Swiss wage structure, however, did not react to the relative demand shock against low-skilled workers without apprenticeship, which resulted in higher relative unemployment for this group. Download Discussion Paper Version: (pdf, 298 kb)
Language
English
Keywords
rigidities
HSG Classification
contribution to scientific community
Refereed
No
Publisher
Helbing & Lichtenhahn
Publisher place
Basel
Volume
56
Number
4
Start page
541
End page
562
Pages
22
Subject(s)
Division(s)
Eprints ID
15804