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The chapter analyzes the main trends and cross-national variations in early exit from work for eight European countries, Japan, and the USA. Participation levels and employment rates of older workers between age 55 and 64 have declined. Cohort-adjusted early exit rates for both men and women show not only a rise in early retirement over the 1970s and early 1980s, but also substantial cross-national differences. Early exit from work is widespread in Continental Europe, less so in Scandinavia, Anglophone market economies, and in Japan.

This chapter reviews the reasons why unemployment was so high in the 1920s and 1930s, so low in the 1950s and 1960s, why it rose to much higher levels in the 1980s, and why it seemed to fall after the mid-1990s. Section 10.2 discusses the measurement of unemployment and examines movements in the unemployment rate, in historical and international perspectives. Section 10.3 sketches a theoretical framework capable of elucidating the mechanisms via which international and domestic economic events impact upon unemployment, and places that model in its intellectual context. Section 10.4 discusses and analyses the changes in unemployment from 1918 to 2000. Finally, broad explanations for the passage of unemployment during the century are revisited.

This chapter examines the persistence of unemployment by drawing from John Maynard Keynes' two central ideas. The first idea is that any unemployment rate can persist as an equilibrium. The second is that the unemployment rate that prevails is determined by animal spirits. The chapter introduces a three-equation monetary model termed “Farmer monetary model,” which replaces the New Keynesian Phillips curve with a belief function that describes how agents form expectations of future nominal income. The chapter builds and estimates the Farmer monetary model using U.S. data for the period from the first quarter of 1952 to the fourth quarter of 2007. It compares the Farmer monetary model to a New Keynesian model by computing the posterior odds ratio. It shows that the posterior odds favor the Farmer monetary model and concludes by discussing the implications of this finding for fiscal and monetary policy.

Using data from the recently released Egypt Labor Market Panel Survey (ELMPS) of 2006, this chapter shows that there has been a decline in both the relative and absolute size of unemployment in Egypt in the period from 1998 to 2006. This result is puzzling to many and understandably has been met with a degree of skepticism, if not outright rejection. It thus requires some detailed scrutiny and, if confirmed, some explication. The chapter presents detailed evidence in support of a declining rate and level of unemployment in Egypt, as well as supporting evidence on the process of labor market entry for youth. It also presents what is regarded as a credible explanation for these trends on the basis of demographic, institutional, and economic arguments.

This chapter focuses on the accuracy of citizens' estimates of facts about the general state of the economy and on the consequences of that information. It analyzes both the determinants and political consequences of respondents' perceptions of the average price of gas and the unemployment rate in their home states. The chapter finds that individuals overestimate the unemployment rate and that substantial partisan differences also exist. In contrast, estimates of gas prices are on average reasonably accurate, with no partisan differences. These analyses also suggest that perceptions of unemployment, but not of gas prices, are implicated in changes in partisan identification.

This chapter considers work and unemployment. Full-time workers spend at least a quarter of their waking life at work. But on average, they enjoy that time less than anything else they do. The worst time of all is when they are with their boss. Even so, people hate it even more if they are unemployed. This is not just because they lose money from being out of work. They lose a sense of contributing, of belonging, and of being wanted. The chapter reviews all these issues, focusing again on people under 65. It first looks at unemployment—how much it hurts, whether one can adapt to it, what legacy it leaves, the role of local unemployment rates, and what determines who becomes unemployed. It then turns to the quality of work.

This chapter contains a number of examples of families of nonlinear models in economic theory. These include disequilibrium models that have been applied to modelling markets with rationing or sticky prices, and various labour market models that generate nonlinearities in employment or unemployment. Modelling exchange rates fluctuating within boundaries set by the central bank that define the so‐called target zone of the exchange rate is also discussed. Production theory, in which nonlinear models are common, constitutes the last example. For all of these four areas, examples of application of these models to time series or cross‐section data are described.

Creating a scientific survey of unemployment in the 1930s and 1940s was an advance for people’s understanding of unemployment and for rational government policy. Many government officials, including Secretary of Labor Frances Perkins and agencies including the Census Bureau, the Works Progress Administration, and the Bureau of Labor Statistics (BLS), deserve credit for the achievement. However, today’s BLS unemployment rate omits too many people, and the low count weakens support for job-creation programs. This chapter offers a short history and a critique. It explains and evaluates the official rate, discusses hidden unemployment, including discouraged workers and other labor-force dropouts, evaluates alternative unemployment rates, including the BLS’s U-6 and the National Jobs for All Coalition’s rate, and examines the idea of full employment.

This chapter presents a new approach to estimating time variation in the non-accelerating inflation rate of unemployment (NAIRU). A major problem with Phillips curve-based estimates is that the complicated relationship between inflation, its own lags, supply shocks, and unemployment and its lags makes it possible to explain any particular incidence of high or low inflation a number of different ways. This problem is the root cause of both the lack of robust results and the large confidence intervals around NAIRU estimates derived from Phillips curve estimates. The chapter explores an alternative source of information about time variation in the NAIRU. The first section provides a brief introduction to the literature on the Beveridge curve and on how it has shifted over time. The second section develops a theory linking shifts in the Beveridge curve to shifts in the NAIRU. The third section presents estimates of the Beveridge curve model developed in the second section. The fourth section presents estimates of a linearized version of the model using a Kalman filter. Estimates of a restricted version of the model suggest that the information from the Beveridge curve adds significantly to the explanatory power of the Phillips curve. Two commentaries on the preceding study are also provided at the end of the chapter.

The chapter examines different dimensions of rural unemployment and association of unemployment with poverty in rural Odisha. It measures the trends in wages of field labourers vis-à-vis wages of other rural workers and the inter-district disparity in field labour wage rates in the state. The chapter discusses the options in public intervention for improving the conditions of agricultural labourers in the state. The findings reveal that the incidence of rural unemployment has increased in Odisha between 1999–2000 and 2009–10 and particularly unemployment under CDS measure (underemployment) is found more prominent in the state during the study period. Compared to the all-India average, the incidence as well as the intensity of unemployment remains higher in rural Odisha. Unemployment and poverty are found to be inversely related. Better-off regions reveal higher rates of unemployment with lower incidence of poverty while worse-off regions exhibit vice versa. Agricultural field labourers receive lower wages than other rural workers. The chapter finds that wage rates vary across districts and between genders. To improve the economic conditions of agricultural workers, the study makes suggestions for improving productivity in agriculture along with increased government intervention for providing basic needs to these vulnerable sections of the rural community.

This chapter addresses two broad issues. The first is whether there is clear evidence of hysteresis effects. To put it differently, can we reject the hypothesis that the non-accelerating inflation rate of unemployment (NAIRU), and hence the long-run behavior of unemployment, is independent of aggregate demand? It answers yes to this question and reviews past evidence on hysteresis and presents some new evidence. The second broad issue is the nature of hysteresis. Through what mechanisms do short-run unemployment movements influence the NAIRU? What determines the strength of these effects in different countries and time periods? What are the implications for monetary policy? Two commentaries on the preceding study are also provided at the end of the chapter.

This chapter reviews several factors that impact mortgage default behavior; the expansive literature on the determinants of mortgage default, before and after the credit crisis; and the private and governmental responses to the crisis, such as loan modification programs for distressed borrowers and lenders. These factors include changes in housing prices, unemployment rates, loan and borrower characteristics, underwriting guidelines, moral hazard, securitization, and illiquidity, among others. The effectiveness and social costs of such programs and their impact on changing a borrower’s default behavior will continue to be controversial issues among academics and market participants. Trends in housing prices, interest rates, unemployment, and consumer leverage together with delinquency and foreclosure rates show improvements since the peak of the credit crisis but they are not back to pre-crisis rates. The debate over the causes of the mortgage defaults among academics and industry participants continues.

This chapter determines the employment and wage benefits to working families from a high-employment economy and identifies its inadequacies. With the persistence of almost double-digit official unemployment rates, which are even higher for at-risk groups, particularly teenagers, it will be many years before the nation obtains a high-employment economy. Substantial employment shortfalls will continue for some time; however, the chapter focuses on the most prominent at-risk groups: teenagers, single mothers, and black men. It also explores the impact of the first six years of the 1990s economic boom in relation to the limitations of robust employment growth and what can be anticipated over the next few years.

Monetary policy has been under discussion both before and after Keynes’s General Theory. While he was sceptical of its efficacy, the current mainstream macroeconomic consensus accords it primacy in the process of maintaining price and output stability. Moreover, between these two objectives, the former has been accorded primacy over the latter in the policy prescriptions of the mainstream macroeconomic consensus. To locate the rationale behind monetary policy, we have presented here a macrotheoretical survey of monetary policy ranging through Keynes, Monetarists, New Keynesians, and heterodox approaches. We argue that, unlike the heterodox interpretations of Keynes, the neoclassical synthesis or the current macroeconomic consensus have, at best, only partially developed Keynes’s theoretical insight as set out in Keynes’s General Theory.

This chapter first looks at the entire observed work trajectory from first job up until the age of 35 in order to furnish a descriptive picture of how many and which women, in each cohort, have entered employment and experienced none, one, or several family-care breaks. It then focuses on specific transitions within the entire trajectory and, using the technique of event history analysis, examines their changing correlates. In other words, it examines transitions between employment and housework and the changing effects of a woman's education, labour market experience, occupational class, type of job (full time or part time), marital and childrearing histories, her mother's work experience, and the yearly unemployment rate of the region in which she lives. By running first a single additive model for all the four birth cohorts, and then separate models by cohort, the chapter also indirectly addresses the ‘compositional’ issue of the post-war increase in women's employment. The last section summarises and discusses the main findings.

Over the last few years, the debate on labor market reform has been at the center of economic policy debate in Argentina. This debate has been fueled by the sustained growth in the unemployment rate observed during the decade. One of the major targets of the attack on labor market regulation has been high dismissal costs. Attempts to reduce dismissal costs for all existing jobs have faced strong opposition. As a compromise, and to stimulate job creation, employment promotion contracts for new jobs were introduced in 1995. These contracts were limited to a fixed term ranging from three months to two years. It is a standard view that the reform stimulated the creation of a large number of these temporary contracts, which currently dominate the flow of new jobs. However, there is now a growing concern about the volatility of these temporary jobs, referred to as junk contracts, and a predominant view that they tend to generate excessive turnover. This chapter studies the effect of this reform on job duration.

Over the past 20 years the unemployment rate in South Africa has not fallen below 20% and stands at 25% in 2013. Racial inequality is also evident in unemployment. The unemployment rates of Africans in 1994 was 26%, it reached a peak of 37% in 2002 and was at 27% in 2007. In contrast, unemployment of whites consistently remained at 4% in 1994 and 2007, with a peak of 6% in 2002. This chapter analyses the reasons for high unemployment and measures to combat high unemployment.