Daily Speculations

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These results, which are more detailed in the article as well as including the data from all OECD countries, lead Nickell to conclude that there are four main causes of rigidity and unemployment:

  1. Indefinite and generous employment benefits when combined with little or no pressure on the unemployed to obtain work
  2. High union coverage with low cooperation between unions or employers in wage bargaining
  3. High overall taxes impinging on the labor market
  4. Poor educational standard at the bottom of the labor market

He also identifies several myths:

  1. That strict employment and general labor market legislation create unemployment
  2. Short lasting generous employment benefits create unemployment
  3. High coverage of unions creates unemployment, (evidence only shows that a lack of cooperation creates unemployment).