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Economic Perspectives, 20, 3rd, No. 5, September 1996
A Supply-side Explanation of European Unemployment

This article offers a supply- side explanation of striking patterns in unemployment rates and duration of unemployment in European countries, compared with other member countries of the OECD (Organization for Economic Cooperation and Development). The rise in long-term unemployment in Europe is attributed to the adverse incentive effects of generous welfare programs in times of economic turbulence.



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