Unemployment as an Institutional Construct? Structural Differences in Non-Employment between Selected European Countries and the United States

Abstract

A comparison of unemployment rates in Germany, the Netherlands, France, Denmark, the UK and the United States suggests poor performance by the German labour market. The present study endeavours to show that a more sophisticated picture of unemployment can be drawn by taking into account additional forms of non-employment (such as incapacity, retirement or labour reserve). For this purpose, data from the 'European Social Survey' (ESS) and the survey 'Citizenship, Involvement and Democracy' collected in 2004 and 2005 have been analysed. While 'unemployment' plays a dominant role in Germany, people with comparable demographic characteristics and similar health status are more likely to identify themselves as 'permanently sick or disabled' and hence are classified thus in other countries. The results of this study underline that an international comparison of labour market performance, particularly a comparison of the effectiveness of labour market and social policy reforms, should not rely only on employment and unemployment rates. Taking alternate forms of non-employment into account can enhance one's knowledge and understanding of the functional differences between the labour markets in Europe and the United States.

Cumulative disadvantages of non-employment and non-standard work for career patterns and subjective well-being in retirement

“…Surprisingly, compared to labour market inactivity, unemployment does not play a significant role in the career patterns of men and women. While this could be due to the economically prosperous periods the persons in the sample where living in, it could also be an artefact of retrospective data (episodes shorter than 6 months), memory bias or hidden unemployment as mentioned by Erlinghagen and Knuth (2010). The same is true for the retirement phases.…”

“…First, labour market inactivity could be hidden unemployment. Erlinghagen and Knuth (2010) showed that the self-identification of labour market inactivity or unemployed in survey data could be dependent on institutional settings or only temporary, leading to the under-or overestimation of the frequency of these concepts within a country (see also Biegert, 2011).…”

Benefit dependency: The pros and cons of using “caseload” data for national and international comparisons

“…Since countries differ substantially in the ways in which they administratively configure the risk of unemployment (see also Erlinghagen and Knuth, ), an exclusive focus on unemployment benefit dependency would be deceptive. In particular those unemployed who are hard to reintegrate into the labour market are often referred to a range of other out‐of‐work benefit programmes, which entail different behavioural requirements.…”

Dépendance à l'égard des prestations: avantages et inconvénients du recours aux données sur les effectifs de bénéficiaires pour effectuer des comparaisons nationales et internationales

“…La définition administrative du risque de chômage différant sensiblement d'un pays à l'autre (voir également Erlinghagen et Knuth, ), limiter l'analyse à la dépendance à l'égard des prestations de chômage pourrait être source d'erreurs. En particulier, les chômeurs dont la réinsertion professionnelle est particulièrement difficile sont souvent orientés vers d'autres dispositifs de prestations en faveur des personnes privées d'emploi, subordonnés à des conditions différentes en termes de comportement à l'égard de l'emploi.…”