Cover IMF Working Papers
Dismal Employment Growth in EU Countries: The Role of Corporate Balance Sheet Repair and Dual Labor Markets
Author: Mr. Bas B. Bakker and Mr. Li Zeng
Series:
IMF Working Papers
Volume/Issue:
Volume 2013: Issue 179
Language:
English
Publication Date:
15 Aug 2013
DOI:
https://doi.org/10.5089/9781484311639.001
ISBN:
9781484311639
ISSN:
1018-5941
Pages:
32
Keywords:
WP; profit; profit share; share; labor market; Employment; saving; debt; firms; employment growth; increase variation; labor market duality; share change; Labor markets; Corporate sector; Wages; Baltics; Global; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper argues that the large differences among EU countries in post-crisis employment performance are to a large extent driven by the need to adjust corporate balance sheets, which had greatly deteriorated during the boom years in some countries but not in others. To close the large gaps between saving and investment, firms reduced investment and cut costs to boost profits. With much of the cost adjustment falling on firms’ wage bills, employment losses were largest in countries under the most intense pressures to improve corporate profitability and with limited wage flexibility due to labor market duality.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund