Roots of the Recent Recoveries: Labor Reforms or Private Sector Forces?

David Jestaz,

DJ

David Jestaz Observatoire Français des Conjonctures Économiques

Edmund S. Phelps,

ESP

Edmund S. Phelps Columbia University

Gylfi Zoega, and

GZ

Gylfi Zoega Birkbeck College

Jean-Paul Fitoussi

JF

Jean-Paul Fitoussi Observatoire Français des Conjonctures Économiques

Discussants: Christopher A. Sims and

CAS

Christopher A. Sims

Olivier Blanchard

Olivier Blanchard C. Fred Bergsten Senior Fellow - Peterson Institute for International Economics

FROM THE MID-1970s to the mid-1980s, most of the industrial economies
of the Organization for Economic Cooperation and Development (OECD)
suffered a sharp slide in economic activity, as measured both by employment
in relation to the labor force and by male labor force participation
in relation to the working-age population. This decline sparked new structuralist
modeling of the determinants of employment and supplied an
empirical record for testing the models. Some consensus has now emerged
on the main mechanisms and causal forces behind the deep slump.