Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/2860
Authors: 
Lindbeck, Assar
Snower, Dennis J.
Year of Publication: 
2002
Series/Report no.: 
IZA Discussion paper series 534
Abstract: 
This article is an idiosyncratic survey of the insider-outsider theory, describing the vision underlying the theory, and evaluating salient contributions to the literature in the light of this vision. We also indicate what appear to have been dead-ends and red herrings in past research. The first section deals with the theory, concerning how labor turnover costs influence insider wages and outsiders? opportunities and how these costs affect employment and unemployment. We also address the more complex, and open, question of how employment and unemployment move through time, in response to labor market shocks. The second section deals with the insider-outsider theory in relation to two important economic institutions: unions and social norms. The third section confronts the relevant empirical evidence. Finally, the last section concludes by clarifying some common misunderstandings and identifying promising areas of future research.
Subjects: 
employment
unemployment
wages
insiders
outsiders
social exclusion
labor turnover costs
unemployment persistence
JEL: 
J68
J63
J64
J24
J23
J31
J42
J51
J38
J32
J41
Document Type: 
Working Paper

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