Unemployment and Structural Unemployment in the Baltics
IMF Working Papers, August 19, 2014
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Bibliographic details
- Authors: Christian H Ebeke, Greetje Everaert
- Published: August 19, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498317207.001
Summary and main findings
- While the unemployment rate in the Baltics has fallen sharply from its crisis-peaks, it remains close to double digits.
- The paper estimates the structural component of the jobless rate in the three Baltic countries and analyzes its causes.
- Main finding: the current still elevated levels of unemployment mostly reflect structural factors.
- The paper points to the following potential causes of high structural unemployment:
- skill mismatches
- high tax wedges
- unemployment and inactivity traps
Analytical focus and methods
- Objective: estimate the structural component (NAIRU/structural unemployment rate estimate) of unemployment in Estonia, Latvia, and Lithuania and analyze determinants.
- Topics covered (as reflected in subject and keywords): Labor; Labor markets; Labor taxes; Structural unemployment; Taxes; Unemployment; Unemployment rate; NAIRU estimate; NAIRU unemployment; unemployment gap; internal migration; crisis dummy; core CPI.
Implications highlighted by the paper
- Elevated unemployment in the Baltics is primarily structural rather than cyclical.
- Policy-relevant factors implicated include:
- addressing skill mismatches between labor supply and employer demand
- reducing tax wedges that may discourage labor demand or supply
- mitigating unemployment and inactivity traps that reduce incentives to work
IMF Working Paper: "Unemployment and Structural Unemployment in the Baltics" (Working Paper No. 2014/153).
Content in this bundle
- _wp14153 - Section III. We find that, unlike in many other economies, high structural unemployment