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Structural Shifts and Unemployment in Switzerland

  • Economics


113 Schweizerische Zeitschrift für Volkswirtschaft und Statistik Revue suisse d'Economie politique et de Statistique Herausgegeben von der Schweizerischen Gesellschaft fiir Statistik und Volkswirtschaft Publiée par la Société suisse de Statistique et d'Economie politique Redaktion/Rédaction: Prof Dr. E. Baltensperger 125. Jahrgang 125 e année Heft/Fase. 2 Juni/Juin 1989 Structural Shifts and Unemployment in Switzerland By Dominique M. Gross, Swiss National Bank* 1. Introduction Unemployment may not appear as the main concern in the Swiss economy, however, casual evidence tend to suggest that developments on the Swiss labour market during the past decade may be consistent with some recent analyses of unemployment. On the one hand, the level of unemployment showed quite large variations. For example, the number of registered unemployed decreased by 50% between 1977 and 1980 and increased six-fold between 1980 and 19841. On the other hand, the structure of the economy changed substantially during the same period. Between 1975 and 1986, the share of manufacturing and construction in employment declined by 7.2% and 14% respectively whereas the share of most services rose drastically. In particular, the share of banks and insurances increased by 35.7 % and 30.8 % respectively. In view of these observations, it seems interesting to analyse whether there is some relationship between the relatively large variations in the level of unemployment and the changing structure of the Swiss economy. Blattner (1977), Flächiger et al. (1986) and Sheldon (1988) have already studied the problem using approaches different from the one proposed here. Lilien (1982) shows that, during the seventies, structural shifts have been responsible for a substantial portion of the increase in observed unemployment in the United States. The aim of this paper is to test econometrically whether this hypothesis holds when using Swiss data. However, this study is not a simple replica of t

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