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Determinants of the Rise of Unemployment in Austria

  • Economics


Throughout the 1990s, the labour market has shown an unfavourable development, with unemployment noticeably on the increase. Until 1997, the main reasons underlying this development were a relatively low average rate of economic growth, the 1993 recession, and strong productivity increases in the private sector. In 1997-98, however, unemployment continued to rise despite a favourable economic development. This was due, above all, to the substantially increased labour supply (shortened period of entitlement to parental leave allowance, a more restrictive policy regarding early retirement), the emphasis on part-time employment in the service sector, as well as staff cuts (public sector) and restructuring measures (headquarters of large industrial and service enterprises) in Vienna.

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