Factors Accounting for the Rise of Unemployment in Austria
The unfavourable development of the Austrian labour market in the 1990s is attributable to a number of macro-economic factors. The rise of unemployment is a reflection of the relatively low average rate of economic growth and the 1993 recession. The productivity of labour increased at an accelerated pace in the course of Austria's growing integration with the economies of Western and Eastern Europe. Unemployment failed to decline even during the period of relative boom in 1997-98. This development is due, above all, to the following causes: • increased supply of labour as a result of the shortened period of entitlement to parental leave allowance, and a more restrictive policy with regard to early retirement; • the rate of unemployment has not reacted noticeably to high employment growth in the service sector, because the quality of the new jobs created fails to meet the expectations of the unemployed in terms of working hours and wages. (Many part-time jobs have been created in retail trade and other service sectors, but the majority of job-seekers are looking for full-time employment.) • A persistently high rate of unemployment in Vienna, a region particularly affected by staff cuts in the public sector, restructuring measures taken by major industrial and service enterprises and subsequent relocation, and a high share of private-sector service enterprises. The rise of unemployment between 1996 and 1998 was most pronounced in three areas: higher age groups, women, and Vienna. It should not, however, be taken as an indication of a general deterioration of the labour-market situation: finding a job was certainly easier in 1998 than before, as is indicated not only by the development of employment, but also by the number of vacant jobs. The rise of unemployment was due, above all, to institutional factors. Cuts of special support measures and a more restrictive policy with regard to early retirement meant that older job-seekers remained on record as unemployed, instead of retiring from working life. At the same time, the shortened period of entitlement to parental leave allowance resulted in a strong increase in the number of women wanting to re-enter the labour market. Hence, the rise of unemployment in 1997 and 1998 is primarily attributable to the fact that beneficiaries of social services, whose availability to the labour market is very limited or non-existent, have become more highly dependent on unemployment benefits for their subsistence since the adoption of the "austerity package". The impact on unemployment figures has been largely statistical in nature and can therefore be qualified as a form of "re-labelling".
Bestimmungsgründe des Anstiegs der Arbeitslosigkeit in Österreich; Factors Accounting for the Rise of Unemployment in Austria
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