TY  - RPRT
        AU  - Puhani, Patrick A.
        TI  - The Rise and Fall of Swiss Unemployment: Relative Demand Shocks, Wage Rigidities, and Temporary Immigrants
        PY  - 2003/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 684
        UR  - https://www.iza.org/index.php/publications/dp684
        AB  - Switzerland, traditionally a ‘zero unemployment’ economy, has seen an unprecedented rise
in joblessness in the 1990s although unemployment fell again to a rather low level after 1997.
This paper tests whether Switzerland experienced a negative relative net demand shock
against the low skilled (like the US) during this period. It turns out that only workers with an
educational level below apprenticeship were affected by such a shock. Furthermore, I test
whether wages reacted flexibly to this shock and find that they were rigid, which can explain
the relative unemployment increase for this group. Finally, I test whether the skill mix of
temporary immigrants was adjusted to the relative demand shock. The evidence suggests
that it was changed during the period around 1997 when unemployment peaked. By 2001,
however, the educational mix of temporary immigrants was not significantly different from its
1991 level any more, although relative unemployment for the least skilled was still relatively
high in face of the relative wage rigidity affecting this group.

        KW  - non-employment
KW  - rigidity
KW  - identification
KW  - foreigners
KW  - earnings
KW  - work permits
        ER  -