The recent labour-market performance varies greatly between the United States and continental Europe on the one hand, and between the low- and high-skilled on the other. This book starts by presenting up-to-date empirical evidence on these stylised factsand on the importance of the intensity of product-market competition for the labour market. It then integrates models of union wage bargaining, efficiency wages and matching with modern analyses of imperfect competition on product markets. Subsequently, the analysis is extended to include the effects of exogenous and endogenous productivity growth as well as skill-based technological change. This makes it possible to not only explain the influence of product-market competition and growth on aggregate unemployment, but also how they affect the unemployment rates for the low- and high-skilled differently.

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