ABSTRACT
This chapter provides an institutionalist framework for understanding industrial unemployment. The participation model and insider-outsider models explain industrial unemployment as the outcome of opposing competitive groups in the labour market. Despite the centrality of the wage relation in the Marxist theory, wages alone are attributed a marginal role in explaining unemployment. Wage rigidity, with its negative effects on employment levels, is to be attributed mainly, although not exclusively, to employment relations regulating wages and conditions of labour. As the concept of regulation takes form at the macro-economic level, the employment relationship becomes the key macro-historic form to investigate and understand capitalist dynamics. A different reading of industrial restructuring and employment change emerges from the interpretation of the Schumpeterian theory of business cycles. Contrary to the neo-classical position, the Keynesian conceptualization leaves room for institutional intervention, namely demand-side policies which, by stimulating industrial activity, would positively affect employment dynamics.
