SWITZERLAND

Group 16
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UNEMPLOYMENT
jenna defalco

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UNEMPLOYMENT SWITZERLAND
INTRODUCTION Unemployment rate Switzerland
6

Unemployment insurance
policy 5

2nd best performing country in

terms of employment rate 4

and job availability.

High female participation 3

2nd lowest poverty rate

2

0
1970 1980 1990 2000 2010 3 2020 203
UNEMPLOYMENT TREND IN SWITZERLAND
POST WORLD WAR 2 (1970-1985)

Low unemployment rate after world war 2.

The lowest unemployment rate recorded was 0.2% in 1980 and 1981.
Expected unemployment rate in Switzerland is expected to remain
stable over the course of next years.

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FACTORS CONTRIBUTING TO LOW
UNEMPLOYMENT IN SWITZERLAND (2000-
2022)

Strong economy
High productivity
Skilled workforce
Flexible labor market
Social safety net

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CHALLENGES TO MAINTAINING LOW
UNEMPLOYMENT IN SWITZERLAND

Aging population
Rising automation
Global competition

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POLICIES TO MAINTAIN LOW
UNEMPLOYMENT IN SWITZERLAND

Invest in education and training

Promote lifelong learning
Facilitate labor mobility
Attract skilled immigrants

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INFLATION
Victor Alade

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MONEY AND INFLATION IN
SWITZERLAND

The study aims to quantify the relative influence of the monetary policy
stance measure on inflation and economic activity in Switzerland since the
mid-1970s.
Traditional forms of money demand and quantity theory relationships have
remained stable over the past four decades.
Despite the low interest rate environment, broad money excesses over
trend values have led to persistently higher inflation and output with typical
monetary policy transmission lags.

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INFLATION IN SWITZERLAND OVER THE YEARS

IN THE NINETEENTH CENTURY, SWITZERLAND EXPERIENCED HIGH INDUSTRIAL EMPLOYMENT AND SUCCESSFUL
ENGAGEMENT IN INTERNATIONAL MARKETS.
SWITZERLAND UNDERWENT INDUSTRIALIZATION, TRANSITIONING FROM A NET EMIGRATION TO A NET
IMMIGRATION COUNTRY.

ANALYSIS
THE MONETARY SYSTEM OF SWITZERLAND WAS ESTABLISHED DURING THIS PERIOD, WITH THE COUNTRY
BECOMING A FOUNDING MEMBER OF THE LATIN MONETARY UNION IN 1865.
THE BANKNOTE ACT OF 1881 STANDARDIZED NOTE ISSUANCE AND REQUIRED CONVERTIBILITY OF ALL BANK
NOTES AT PAR.
PRICES REMAINED STEADY AT CLOSE TO THE LEVEL IN THE 1850S UNTIL THE OUTBREAK OF THE FIRST WORLD
WAR.
DURING THE WAR, THE SUSPENSION OF GOLD CONVERTIBILITY BY MANY COUNTRIES IMPACTED SWITZERLAND
AS AN EXPORTING ECONOMY, LEADING TO FLUCTUATING EXPORTS, IMPORTS, AND MORE THAN DOUBLED
PRICES.

Graphical Analysis

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SWITZERLAND CPI INDEX

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FACTORS THAT CONTRIBUTE TO
SWITZERLAND INFLATION RATE

The international liberalization of capital markets following the collapse of Bretton Woods provided a
strong growth impetus for Switzerland as an international financial center.
Structural changes in the 1970s included measures to control immigration and a reduction in labor
market flexibility, leading to increased incentives for companies to relocate production abroad.
In the 1980s, employment growth was driven by an increase in foreign workers and labor force
participation among women. The SNB maintained a looser policy due to concerns about the international
economic environment, which led to inflation and a housing bubble in the early 1990s.
In the 1990s, structural changes led to a decline in the share of domestic industry in GDP and an increase
in the share of export industry. Export-oriented services accounted for most of the economic growth
during this period.
By the end of the 1990s, inflation was low, and the SNB adopted a policy strategy similar to inflation
targeting.
The global economic downturn following the failure of Lehman Brothers in 2008 and the sovereign debt
crisis in the euro area affected the Swiss economy. Low oil prices and the risk of deflation increased.

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SWITZERLAND REAL GDP GROWTH AND
INFLATION
THE FIRST WORLD WAR AND INTERWAR PERIOD BROUGHT BACK VOLATILITY, WITH LOWER GDP GROWTH
AVERAGING 0.97% AND INCREASING INFLATION AVERAGING 1.26%.
THE SECOND WORLD WAR LED TO INCREASED INFLATION AND REAL GDP GROWTH, WITH MODEST AVERAGE
GROWTH OF 1.27% AND STRONG PRICE GROWTH AVERAGING 6.09%.
DURING THE POST-WAR BRETTON WOODS PERIOD, BOTH REAL GDP GROWTH AND INFLATION VOLATILITY

REAL GDP IN RELATION TO INFLATION DECLINED. INFLATION FELL TO JUST OVER 2% WHILE REAL GDP GROWTH INCREASED STRONGLY WITH AN
AVERAGE RATE OF 4.58%.
THE SUBSEQUENT PERIOD SAW A DECLINE IN AVERAGE GROWTH TO 1.71%, REDUCED GDP GROWTH
VOLATILITY, AND LOW INFLATION REMAINING.

Real GDP

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GROSS DOMESTIC
PRODUCT
Kelsi Walker

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1945 -1960: POST WORLD WAR 2
https://www.youtube.com/watch?v=Aq1fxGPoaEg&ab_channel=Knowledgia
During WWII Trade which contributed a large
portion of Switzerland's GDP was extremely limited
since the country was in the center of both sides of
the war both sides were contributing to limiting its
trade since Switzerland remained neutral.4
After the war ended there was a significant 24% gain
in GDP allowing the country to regrow its economy
from how it was limited.4
Post World War II the Swiss government had made
an agreement in 1946 to compensate the looted
western European Central bank 250 million Swiss
francs. HIgh level of government spending the did
not go back into the swiss economy.3
In the 1950s Switzerland’s average GDP growth was
5% and it began to use imported fossil fuels as its
main energy source rather than coal.4
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1 9 6 1 - 1 9 8 0 : E N E R G Y C R I S I S A N D T H E R E L I A N C E O N I M P O RT E D O I L

GDP growth averaged 4% in the 1960’s and

Switzerland was nearly completely dependent on
foreign oil, 75% of its energy production came from
this area.4
In 1970 Switzerland had a peak growth rate of 6.5%,
then it proceeded to fall by 7.5% in 1975 and 1976.4
The energy industry had employed 46% of the labor
force of Switzerland during this time.
Due to the international oil crisis and since
Switzerland became dependent on Imported oil
caused the countries energy consumption to
decrease from 1973 to 1978.4
Switzerland’s GDP did not start to grow again until
1977
Another effect or the energy crisis caused the
service industry to gain more employment.
https://www.caribbeannewsglobal.com/lower-oil-reliance-insulates-world-from-1970s-style-crude-shock/

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1980 - 1995: GLOBAL RECESSION OF 1991 AND ITS IMPACTS

For all but three years in the 1980’s

Switzerland's GDP grew by 3-4%.
Switzerland had the slowest growth in the
1990’s in Western Europe. The country having
a three year recession from 1991-1993. 1991
was also a global recession.
Less exports along with banks being more
cautious lending funds are some of the
reasons for the downturn.6
Due to inflation real wages had decreased
several times in this period. Which would
have in impact on how much consumer
spending could be made.4
https://sjes.springeropen.com/articles/10.1186/s41937-021-00077-x

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1 9 9 5 - 2 0 1 0 : G L O B A L C U R R E N C Y T R A D E A N D I M PAC T S O F 9 / 1 1

Switzerland: Gross domestic product (GDP) in current prices from 1987 to 2028

In 1997 a global resurgence due to currency

movement gave Switzerland an opportunity for
growth.
9/11 caused a worldwide stock market crash
causing GDP to drop again from 2001- 2003
Mass company layoffs during this time as well
contributed to lower consumer spending and a
poor labor market.

https://www.statista.com/statistics/263589/gross-domestic-product-gdp-in-switzerland/

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2010 - CURRENT

- Switzerland has on of the highest GDP per

capita.
- Approximately 74% of Swiss GDP is generated
by the services sector and 25% by industry. The
agricultural sector contributes less than 1%.7
- GDP is projected to grow by 0.6% in 2023 and
1.4% in 2024.4
- Concerns for growth for Switzerland is Russia’s
war with Ukraine, higher labor costs, and higher
https://www.eda.admin.ch/aboutswitzerland/en/home/wirtschaft/uebersicht/wirtschaft---fakten-und-
zahlen.html#:~:text=Approximately%2074%25%20of%20Swiss%20GDP,exports%20are%20to%20EU%20countries.
electronic costs.4

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REFERENCES

Di Nallo, A., Lipps, O., Oesch, D., & Voorpostel, M. (2020). The effect of unemployment on couples
separating. Panel evidence for Germany, Switzerland and the United Kingdom (Vol. 14, p. 2020).
DIAL Working Paper Series.
Faďoš, M., & Bohdalová, M. (2018). Duration of Unemployment and Gender Inequality:
Evidence from the European Union, Spain and Switzerland.
Hyggen, C., Imdorf, C., Parsanaglou, D., Sacchi, S., Samuel, R., Stoilova, R., ... & Yordanova, G.
(2016). Understanding unemployment scars: A vignette experiment of employers’ decisions in
Bulgaria, Greece, Norway and Switzerland.
Karaman Örsal, D. D., & Goldstein, J. R. (2018). The changing relationship between
unemployment and total fertility. Population studies, 72(1), 109-121.
Korber, M., & Oesch, D. (2019).Vocational versus general education: Employment and earnings
over the life course in Switzerland. Advances in Life Course Research, 40, 1-13.

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REFERENCES

"Inflation in Switzerland." Schweizerische Zeitschrift Für Volkswirtschaft Und Statistik 158.1

(2022): 1-13. Web.
https://arizona-
primo.hosted.exlibrisgroup.com/permalink/f/1h28lag/TN_cdi_doaj_primary_oai_doaj_org_article
_22d551f3b81a405b82b740b48472e01a

Stuart, Rebecca. "160 Years of Aggregate Supply and Demand in Switzerland."

Schweizerische Zeitschrift Für Volkswirtschaft Und Statistik 158.1 (2022): 1-14. Web.
https://arizona-
primo.hosted.exlibrisgroup.com/permalink/f/1h28lag/TN_cdi_doaj_primary_oai_doaj_org_article
_e1e2ef05ab95423db0b113ac9b30a3a5

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REFERENCES

- (1)https://www.heritage.org/index/country/switzerland#:~:text=Switzerland%20has%20one%20of%20the,pharmaceuticals%2
C%20chemicals%2C%20and%20electronics.
- https://www.statista.com/statistics/263589/gross-domestic-product-gdp-in-switzerland/

- (2) https://www.oecd.org/economy/switzerland-economic-snapshot/
- (3)https://www.britannica.com/place/Switzerland/World-War-I-and-economic-crisis
- (4)https://www.themarketforideas.com/is-neutrality-the-answer-switzerlands-economy-in-the-aftermath-of-the-world-wars-
war-creatures-great-and-small-ii-a806/
- (5) https://www.caribbeannewsglobal.com/lower-oil-reliance-insulates-world-from-1970s-style-crude-shock/
- (6)https://sjes.springeropen.com/articles/10.1186/s41937-021-00077-x
- (7) https://www.eda.admin.ch/aboutswitzerland/en/home/wirtschaft/uebersicht/wirtschaft---fakten-und-
zahlen.html#:~:text=Approximately%2074%25%20of%20Swiss%20GDP,exports%20are%20to%20EU%20countries.

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