  This paper aims to estimate the impact of economic and financial crises on
the unemployment rate in the European Union, taking also into consideration the
institutional specificities, since unemployment was the main channel through
which the economic and financial crisis influenced the social developments.. In
this context, I performed two institutional clusters depending on their
inclusive or extractive institutional features and, in each cases, I computed
the crisis effect on unemployment rate over the 2003-2017 period. Both models
were estimated by using Panel Estimated Generalized Least Squares method, and
are weighted by Period SUR option in order to remove, in advance the possible
inconveniences of the models. The institutions proved to be a relevant
criterion that drives the impact of economic and financial crises on the
unemployment rate, highlighting that countries with inclusive institutions are
less vulnerable to economic shocks and are more resilient than countries with
extractive institutions. The quality of institutions was also found to have a
significant effect on the response of unemployment rate to the dynamic of its
drivers.
