Labor Market Flexibility and the Impact of the Financial Crisis
AbstractThe impact of the global financial crisis varies across countries. We examine whether cross-country differences in output loss and speed of recovery are affected by differences in labor market flexibility. By employing cross-country regressions and including control variables like trade and capital market integration, fiscal balance, financial vulnerability, and institutional differences, we find that lower hiring cost reduce the output loss, notably so in high-income countries. However, the duration of the crisis is longer in case of low dismissal cost, notably so in low-income countries.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Kyklos.
Volume (Year): 64 (2011)
Issue (Month): 2 (05)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962
Other versions of this item:
- I Kadek Dian Sutrisna Artha & Jakob de Haan, 2011. "Labor Market Flexibility and the Impact of the Financial Crisis," DNB Working Papers 280, Netherlands Central Bank, Research Department.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
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