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The Impact of Labour Market Policies on Productivity in OECD Countries

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Author Info
Andrea Bassanini
Danielle Venn

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Abstract

We investigate the impact of labour market policies on labour and multifactor productivity with industry-level data. First and foremost, labour market policies can influence average measured productivity through their impact on employment. Other things equal, employment growth tends to be associated with lower average measured labour productivity growth as more low-skilled workers enter the workforce. However, policies can also have sizeable direct effects on individual productivity levels and/or growth by creating incentives for workers to invest in training, facilitating reallocation of resources to their most productive uses and generating or maintaining high-quality job matches. We find that employment protection legislation, minimum wages, parental leave and unemployment benefits influence productivity through multiple channels, over and above their impact on employment levels.

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File URL: http://www.csls.ca/ipm/17/IPM-17-bassanini.pdf
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Publisher Info
Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 17 (2008)
Issue (Month): (Fall)
Pages: 3-15
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Handle: RePEc:sls:ipmsls:v:17:y:2008:1

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Related research
Keywords: Regulation; Labour Market; Productivity; OECD;

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Find related papers by JEL classification:
P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
O38 - Economic Development, Technological Change, and Growth - - Technological Change - - - Government Policy

References listed on IDEAS
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