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Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?

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Author Info
Giuseppe Fiori () (Boston College)
Giuseppe Nicoletti (OECD)
Stefano Scarpetta (OECD, IZA)
Fabio Schiantarelli () (Boston College, IZA)

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Abstract

This paper provides a systematic empirical investigation of the effect of product market liberalization on employment when there are interactions between policies and institutions in product and labor markets. Using panel data for OECD countries over the period 1980-2002, we present evidence that product market deregulation is more effective at the margin when labor market regulation is high. Moreover, there is evidence in our sample that product market deregulation promotes labor market deregulation. We show that these results are mostly consistent with the basic predictions of a standard bargaining model (e.g. Blanchard and Giavazzi (2003)), once one allows for a full specification of the fall back position of the unions.

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Publisher Info
Paper provided by Boston College Department of Economics in its series Boston College Working Papers in Economics with number 663.

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Length: 43 pages
Date of creation: 23 Apr 2007
Date of revision: 08 Aug 2008
Handle: RePEc:boc:bocoec:663

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Related research
Keywords: Employment; Competition; Deregulation; Liberalization; Unions;

Other versions of this item:

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  4. Romain Duval & Jørgen Elmeskov, 2005. "The Effects of EMU on Structural Reforms in Labour and Product Markets," OECD Economics Department Working Papers 438, OECD, Economics Department. [Downloadable!]
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    Other versions:
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  15. Schiantarelli, Fabio, 2005. "Product market regulation and macroeconomic performance : a review of cross-country evidence," Policy Research Working Paper Series 3770, The World Bank. [Downloadable!]
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  19. Nicholas Crafts, 2006. "Regulation and Productivity Performance," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 186-202, Summer.
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  21. Takeshi Koyama & Stephen S. Golub, 2006. "OECD's FDI Regulatory Restrictiveness Index: Revision and Extension to more Economies," OECD Working Papers on International Investment 2006/4, OECD, Directorate for Financial and Enterprise Affairs. [Downloadable!]
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alberto Alesina & Silvia Ardagna & Vincenzo Galasso, 2008. "The Euro and Structural Reforms," Working Papers 344, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
    Other versions:
  2. Prantl, Susanne & Spitz-Oener, Alexandra, 2009. "How Does Entry Regulation Influence Entry into Self-Employment and Occupational Mobility?," IZA Discussion Papers 4221, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Silvia Ardagna & Annamaria Lusardi, 2008. "Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints," NBER Working Papers 14012, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Monique Ebell & Christian Haefke, 2008. "Product Market Deregulation and the U.S. Employment Miracle," CEP Discussion Papers dp0874, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  5. Runli Xie, 2009. "Trade-Off Between Consumption Growth and Inequality: Theory and Evidence for Germany," SFB 649 Discussion Papers SFB649DP2009-034, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
  6. Petya Koeva Brooks & Iryna V. Ivaschenko, 2008. "Corporate Governance Reforms in the EU: Do They Matter and How?," IMF Working Papers 08/91, International Monetary Fund. [Downloadable!]
  7. Andrea Bassanini & Romain Duval, 2009. "Unemployment, institutions and reform complementarities: Re-assessing the aggregate evidence for OECD countries," Post-Print halshs-00395144_v1, HAL. [Downloadable!]
    Other versions:
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