Politics and the Labor Market: The Role of Frictions
AbstractWe study how political intermediation in the labor market interacts with search frictions. Politicians create and control (to a certain extent) business opportunities for firms, hence the creation of new vacancies. But to compete for these vacancies workers have to give their support to politicians. This leads to a fragmentation of the labor market, where politicians act as mediators between demand and supply. We show that in presence of information asymmetries (when non-aliated workers are not able to distinguish non-aliated firms, for which they are eligible, from aliated ones, for which they are not eligible) the impact of political intermediation is U-shaped, and can more than double the resulting unemployment rate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 53.
Length: 33 pages
Date of creation: 2006
Date of revision:
This paper has been announced in the following NEP Reports:
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.:
- Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
- Acemoglu, D. & Verdier, T., 1997.
"The Choice between Market Failures and Corruption,"
DELTA Working Papers
97-06, DELTA (Ecole normale supérieure).
- Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
- Mortensen, Dale T & Pissarides, Christopher, 1999.
"New Developments in Models of Search in the Labour Market,"
CEPR Discussion Papers
2053, C.E.P.R. Discussion Papers.
- Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
- Torsten Persson & Guido Tabellini & Francesco Trebbi, 2001.
"Electoral Rules and Corruption,"
CESifo Working Paper Series
416, CESifo Group Munich.
- Persson, Torsten & Tabellini, Guido & Trebbi, Francesco, 2001. "Electoral Rules and Corruption," CEPR Discussion Papers 2741, C.E.P.R. Discussion Papers.
- Torsten Persson & Guido Tabellini & Francesco Trebbi, . "Electoral Rules and Corruption," Working Papers 182, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Torsten Persson & Guido Tabellini & Francesco Trebbi, 2001. "Electoral Rules and Corruption," NBER Working Papers 8154, National Bureau of Economic Research, Inc.
- Goncalves Veiga, Linda & Chappell, Henry W, Jr, 2002. " Politics and Unemployment in Industrialized Democracies," Public Choice, Springer, vol. 110(3-4), pages 261-82, March.
- Pissarides, C A, 1984. "Efficient Job Rejection," Economic Journal, Royal Economic Society, vol. 94(376a), pages 97-108, Supplemen.
- repec:rie:review:v:5:y:2000:i:2:n:3 is not listed on IDEAS
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
- repec:rie:review:y:2000:v:2:i:3 is not listed on IDEAS
- Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
- Richard A. Posner, 1974.
"Theories of Economic Regulation,"
NBER Working Papers
0041, National Bureau of Economic Research, Inc.
- Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November.
- Richard Rogerson & Robert Shimer & Randall Wright, 2004. "Search-Theoretic Models of the Labor Market-A Survey," NBER Working Papers 10655, National Bureau of Economic Research, Inc.
- Laura Pagani, 2003. "Why Do People from Southern Italy Seek Jobs in the Public Sector?," LABOUR, CEIS, vol. 17(1), pages 63-91, 03.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Giovanni Bert).
If references are entirely missing, you can add them using this form.