European Economic Integration and the Effectiveness of Employment Policies
AbstractThis paper examines the qualitative impact and the degree of effectiveness of several labor market policies when domestic unionâ€™s wage response and economic integration are explicitly taken into account. The employment policies considered include payroll tax cuts, unemployment benefits cuts, aggregate demand expansion and wage subsidies. It is shown that with endogenous wages and an open economy, these policies can in some cases become more potent. But in other instances, they become less effective. In fact, under some conditions derived in this paper, employment policies can even be counterproductive, leading to a drop in domestic employment.
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Bibliographic InfoPaper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number qt0tp8k3c5.
Date of creation: 20 Mar 2003
Date of revision:
European unemployment; economic integration; labor market;
Other versions of this item:
- Fung, K.C. & C. Lin, Chelsea, 2005. "European Economic Integration and the Effectiveness of Employment Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 419-438.
- Fung, K. C. & Lin, Chelsea C. & Maechler, Andrea M., 2003. "European Economic Integration and the Effectiveness of Employment Policies," Santa Cruz Center for International Economics, Working Paper Series qt0tp8k3c5, Center for International Economics, UC Santa Cruz.
- F15 - International Economics - - Trade - - - Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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