Labour Market Institutions and Economic Performance
AbstractBarely a day goes by without some expert telling us how the continental European economies are about to disintegrate unless their labour markets become more flexible. Basically, we are told, Europe has the wrong sort of labour market institutions for the modern global economy. These outdated institutions both raise unemployment and lower growth rates. The truth of propositions such as these depends on which labour market institutions really are bad for unemployment and growth, and which are not. Our purpose in this paper is to set out what we know about this question. Our conclusions indicate that the labour market institutions on which policy should be focused are unions and social security systems. Encouraging product market competition is a key policy to eliminate the negative effects of unions. For social security the key policies are benefit reform linked to active labour market policies to move people from welfare to work. By comparison, time spent worrying about strict labour market regulations, employment protection and minimum wages is probably time largely wasted.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0407.
Date of creation: Sep 1998
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Other versions of this item:
- Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
- Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers, Centre for Economic Performance & Institute of Economics 23, Centre for Economic Performance & Institute of Economics.
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Paro e instituciones laborales (I): Efecto nacional
by Samuel Bentolila in Nada Es Gratis on 2011-11-12 07:30:38
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