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Labour Market Institutions and the Employment Intensity of Output Growth. An International Comparison

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Author Info
Flaig, Gebhard / Rottmann, Horst

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Abstract

This paper deals with the effects of labour market institutions on labour market performance. We analyse as an indicator for the labour intensity of output growth the employment threshold (the minimum growth rate of output necessary to keep employment constant). We show for a sample of 17 OECD countries for the period 1971 to 2002 that the strictness of employment protection raises the employment threshold in all econometric specifications. A higher wage bargaining coordination and a higher tax wedge reduce also the labour intensity of production, although the effects are not significant in all econometric specifications.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2175.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2175

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Related research
Keywords: employment protection; labour market institutions; labour demand; international comparison; employment threshold;

References listed on IDEAS
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  1. Ricardo J. Caballero & Kevin N. Cowan & Eduardo M.R.A. Engel & Alejandro Micco, 2004. "Effective Labor Regulation and Microeconomic Flexibility," Cowles Foundation Discussion Papers 1480, Cowles Foundation, Yale University, revised Oct 2006. [Downloadable!]
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  2. Stephen Nickell, 2003. "Labour Market Institutions and Unemployment in OECD Countries," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 1(2), pages 13-26, October. [Downloadable!]
  3. Belot, Michèle & van Ours, Jan C., 2000. "Does the Recent Success of Some OECD Countries in Lowering their Unemployment Rates Lie in the Clever Design of their Labour Market Reform?," IZA Discussion Papers 147, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August. [Downloadable!] (restricted)
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  5. Rachel Griffith & Rupert Harrison & Gareth Macartney, 2007. "Product Market Reforms, Labour Market Institutions and Unemployment," Economic Journal, Royal Economic Society, vol. 117(519), pages C142-C166, 03. [Downloadable!] (restricted)
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  6. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March. [Downloadable!] (restricted)
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  7. Julián Messina, 2004. "Institutions and service employment - a panel study for OECD countries," Working Paper Series 320, European Central Bank. [Downloadable!]
  8. Giuseppe Bertola & Francine D. Blau & Lawrence M. Kahn, 2001. "Comparative Analysis of Labor Market Outcomes: Lessons for the US from International Long-Run Evidence," NBER Working Papers 8526, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Lawrence Kahn, 2003. "Labour Market Institutions and Unemployment in OECD Countries," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 1(4), pages 25-32, October. [Downloadable!]
  10. Gebhardt Flaig & Horst Rottmann, 2001. "Input Demand and the Short- and Long-Run Employment Thresholds: An Empirical Analysis for the German Manufacturing Sector," German Economic Review, Blackwell Publishing, vol. 2(4), pages 367-384, November. [Downloadable!] (restricted)
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