Labour Market Institutions and their Effect on Labour Market Performance in the New EU Member Countries
AbstractThis article focuses on the role of labour market institutions in explaining different labour market developments in European countries, with a special attention to the new European Union member countries. This may allow us to analyse effects of various institutional setups and of their changes on major labour market indicators. We aim at complementing several studies from the late 1990’s by using more recent data that allow us to compare institutional setups from the mid 1990’s and early 2000’s both in “old” and “new” EU member states. We estimate effects of labour market institutions on various performance indicators (unemployment, long-term unemployment, employment, activity rate). Our results confirm that high taxes increase unemployment, while active labour market policies tend to reduce it. We also show that stricter employment protection, higher taxes and larger economic burden represented by the minimum wage decrease employment and activity rate. Moreover, statistical tests indicate that there is a difference in the institutional effects between “old” and “new” EU members.
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 CESifo Group Munich in its series CESifo Working Paper Series with number 2421.
Date of creation: 2008
Date of revision:
labour market; unemployment; European Union; labour market institutions;
Other versions of this item:
- Kamila FialovÃ¡ & OndÅej Schneider, 2009. "Labor Market Institutions and Their Effect on Labor Market Performance in the New EU Member Countries," Eastern European Economics, M.E. Sharpe, Inc., vol. 47(3), pages 57-83, May.
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
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.:
- Alan Manning, 1994.
"How do we Know that Real Wages are Too High?,"
CEP Discussion Papers
dp0195, Centre for Economic Performance, LSE.
- Richard B. Freeman, 2008.
"Labor market institutions around the world,"
LSE Research Online Documents on Economics
19647, London School of Economics and Political Science, LSE Library.
- Richard B. Freeman & Edward P. Lazear, 1994.
"An Economic Analysis of Works Councils,"
NBER Working Papers
4918, National Bureau of Economic Research, Inc.
- Michael Lechner & Conny Wunsch, 2009. "Active labour market policy in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 661-702, October.
- Saint-Paul, Gilles, 1996. "Understanding Labour Market Institutions: A Political Economy Perspective," CEPR Discussion Papers 1438, C.E.P.R. Discussion Papers.
- Blanchard, Olivier & Wolfers, Justin, 2000.
"The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,"
Royal Economic Society, vol. 110(462), pages C1-33, March.
- Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
- Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
- Tito Boeri, 2005. "Reforming Labor and Product Markets," IMF Working Papers 05/97, International Monetary Fund.
- Cahuc, P. & Michel, P., 1992.
"Minimum Wage, Unemployment and Growth,"
Papiers d'Economie MathÃÂ©matique et Applications
92.35, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Rachel Griffith & Rupert Harrison & Gareth Macartney, 2007.
"Product Market Reforms, Labour Market Institutions and Unemployment,"
Royal Economic Society, vol. 117(519), pages C142-C166, 03.
- Rachel Griffith & Rupert Harrison & Gareth Macartney, 2006. "Product market reforms, labour market institutions and unemployment," IFS Working Papers W06/06, Institute for Fiscal Studies.
- Griffith, Rachel & Harrison, Rupert & Macartney, Gareth, 2006. "Product Market Reforms, Labour Market Institutions and Unemployment," CEPR Discussion Papers 5599, C.E.P.R. Discussion Papers.
- Sandrine Cazes & Alena Nesporova, 2004. "Labour markets in transition: balancing flexibility and security in Central and Eastern Europe," Revue de l'OFCE, Presses de Sciences-Po, vol. 91(5), pages 23-54.
- Francesco Daveri & Guido Tabellini, .
"Unemployment, Growth and Taxation in Industrial Countries,"
122, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Francesco Daveri & Guido Tabellini, 2000. "Unemployment, growth and taxation in industrial countries," Economic Policy, CEPR & CES & MSH, vol. 15(30), pages 47-104, 04.
- Daveri, Francesco & Tabellini, Guido, 1997. "Unemployment, Growth and Taxation in Industrial Countries," CEPR Discussion Papers 1681, C.E.P.R. Discussion Papers.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780198284345.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
- Teulings,Coen & Hartog,Joop, 2008.
"Corporatism or Competition?,"
Cambridge University Press, number 9780521049399, October.
- Rebitzer, James B. & Taylor, Lowell J., 1995.
"The consequences of minimum wage laws Some new theoretical ideas,"
Journal of Public Economics,
Elsevier, vol. 56(2), pages 245-255, February.
- James B. Rebitzer & Lowell J. Taylor, 1991. "The Consequences of Minimum Wage Laws: Some New Theoretical Ideas," NBER Working Papers 3877, National Bureau of Economic Research, Inc.
- Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
- Nicola Brandt & Jean-Marc Burniaux & Romain Duval, 2005. "Assessing the OECD Jobs Strategy: Past Developments and Reforms," OECD Economics Department Working Papers 429, OECD Publishing.
- Howell David R. & Baker Dean & Glyn Andrew & Schmitt John, 2007. "Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence," Capitalism and Society, De Gruyter, vol. 2(1), pages 1-73, May.
- Cristiano Perugini & Ekaterina Selezneva, 2013. "Labour Market Institutions, Crisis and Gender Earnings Gap in Eastern Europe," Working Papers 328, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
- Alfonso Arpaia & Gilles Mourre, 2009.
"Institutions and performance in European labour markets: taking a fresh look at evidence,"
European Economy - Economic Papers
391, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Alfonso Arpaia & Gilles Mourre, 2012. "Institutions And Performance In European Labour Markets: Taking A Fresh Look At Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 1-41, 02.
- Alfonso Arpaia & Gilles Mourre, 2009. "Institutions and Performance in European Labour Markets: Taking a Fresh Look at Evidence," Working Papers CEB 09-049.RS, ULB -- Universite Libre de Bruxelles.
- H. Lehmann & A. Muravyev, 2010. "Labor market institutions and labor market performance: what can we learn from transition countries?," Working Papers 714, Dipartimento Scienze Economiche, Universita' di Bologna.
- Hazans, Mihails, 2011.
"What explains prevalence of informal employment in European countries : the role of labor institutions, governance, immigrants, and growth,"
Policy Research Working Paper Series
5917, The World Bank.
- Hazans, Mihails, 2011. "What Explains Prevalence of Informal Employment in European Countries: The Role of Labor Institutions, Governance, Immigrants, and Growth," IZA Discussion Papers 5872, Institute for the Study of Labor (IZA).
- Fialova, Kamila & Schneider, Ondrej, 2011.
"Labor institutions and their impact on shadow economies in Europe,"
Policy Research Working Paper Series
5913, The World Bank.
- Kamila Fialová, 2010. "Labor Institutions and their Impact on Shadow Economies in Europe," Working Papers IES 2010/29, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Dec 2010.
- Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT Institute for Advanced Studies Lucca, revised Jun 2013.
- Bergljot Barkbu & Jesmin Rahman & Rodrigo O. ValdÃ©s, 2012. "Fostering Growth in Europe Now," IMF Staff Discussion Notes 12/07, International Monetary Fund.
- Kamila Fialová & Martina Mysíková, 2009. "The Minimum Wage: Labor Market Consequences in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(3), pages 255-274, August.
- Macit, Fatih, 2011.
"Labor Market Institutions and Labor Productivity Growth,"
31727, University Library of Munich, Germany.
- Fatih Macit, 2012. "Labor Market Institutions and Labor Productivity Growth," Economic Research Guardian, Weissberg Publishing, vol. 2(1), pages 121-128, May.
- Gill, Indermit & Koettl, Johannes & Packard, Truman, 2013. "Full Employment: A Distant Dream for Europe," IZA Discussion Papers 7663, Institute for the Study of Labor (IZA).
- Lehmann, Hartmut & Muravyev, Alexander, 2011.
"Labor Markets and Labor Market Institutions in Transition Economies,"
IZA Discussion Papers
5905, Institute for the Study of Labor (IZA).
- H. Lehmann & A. Muravyev, 2011. "Labor markets and labor market institutions in transition economies," Working Papers wp783, Dipartimento Scienze Economiche, Universita' di Bologna.
- Jens Holscher & Cristiano Perugini & Fabrizio Pompei, 2011. "Wage inequality, labour market flexibility and duality in Eastern and Western Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 23(3), pages 271-310.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.