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Labour Market Performance and Start-up Costs: OECD Evidence

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Author Info
Paloma Lopez-Garcia

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Abstract

This paper is intended to make a contribution to the empirical literature explaining the rise of unemployment since the 1970s in western economies by means of interactions between shocks and institutions. The contribution is twofold. First, the impact of a general feature of developed economies that has been surprisingly neglected in the literature is analyzed, namely, the employment shift from industry and agriculture to services. The second contribution of the paper is the focus on the interaction of that shock with the administrative burdens on firm creation. The working hypotheses is that countries that impose high costs on the creation of new companies are not able to create enough jobs in the service sector to successfully absorb the workers released from the agriculture and industry sector. The result is higher unemployment.

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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. 849.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_849

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Related research
Keywords: macroeconomics of unemployment; panel data; start-up costs;

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Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
K20 - Law and Economics - - Regulation and Business Law - - - General

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References listed on IDEAS
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.:
  1. Stefano Scarpetta & Philip Hemmings & Thierry Tressel & Jaejoon Woo, 2002. "The Role of Policy and Institutions for Productivity and Firm Dynamics: Evidence from Micro and Industry Data," OECD Economics Department Working Papers 329, OECD, Economics Department. [Downloadable!]
  2. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August. [Downloadable!] (restricted)
  3. Simeon Djankov & Rafael La Porta & Florencio LopezdeSilanes & Andrei Shleifer, 2000. "The Regulation of Entry," NBER Working Papers 7892, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Paloma Lopez-Garcia, 2003. "Labour Market Performance and Start-up Costs: OECD Evidence," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  5. Marimon, Ramon & Zilibotti, Fabrizio, 1998. "'Actual' versus 'virtual' employment in Europe Is Spain different?," European Economic Review, Elsevier, vol. 42(1), pages 123-153, January. [Downloadable!] (restricted)
    Other versions:
  6. Giuseppe Nicoletti & Stefano Scarpetta & Olivier Boylaud, 2000. "Summary Indicators of Product Market Regulation with an Extension to Employment Protection Legislation," OECD Economics Department Working Papers 226, OECD, Economics Department. [Downloadable!]
  7. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150, March.
  8. Baumol, William J & Blackman, Sue Anne Batey & Wolff, Edward N, 1985. "Unbalanced Growth Revisited: Asymptotic Stagnancy and New Evidence," American Economic Review, American Economic Association, vol. 75(4), pages 806-17, September. [Downloadable!] (restricted)
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  9. Piyabha Kongsamut & Danyang Xie & Sergio Rebelo, 2001. "Beyond Balanced Growth," IMF Working Papers 01/85, International Monetary Fund.
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  10. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-46, February. [Downloadable!] (restricted)
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  11. Siebert, Horst, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer. [Downloadable!] (restricted)
  12. 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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  13. Nickell, Stephen, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer. [Downloadable!] (restricted)
  14. Bean, C R & Layard, P R G & Nickell, S J, 1986. "The Rise in Unemployment: A Multi-country Study," Economica, London School of Economics and Political Science, vol. 53(210(S)), pages S1-22, Supplemen. [Downloadable!] (restricted)
  15. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Raquel Fonseca & Natalia Utrero González, 2004. "Do Market Regulation and Financial Imperfections Affect Firm Size? New Empirical Evidence," CSEF Working Papers 119, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
  2. Paloma Lopez-Garcia, 2002. "Labour Market Performance and Start-Up Costs: OECD Evidence," CEP Discussion Papers dp0565, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  3. Tobias Linzert, 2005. "The Unemployment Inflation Trade-Off in the Euro Area," IZA Discussion Papers 1699, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Rutkowski, Jan, 2004. "Firms, jobs, and employment in Moldova," Policy Research Working Paper Series 3253, The World Bank. [Downloadable!]
  5. Winfried Koeniger & Julien Prat, 2006. "Employment Protection, Product Market Regulation and Firm Selection," IZA Discussion Papers 1960, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Christopher A. Pissarides, 2003. "Unemployment in Britain: A European Success Story," CEP Discussion Papers dp0600, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  7. Antonello D’Agostino & Roberta Serafini & Melanie Ward-Warmedinger, 2006. "Sectoral explanations of employment in Europe - the role of services," Working Paper Series 625, European Central Bank. [Downloadable!]
    Other versions:
  8. D'Agostino, Antonello & Serafini, Roberta & Ward, Melanie, 2006. "Sectoral explanations of employment in Europe: the role of services," Research Technical Papers 8/RT/06, Central Bank & Financial Services Authority of Ireland (CBFSAI). [Downloadable!]
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