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The Impact of Labour Market Deregulation: Lessons from the "Kiwi"and "Polder" Models

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Author Info
Cees Gorter () (Vrije Universiteit Amsterdam)
Jacques Poot (Victoria University of Wellington)

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Abstract

Unemployment remains a major economic and social problem in many developed economies. This paper provides theoretical and empirical perspectives on the impact of labour market deregulation as a means of combatting unemployment and of enhancing competitive wage determination. The paper focusses specifically on The Netherlands and New Zealand, two small open economies in which unemployment rates reduced to close to half of their respective post-1980 peaks. The labour market policies that contributed to these outcomes are referred to as the "Polder" model and the "Kiwi" model respectively. Despite some similarities, there are significant differences between these models. These are highlighted in the paper. It is found that the effects of deregulation are hard to separate out from other influences on the labour market. The success of the deregulation policies is easily overstated by a selective use of labour market indicators, or by making trough to peak comparisons along the business cycle.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-001/3.

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Date of creation: 21 Jan 1999
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Handle: RePEc:dgr:uvatin:19990001

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Web page: http://www.tinbergen.nl/

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Related research
Keywords: labour markets flexibility deregulation international comparisons

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Find related papers by JEL classification:
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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  1. Arulampalam, Wiji & Hartog, Joop & MaCurdy, Tom & Theeuwes, Jules, 1997. "Replication and re-analysis," Labour Economics, Elsevier, vol. 4(2), pages 99-105, June. [Downloadable!] (restricted)
  2. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June. [Downloadable!] (restricted)
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  3. Saint-Paul, Gilles, 1997. "The Rise and Persistence of Rigidities," CEPR Discussion Papers 1571, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  4. Card, David & Krueger, Alan B, 1995. "Time-Series Minimum-Wage Studies: A Meta-analysis," American Economic Review, American Economic Association, vol. 85(2), pages 238-43, May. [Downloadable!] (restricted)
  5. Brosnan, Peter & Rea, David & Wilson, Moira, 1995. "Labour Market Segmentation and the State: The New Zealand Experience," Cambridge Journal of Economics, Oxford University Press, vol. 19(5), pages 667-96, October.
  6. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June. [Downloadable!] (restricted)
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