Advanced Search
MyIDEAS: Login to save this paper or follow this series

International Political Spillovers: the case of labor market regulation

Contents:

Author Info

  • Giovanni Pica

Abstract

This paper explores how the political support for Labour Market Regulation (LMR) is affected by economic and political integration in a two country OLG model. We model LMR as wage regulation and analyse three institutional settings: Autarchy, Economic Union and Political Union. In Autarchy capital cannot flow across borders and each country sets its most preferred level of regulation. In the Economic Union capital markets are integrated, while political decisions are not. In the Political Union a common level of LMR is set at a centralized level. In Autarchy, LMR may endogenously arise if the economy is dynamically efficient. In this case, despite the distortions generated in the labour market, LMR increases the welfare of the young, because it raises their permanent income, their savings and the steady state capital stock. In the Economic Union, capital outflows make the implementation of LMR more costly and provide incentives for each country to undercut the rival in order to attract capital.Thus, a race-to-the-bottom takes place and the steady state level of LMR decreases, harming the young individuals. The Political Union restores, under symmetry, the autarchic outcome and welfare levels. The asymmetric case is also analysed.

Download Info

If 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.
File URL: http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/03_12.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/03_12.pdf [301 Moved Permanently]--> http://apps.eui.eu/RSCAS/WP-Texts/03_12.pdf). If this is indeed the case, please notify (Valerio PAPPALARDO)
File Function: Full text
Download Restriction: no

File URL: http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/03_12.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.eui.eu/ERPA/RSCAS/../../RSCAS/WP-Texts/03_12.pdf [301 Moved Permanently]--> http://apps.eui.eu/RSCAS/WP-Texts/03_12.pdf). If this is indeed the case, please notify (Valerio PAPPALARDO)
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS) in its series EUI-RSCAS Working Papers with number 12.

as in new window
Length:
Date of creation: 15 Sep 2003
Date of revision:
Handle: RePEc:erp:euirsc:p0079

Contact details of provider:
Postal: Via dei Roccettini, 9 - I-50016 San Domenico di Fiesole
Web page: http://www.eui.eu/RSCAS/
More information through EDIRC

Related research

Keywords: political economy; economic integration; unemployment;

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Giovanni Pica, 2005. "Capital Markets Integration and Labor Market Institutions," CSEF Working Papers 144, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 01 Nov 2007.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:erp:euirsc:p0079. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valerio PAPPALARDO).

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.