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Institutions and performance in European labour markets: taking a fresh look at evidence

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  • Alfonso Arpaia
  • Gilles Mourre

Abstract

This paper presents a selective survey of the recent literature on labour market institutions and performance and offers new empirical EU-based evidence on the impact of labour market reforms on employment and labour market adjustment. While the literature traditionally treats labour market institutions as exogenous, attention shifted recently towards understanding the underlying causes of specific institutional arrangements. As a consequence, the literature highlights the great importance of an efficient policy design exploiting these interactions wisely and identifies general principles for achieving an efficient policy design at both macro and micro levels. While empirical evidence does no show a major change in terms of intensity of labour market reform after the setting of the Economic and Monetary Union and the creation of the euro, the reforms aiming at strengthening the labour market attachment of vulnerable groups tend to have been successful both in raising their employment and increasing labour market adjustment.

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Bibliographic Info

Paper provided by Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission in its series European Economy - Economic Papers with number 391.

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Length: 51 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:euf:ecopap:0391

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Keywords: 'Institutions and Performance in European Labour Markets'; 'labour market functioning; political economy; endogeneity; institutions; policy design'; Arpaïa; Mourre;

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Citations

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Cited by:
  1. Tatsiramos, K. & Ours, J.C. van, 2012. "Labor Market Effects of Unemployment Insurance Design," Discussion Paper 2012-082, Tilburg University, Center for Economic Research.
  2. Jean-Claude Trichet, 2011. "Achieving maximum long-term growth," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 427-449.
  3. European Commission, 2011. "Tax Reforms in EU Member States 2011: tax policy challenges for economic growth and fiscal sustainability," Taxation Papers 28, Directorate General Taxation and Customs Union, European Commission.
  4. Etienne LEHMANN & Claudio LUCIFORA & Simone MORICONI & Bruno VAN DER LINDEN, 2013. "Beyond the Labour Income Tax Wedge: The Unemployment-Reducing Effect of Tax Progressivity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  5. Lucifora, Claudio & Moriconi, Simone, 2012. "Political Instability and Labor Market Institutions," IZA Discussion Papers 6457, Institute for the Study of Labor (IZA).
  6. Andreas Sachs & Frauke Schleer, 2013. "Labour market performance in OECD countries: A comprehensive empirical modelling approach of institutional interdependencies," WWWforEurope Working Papers series 7, WWWforEurope.
  7. Alfonso ARPAIA & Nicola CURCI, . "EU labour market behaviour during the Great Recession," Working Papers wp2010-6, Department of the Treasury, Ministry of the Economy and of Finance.
  8. Dario JUDZIK & Hector SALA, 2013. "Productivity, deunionization and trade: Wage effects and labour share implications," International Labour Review, International Labour Organization, vol. 152(2), pages 205-236, 06.
  9. 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).

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