This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Labor Market Structures, Trade and their Effect on Unemployment: A Theoretical Analysis and Empirical Investigation

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Sebastian Weber () (IUHEI, The Graduate Institute of International Studies, Geneva)

Additional information is available for the following registered author(s):

Abstract

This paper investigates the effects of different labor market structures on the level of unemployment. A theoretical interpretation of an open economy version of the Calmfors and Driffill framework with traded good sector and sheltered non traded good sector is presented, in which different wage-employment trade-offs faced by unions in traded and non traded goods sector as well as the degree of openness is taken into account. From a theoretical point of view the framework supports the idea of the hump-shaped relationship between the degree of centralization of the bargaining process and the level of unemployment, which is sustained even with increased openness. Countries with an intermediate level of bargaining are expected to benefit most in terms of lower unemployment from an increase in openness. In an empirical part, the model is applied to a panel of 20 OECD countries over the period 1970-2000 and the predictions of the model are tested. I find empirical support for both of the main hypothesis, particularly if the strength of the employment protection is additionally taken into account. The results render also support to the literature on the interaction of product market regulations and labor market institutions, as countries which face stronger competition in the product market from foreign producers stand to benefit more from a deregulation in the labor market via a weakening of the employment protection legislation.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hei.unige.ch/sections/ec/pdfs/Working_papers/HEIWP22-2006.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number 22-2006.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length: 67
Date of creation: 01 Oct 2006
Date of revision:
Handle: RePEc:gii:giihei:heiwp22-2006

Contact details of provider:
Postal: P.O. Box 36, 1211 Geneva 21
Phone: ++41 22 731 17 30
Fax: ++41 22 738 43 06
Email:
Web page: http://hei.unige.ch/sections/ec/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Kornel Mahlstein).

Related research
Keywords: Labor Market Institutions Unemployment Openness to Trade Product Market Competition

Other versions of this item:

Find related papers by JEL classification:
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

This paper has been announced in the following NEP Reports:

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. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social Employment and Migration Working Papers 35, OECD Directorate for Employment, Labour and Social Affairs. [Downloadable!]
    Other versions:
  2. Beissinger, Thomas & Büsse, Oliver, 2002. "The Impact of the Unemployment Benefit System on International Spillover Effects," Regensburger Diskussionsbeiträge zur Wirtschaftswissenschaft 376, University of Regensburg, Department of Economics. [Downloadable!]
    Other versions:
  3. Belot, M.V.K. & Ours, J.C. van, 2001. "Unemployment and labor market institutions : an empirical analysis," Discussion Paper 50, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  4. Danthine, Jean-Pierre & Hunt, Jennifer, 1994. "Wage Bargaining Structure, Employment and Economic Integration," Economic Journal, Royal Economic Society, vol. 104(424), pages 528-41, May. [Downloadable!] (restricted)
    Other versions:
  5. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Economics Department. [Downloadable!]
  6. Newey, Whitney K & West, Kenneth D, 1987. "A Simple, Positive Semi-definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix," Econometrica, Econometric Society, vol. 55(3), pages 703-08, May. [Downloadable!] (restricted)
    Other versions:
  7. Huw. D. Dixon & Claus T. Hansen & Henrik J. Kleven, . "Dual Labour Markets and Menu Costs: Explaining the Cyclicality of Productivity and Wage Differentials," Discussion Papers 99/1, Department of Economics, University of York. [Downloadable!]
    Other versions:
  8. John Driffill, 2006. "The Centralization of Wage Bargaining Revisited: What Have we Learnt?," Journal of Common Market Studies, Blackwell Publishing, vol. 44, pages 731-756, November. [Downloadable!] (restricted)
  9. Lalive, Rafael & Zweimüller, Josef, 2002. "Benefit Entitlement and Unemployment Duration: The Role of Policy Endogeneity," IZA Discussion Papers 492, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. 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. [Downloadable!] (restricted)
    Other versions:
  11. Dean Baker & Andrew Glyn & David Howell & John Schmitt, 2002. "Labor Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence," SCEPA Working Papers 2002-17, Schwartz Center for Economic Policy Analysis (SCEPA), New School University. [Downloadable!]
    Other versions:
  12. Charles Wyplosz, 2000. "Economic growth and the labor markets: Europe's challenge," Research series 200005-4, National Bank of Belgium. [Downloadable!]
  13. Hall, Peter A & Franzese, Robert J, Jr, 1998. "Mixed Signals: Central Bank Independence, Coordinated Wage Bargaining, and European Monetary Union," International Organization, MIT Press, vol. 52(3), pages 505-35, Summer.
  14. Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics 0508018, EconWPA. [Downloadable!]
  15. Adriana Kugler & Giovanni Pica, 2003. "Effects of Employment Protection and Product Market Regulations on the Italian Labor Market," Economics Working Papers 722, Department of Economics and Business, Universitat Pompeu Fabra. [Downloadable!]
    Other versions:
  16. 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)
  17. Calmfore, L., 1993. "Centralization of Wage Bargaining and Macroeconomic Performance - A Survey," Papers 536, Stockholm - International Economic Studies.
  18. 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!]
  19. David R. Howell & Dean Baker & Andrew Glyn & John Schmitt, 2006. "Are Protective Labor Market Institutions Really at the Root of Unemployment? A Critical Perspective on the Statistical Evidence," CEPR Reports and Issue Briefs 2006-14, Center for Economic and Policy Research (CEPR). [Downloadable!]
  20. Bhargava, A & Franzini, L & Narendranathan, W, 1982. "Serial Correlation and the Fixed Effects Model," Review of Economic Studies, Blackwell Publishing, vol. 49(4), pages 533-49, October. [Downloadable!] (restricted)
  21. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR, CES, MSH, vol. 21(45), pages 5-59, 01. [Downloadable!] (restricted)
    Other versions:
  22. Giuseppe Bertola & Francine D. Blau & Lawrence M. Kahn, 2001. "Comparative Analysis of Labor Market Outcomes: Lessons for the US from International Long-Run Evidence," NBER Working Papers 8526, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  23. Driffill, John & van der Ploeg, Frederick, 1993. "Monopoly Unions and the Liberalisation of International Trade," Economic Journal, Royal Economic Society, vol. 103(417), pages 379-85, March. [Downloadable!] (restricted)
  24. Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 6(4), pages 36-61, Winter.
  25. Daveri, Francesco & Tabellini, Guido, 1997. "Unemployment, Growth and Taxation in Industrial Countries," CEPR Discussion Papers 1681, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  26. Marcello M. Estevão, 2005. "Product Market Regulation and the Benefits of Wage Moderation," IMF Working Papers 05/191, International Monetary Fund. [Downloadable!]
  27. Helge Berger & Stephan Danninger, 2005. "Labor and Product Market Deregulation: Partial, Sequential, or Simultaneous Reform?," IMF Working Papers 05/227, International Monetary Fund. [Downloadable!]
  28. Giuseppe Nicoletti & Stefano Scarpetta, 2005. "Product Market Reforms and Employment in OECD Countries," OECD Economics Department Working Papers 472, OECD Economics Department. [Downloadable!]
  29. Rasmussen, Bo Sandemann, 1992. " Union Cooperation and Nontraded Goods in General Equilibrium," Scandinavian Journal of Economics, Blackwell Publishing, vol. 94(4), pages 561-79.
  30. Luca Nunziata, 2005. "Institutions and Wage Determination: a Multi-country Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(4), pages 435-466, 08. [Downloadable!] (restricted)
    Other versions:
  31. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September. [Downloadable!] (restricted)
Full references

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. Mirko Abbritti, 2007. "A "Simple" Currency Union Model with Labor Market Frictions, Real Wage Rigidities and Equilibrium Unemployment," HEI Working Papers 09-2007, Economics Section, The Graduate Institute of International Studies. [Downloadable!]
Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by encouraging others to use our services.

This page was last updated on 2008-9-18.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.