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Labour Market Regulation in the EU-15: Causes and Consequences - A Survey

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Author Info
W. Stanley Siebert () (University of Birmingham and IZA Bonn)

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Abstract

Why should floors be set under wages and working conditions by labour market regulations? This paper finds that efficiency arguments are questionable, because of the disemployment effects of strict regulation. Regulation is better explained in terms of the choices of the employed semi- and unskilled worker group. This group contains the median voter, who rationally desires strict regulation to divert rent from other groups such as the skilled workers and the unemployed. Legal origin may also be important: some countries have fallen under the influence of the interventionist French (or German) legal tradition. Given a predisposition to intervene, these countries begin with some degree of labour regulation, which then creates its own constituency of rent protectors and rent growers.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2430.

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Length: 26 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2430

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Related research
Keywords: labour market regulation; European Union; median voter; legal origin; minimum wages; working conditions floors; wage inequality; job opportunity inequality; long-term unemployment;

Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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References listed on IDEAS
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