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Labour market institutions and unemployment: An international comparison

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  • Rottmann, Horst
  • Flaig, Gebhard

Abstract

This paper deals with the effects of labour market institutions on unemployment in a panel of 19 OECD countries for the period 1960 to 2000. In contrast to many other studies, we use long time series and analyze cyclically adjusted trend values of the unemployment rate. Our novel contribution is the estimation of panel models where we allow for heterogeneous effects of institutions on unemployment. Our main results are that on the average a tighter employment protection, a higher tax burden on labour income and a more generous unemployment insurance system increase, whereas a higher centralization of wage negotiations decreases unemployment. The strength of the effects differs considerably between countries. --

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Bibliographic Info

Paper provided by University of Applied Sciences Amberg-Weiden (OTH) in its series OTH im Dialog: Weidener Diskussionspapiere with number 31.

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Date of creation: 2011
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Handle: RePEc:zbw:hawdps:31

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Web page: http://www.oth-aw.de/

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Keywords: Employment protection; labour market institutions; unemployment; international comparison;

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  1. Gordon, Robert J, 1996. "The Time-varying NAIRU and its Implications for Economic Policy," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1492, C.E.P.R. Discussion Papers.
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  4. Caballero, Ricardo J. & Cowan, Kevin N. & Engel, Eduardo M.R.A. & Micco, Alejandro, 2013. "Effective labor regulation and microeconomic flexibility," Journal of Development Economics, Elsevier, Elsevier, vol. 101(C), pages 92-104.
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  7. Koeniger, Winfried & Prat, Julien, 2006. "Employment Protection, Product Market Regulation and Firm Selection," IZA Discussion Papers 1960, Institute for the Study of Labor (IZA).
  8. Pierre Cahuc & Winfried Koeniger, 2007. "Feature: Employment Protection Legislation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(521), pages 185-188, 06.
  9. Eichhorst, Werner & Feil, Michael & Braun, Christoph, 2008. "What Have We Learned? Assessing Labor Market Institutions and Indicators," IZA Discussion Papers 3470, Institute for the Study of Labor (IZA).
  10. Flaig, Gebhard & Rottmann, Horst, 2009. "Labour Market Institutions and the Employment Intensity of Output Growth," Munich Reprints in Economics, University of Munich, Department of Economics 20370, University of Munich, Department of Economics.
  11. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, American Economic Association, vol. 79(2), pages 177-83, May.
  12. Gayle Allard, 2005. "Measuring job security over time: in search of a historical indicator for EPL," Working Papers Economia, Instituto de Empresa, Area of Economic Environment wp05-17, Instituto de Empresa, Area of Economic Environment.
  13. Stephen Nickell, 2003. "Labour Market Institutions and Unemployment in OECD Countries," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 1(2), pages 13-26, October.
  14. 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.
  15. Lawrence Kahn, 2003. "Labour Market Institutions and Unemployment in OECD Countries," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 1(4), pages 25-32, October.
  16. Gayle Allard, 2005. "Measuring The Changing Generosity Of Unemployment Benefits: Beyond Existing Indicators," Working Papers Economia, Instituto de Empresa, Area of Economic Environment wp05-18, Instituto de Empresa, Area of Economic Environment.
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Cited by:
  1. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).

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