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How do labour laws affect unemployment and the labour share of national income? The experience of six OECD countries, 1970–2010

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  • Simon DEAKIN
  • Jonas MALMBERG
  • Prabirjit SARKAR

Abstract

Using longitudinal data on labour law in France, Germany, Japan, Sweden, the United Kingdom and the United States over the period 1970–2010, the authors estimate the impact of labour regulation on unemployment and the labour share of national income. Their dynamic panel data analysis distinguishes between the short-run and long-run effects of regulatory change. They find that worker-protective labour laws in general have no consistent relationship to unemployment but are positively correlated with labour's share of national income. Laws specifically relating to working time and employee representation are found to have beneficial effects on both efficiency and distribution thus proxied.

Suggested Citation

  • Simon DEAKIN & Jonas MALMBERG & Prabirjit SARKAR, 2014. "How do labour laws affect unemployment and the labour share of national income? The experience of six OECD countries, 1970–2010," International Labour Review, International Labour Organization, vol. 153(1), pages 1-27, March.
  • Handle: RePEc:bla:intlab:v:153:y:2014:i:1:p:1-27
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    Cited by:

    1. Simon Deakin, 2016. "The Contribution of Labour Law to Economic Development & Growth," Working Papers wp478, Centre for Business Research, University of Cambridge.
    2. Zoe Adams & Louise Bishop & Simon Deakin & Colin Fenwick & Sara Martinsson Garzelli & Giudy Rusconi & Centre for Business Research, 2018. "The Economic Significance of Laws Relating to Employment Protection & Different Forms of Employment: Analysis of a Panel of 117 Countries, 1990-2013," Working Papers wp500, Centre for Business Research, University of Cambridge.
    3. Ramskogler, Paul, 2021. "Labour market hierarchies and the macro-economy – Do labour market dualities affect wage growth in Europe?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 154-165.
    4. Filippo Belloc, 2019. "Labor Conflict at the Workplace: Do Dismissal Regulations Matter?," Department of Economics University of Siena 806, Department of Economics, University of Siena.
    5. Emiliano Brancaccio & Fabiana De Cristofaro & Raffaele Giammetti, 2020. "No Consensus In The Imf-Oecd 'Consensus': A Meta-Analysis On The Employment Impact Of Labour Deregulations," Working Papers 445, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Zoe Adams & Simon Deakin, 2014. "Institutional Solutions to Precariousness & Inequality in Labour Markets," Working Papers wp463, Centre for Business Research, University of Cambridge.
    7. Damiani, Mirella & Pompei, Fabrizio & Andrea, Ricci, 2018. "Labour shares, employment protection and unions in European economies," MPRA Paper 91300, University Library of Munich, Germany.
    8. Anamitra Roychowdhury, 2019. "Application of job security laws, workers’ bargaining power and employment outcomes in India," The Economic and Labour Relations Review, , vol. 30(1), pages 120-141, March.
    9. Batóg Jacek, 2017. "Labour Contribution and Productivity in the European Union: A Cluster Analysis," Folia Oeconomica Stetinensia, Sciendo, vol. 17(2), pages 7-18, December.
    10. Sarkar, Prabirjit, 2020. "Does labor regulation reduce total and youth employment?," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 374-381.
    11. Simon Deakin & Shelley Marshall & Sanjay Pinto, 2020. "Labour Laws, Informality, and Development: Comparing India and China," Working Papers wp518, Centre for Business Research, University of Cambridge.
    12. Walter Paternesi Meloni & Antonella Stirati, 2021. "What has driven the delinking of wages from productivity? A political economy-based investigation for high-income economies," Working Papers PKWP2104, Post Keynesian Economics Society (PKES).
    13. Stirati, Antonella & Paternesi Meloni, Walter, 2021. "Unemployment and the wage share: a long-run exploration for major mature economies," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 330-352.
    14. Zoe Adams & Simon Deakin, 2014. "Institutional Solutions to Precariousness and Inequality in Labour Markets," British Journal of Industrial Relations, London School of Economics, vol. 52(4), pages 779-809, December.
    15. Simon Deakin, 2018. "The Use of Quantitative Methods in Labour Law Research: An Assessment and Reformulation," Working Papers wp495, Centre for Business Research, University of Cambridge.

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