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Market Rigidities and Labour Market Flexibility: An International Comparison

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  • Salvanes, Kjell G

Abstract

The effects of product and labor market rigidities on labor market dynamics are analyzed using a panel of two-digit ISIC level data for seven OECD countries. As expected, employment protection was found to slacken labor market flows. Centralized wage bargaining also reduced the degree of job turnover, although a priori the effect of centralized wage bargaining on labor market flexibility is not clear. Industry subsidies have a positive impact on job reallocation by increasing job creation. The labor market dynamics are also compared in detail for two economies regarded as extremes in terms of regulations, the United States and Norway. Copyright 1997 by The editors of the Scandinavian Journal of Economics.

Suggested Citation

  • Salvanes, Kjell G, 1997. " Market Rigidities and Labour Market Flexibility: An International Comparison," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 315-333, June.
  • Handle: RePEc:bla:scandj:v:99:y:1997:i:2:p:315-33
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    Cited by:

    1. Lundberg, Lars & Andersson, Linda & Gustafsson, Ola, 1998. "Structural Change, Competition and Job Turnover in the Swedish Manufacturing Industry 1964-96," Working Paper Series 148, Trade Union Institute for Economic Research.
    2. Heshmati Almas & Karlson Nils & Box Marcus, 2013. "Generality, State Neutrality and Unemployment in the OECD," Global Economy Journal, De Gruyter, vol. 13(3-4), pages 333-358, December.
    3. Nilsen, Oivind A. & Salvanes, Kjell G. & Schiantarelli, Fabio, 2007. "Employment changes, the structure of adjustment costs, and plant size," European Economic Review, Elsevier, vol. 51(3), pages 577-598, April.
    4. Guertzgen, Nicole, 2007. "Job and Worker Reallocation in German Establishments: The Role of Employers? Wage Policies and Labour Market Institutions," ZEW Discussion Papers 07-084, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Petri Böckerman, 2004. "Perception of Job Instability in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 67(3), pages 283-314, July.
    6. Erol Taymaz & Sule Ozler, 2004. "Labor Market Policies and EU Accession: Problems and Prospects for Turkey," ERC Working Papers 0405, ERC - Economic Research Center, Middle East Technical University, revised Mar 2004.
    7. Camacho-Cabiscol, Josep-Maria & Baró Llinàs, Joan & Alemany Leira, Ramon, 2000. "Job Flows In Catalonia," ERSA conference papers ersa00p456, European Regional Science Association.
    8. Andersson, Linda & Gustafsson, Ola & Lundberg, Lars, 1999. "Structural Change, Competition And Job Turnover In The Swedish Manufacturing Industry 1964-96," Umeå Economic Studies 486, Umeå University, Department of Economics.
    9. Giuseppina Gianfreda & Giovanna Vallanti, 2013. "Courts' ineffciency and irregular workers:identifying the impact of real EPL," Working Papers LuissLab 13104, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    10. Nilsen, Øivind & Salvanes, Kjell G. & Schiantarelli, Fabio, 2000. "Employment Changes, the Structure of Adjustment Costs, and Firms' Size," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A1-4, International Conferences on Panel Data.
    11. repec:aia:aiaswp:wp115 is not listed on IDEAS
    12. Wachsen, Eva & Blind, Knut, 2016. "More labour market flexibility for more innovation? Evidence from employer–employee linked micro data," Research Policy, Elsevier, vol. 45(5), pages 941-950.
    13. Gomez-Salvador, Ramon & Messina, Julian & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Labour Economics, Elsevier, vol. 11(4), pages 469-485, August.
    14. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2010. "Disability in the Welfare State: An Unemployment Problem in Disguise?," IZA Discussion Papers 4897, Institute for the Study of Labor (IZA).
    15. Bratsberg, Bernt & Fevang, Elisabeth & Røed, Knut, 2013. "Job loss and disability insurance," Labour Economics, Elsevier, vol. 24(C), pages 137-150.
    16. Lesley O'Connell, 1999. "Sistemas de negociación colectiva en seis países latinoamericanos: grados de autonomía y descentralización (Argentina, Brasil, Chile, México, Perú y Venezuela)," Research Department Publications 4169, Inter-American Development Bank, Research Department.
    17. Dimitri Paolini & Juan de Tena, 2012. "Short or long-term contract? Firm’s optimal choice," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(1), pages 1-18, February.
    18. Chung, Heejung, 2006. "Flexibility, but for whom? : A new approach to examining labour market flexibility across Europe using company level data," MPRA Paper 2397, University Library of Munich, Germany, revised Mar 2007.
    19. Jesper Bagger & Morten Henningsen, 2008. "Job Durations and the Job Search Model: A Two-Country, Multi-Sample Analysis," Discussion Papers 553, Statistics Norway, Research Department.
    20. Harald Dale-Olsen & Dag Rønningen, 2000. "The Importance of Definitions of Data and Observation Frequen-cies for Job and Worker Flows - Norwegian Experiences 1996-1997," Discussion Papers 278, Statistics Norway, Research Department.
    21. Richard Fabling & David C. Maré, 2012. "Cyclical Labour Market Adjustment in New Zealand: The Response of Firms to the Global Financial Crisis and its Implications for Workers," Working Papers 12_04, Motu Economic and Public Policy Research.
    22. Lesley O'Connell, 1999. "Collective Bargaining Systems in Six Latin American Countries: Degrees of Autonomy and Decentralization (Argentina, Brazil, Chile, Mexico, Peru, and Uruguay)," Research Department Publications 4168, Inter-American Development Bank, Research Department.
    23. Stuart Glosser & Lonnie Golden, 2005. "Is labour becoming more or less flexible? Changing dynamic behaviour and asymmetries of labour input in US manufacturing," Cambridge Journal of Economics, Oxford University Press, vol. 29(4), pages 535-557, July.

    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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