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Efficiency and Equality in the Labour Market

Author

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  • Jonas Agell

Abstract

I review theoretical arguments suggesting that certain labour market institutions can be justified for economic efficiency reasons. In models with intrinsic market failures, "rigidities" like employment protection legislation and institutional wage compression may push the economy closer to the efficient frontier. I discuss recent empirical evidence on income inequality, poverty and income mobility in OECD countries, and I conclude that the welfare states of Northern Europe score relatively well on all counts. Finally, I discuss labour market reforms that may improve efficiency without violating European voters' preference for equality.(JEL H30, J30, J50)

Suggested Citation

  • Jonas Agell, 2004. "Efficiency and Equality in the Labour Market," CESifo Economic Studies, CESifo Group, vol. 50(2), pages 255-278.
    • Handle: RePEc:oup:cesifo:v:50:y:2004:i:2:p:255-278.
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    File URL: http://hdl.handle.net/10.1093/cesifo/50.2.255
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    Cited by:

    1. Juan A. Correa & Francisco Parro & Loreto Reyes, 2014. "The Effects of Vouchers on School Results: Evidence from Chile's Targeted Voucher Program," Journal of Human Capital, University of Chicago Press, vol. 8(4), pages 351-398.
    2. Eric A. Hanushek & Ludger Woessmann, 2011. "How much do educational outcomes matter in OECD countries? [‘Accountability and flexibility in public schools: Evidence from Boston’s charters and pilots’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 26(67), pages 427-491.
    3. John Östh & Eva Andersson & Bo Malmberg, 2013. "School Choice and Increasing Performance Difference: A Counterfactual Approach," Urban Studies, Urban Studies Journal Limited, vol. 50(2), pages 407-425, February.
    4. Anxo, Dominique, 2006. "The Swedish Model and the Patterns of Labour Market Intergration and Income Developments over the Lifecourse," CAFO Working Papers 2006:8, Linnaeus University, Centre for Labour Market Policy Research (CAFO), School of Business and Economics.
    5. Ludger Wößmann, 2008. "Efficiency and equity of European education and training policies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(2), pages 199-230, April.
    6. Woessmann, Ludger, 2004. "How Equal Are Educational Opportunities? Family Background and Student Achievement in Europe and the United States," IZA Discussion Papers 1284, IZA Network @ LISER.
    7. Ludger Wößmann, 2006. "Bildungspolitische Lehren aus den internationalen Schülertests: Wettbewerb, Autonomie und externe Leistungsüberprüfung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(3), pages 417-444, August.
    8. Sangheon Lee & Deirdre McCann & Nina Torm, 2008. "The World Bank's “Employing Workers” index: Findings and critiques – A review of recent evidence," International Labour Review, International Labour Organization, vol. 147(4), pages 416-432, December.
    9. Josep-Oriol Escardíbul & Nehal Helmy, 2015. "Decentralisation and school autonomy impact on the quality of education: the case of two MENA countries," Working Papers 2015/33, Institut d'Economia de Barcelona (IEB).
    10. Kieron J. Barclay & Dalton Conley, 2022. "The influence of cousin order and cousin group size on educational outcomes," MPIDR Working Papers WP-2022-013, Max Planck Institute for Demographic Research, Rostock, Germany.
    11. Friedhelm Pfeiffer & Henrik Winterhager, 2006. "Selektivität und direkte Wirkungen von Vermittlungsgutscheinen: Empirische Befunde aus der Einführungsphase," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(3), pages 395-415, August.
    12. John Bennett, 2008. "Early Childhood Services in the OECD Countries: Review of the literature and current policy in the early childhood field," Papers inwopa08/50, Innocenti Working Papers.
    13. Mörk, Eva & Ahlin, Åsa, 2007. "Effects of decentralization on school resources: Sweden 1989-2002," Working Paper Series 2007:9, Uppsala University, Department of Economics.
    14. Lundin, Martin & Öberg, PerOla, 2012. "Towards reason: political disputes, public attention and the use of expert knowledge in policymaking," Working Paper Series 2012:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    15. Gunther Tichy, 2003. "Die Risikogesellschaft – Ein vernachlässigtes Konzept in der europäischen Stagnationsdiskussion [The Risk Society - An under-researched concept in the European debate on stagnation ]," ITA manu:scripts 03_02, Institute of Technology Assessment (ITA).
    16. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.
    17. Ahlin, Åsa & Mörk, Eva, 2008. "Effects of decentralization on school resources," Economics of Education Review, Elsevier, vol. 27(3), pages 276-284, June.
    18. Gunther Tichy, 2005. "Die ,Neue Unsicherheit‚ als Ursache der europäischen Wachstumsschwäche," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(3), pages 385-407, August.

    More about this item

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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