IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Labor market institutions and demographic employment patterns

Listed author(s):
  • Giuseppe Bertola

    ()

  • Francine Blau

    ()

  • Lawrence Kahn

    ()

Using data from 17 OECD countries over the 1960-96 period and a simple theoretical framework, we investigate the impact of institutions on the relative employment of youth, women, and older individuals. Empirically, the employment prospects of these groups are especially affected by poorly performing labour markets. Theoretically, we show that labour market institutions meant to improve workers’ income share imply larger disemployment effects when labour supply is more elastic. Hence, demographic groups other than prime-age males (who have little to do out of employment) should be relatively less employed in more unionized and/or regulated labour markets. We regress relative employment and unemployment outcomes on a standard set of labour market institutions, aggregate unemployment, and period and country effects. This design allows us to control for unmeasured country-specific factors that affect relative employment and unemployment. We find that the effects of wage-setting structures, labour taxes, employment protection, retirement-related institutions and unemployment insurance schemes are broadly consistent with theoretical predictions. In particular, for both men and women, more extensive involvement of unions in wage-setting significantly decreases the employment rate of young and older individuals relative to the prime-aged, with no significant effects on the relative unemployment of these groups. In contrast, a larger role for unions has insignificant effects on male-female employment differentials, but does raise female unemployment relative to male unemployment. This pattern of results suggests that union wage-setting policies price the young and elderly out of employment and drive disemployed individuals in these groups to non-labour-force (education, retirement) states. The situation for women is more complex. A possible scenario is that high union wages encourage female labour force participation, but that women who would otherwise be disemployed by hig

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10.1007/s00148-007-0137-8
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer & European Society for Population Economics in its journal Journal of Population Economics.

Volume (Year): 20 (2007)
Issue (Month): 4 (October)
Pages: 833-867

as
in new window

Handle: RePEc:spr:jopoec:v:20:y:2007:i:4:p:833-867
DOI: 10.1007/s00148-007-0137-8
Contact details of provider: Web page: http://www.springer.com

Phone: +43-70-2468-8236
Fax: +43-70-2468-8238
Web page: http://www.espe.org/
Email:


More information through EDIRC

Order Information: Web: http://www.springer.com/economics/population/journal/148/PS2

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Grant, James H & Hamermesh, Daniel S, 1981. "Labor Market Competition among Youths, White Women and Others," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 354-360, August.
  2. Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October.
  3. Richard Blundell & Howard Reed & Thomas M. Stoker, 2003. "Interpreting Aggregate Wage Growth: The Role of Labor Market Participation," American Economic Review, American Economic Association, vol. 93(4), pages 1114-1131, September.
  4. Bertola, Giuseppe, 1999. "Microeconomic perspectives on aggregate labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 45, pages 2985-3028 Elsevier.
  5. Christina D. Romer & David H. Romer, 1997. "Reducing Inflation: Motivation and Strategy," NBER Books, National Bureau of Economic Research, Inc, number rome97-1, April.
  6. Giuseppe Bertola, 2004. "A Pure Theory of Job Security and Labour Income Risk," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 43-61.
  7. Ruhm, Christopher J., 2000. "Parental leave and child health," Journal of Health Economics, Elsevier, vol. 19(6), pages 931-960, November.
  8. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
  9. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 833-867, October.
  10. Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
  11. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, September.
  12. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
  13. Juan F. Jimeno & Diego Rodríguez-Palenzuela, "undated". "Youth unemployment in the OECD: Demographic shifts, labour market institutions, and macroeconomic shocks," Working Papers 2002-15, FEDEA.
  14. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695 Elsevier.
  15. Lazear, Edward P, 1983. "A Competitive Theory of Monopoly Unionism," American Economic Review, American Economic Association, vol. 73(4), pages 631-643, September.
  16. David Neumark, 2004. "Living Wages: Protection for or Protection from Low-Wage Workers?," ILR Review, Cornell University, ILR School, vol. 58(1), pages 27-51, October.
  17. Francesco Daveri & Guido Tabellini, 2000. "Unemployment, growth and taxation in industrial countries," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 47-104, 04.
  18. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
  19. Alan B. Krueger & Jorn-Steffen Pischke, 1997. "Observations and Conjectures on the U.S. Employment Miracle," NBER Working Papers 6146, National Bureau of Economic Research, Inc.
  20. Edin, Per-Anders & Richardson, Katarina, 2002. " Swimming with the Tide: Solidary Wage Policy and the Gender Earnings Gap," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(1), pages 49-67.
  21. Yann Algan & Pierre Cahuc & André Zylberberg, 2002. "Public employment and labour market performance," Economic Policy, CEPR;CES;MSH, vol. 17(34), pages 7-66, 04.
  22. Blau, Francine D & Kahn, Lawrence M, 1996. "Wage Structure and Gender Earnings Differentials: An International Comparison," Economica, London School of Economics and Political Science, vol. 63(250), pages 29-62, Suppl..
  23. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 87-104, August.
  24. Daniel P. Kessler & Lawrence F. Katz, 2001. "Prevailing Wage Laws and Construction Laborc Markets," ILR Review, Cornell University, ILR School, vol. 54(2), pages 259-274, January.
  25. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  26. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
  27. Anders Bjorklund & Richard B. Freeman, 1997. "Generating Equality and Eliminating Poverty, the Swedish Way," NBER Chapters, in: The Welfare State in Transition: Reforming the Swedish Model, pages 33-78 National Bureau of Economic Research, Inc.
  28. Davis, Steven J. & Henrekson, Magnus, 2005. "Wage-setting institutions as industrial policy," Labour Economics, Elsevier, vol. 12(3), pages 345-377, June.
  29. Acemoglu, Daron & Aghion, Philippe & Violante, Giovanni L., 2001. "Deunionization, technical change and inequality," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 229-264, December.
  30. Laurence Ball, 1999. "Aggregate demand and Long-Run Unemployment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(2), pages 189-252.
  31. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461 Elsevier.
  32. Harry C. Katz, 1993. "The Decentralization of Collective Bargaining: A Literature Review and Comparative Analysis," ILR Review, Cornell University, ILR School, vol. 47(1), pages 3-22, October.
  33. Richard Disney, 1996. "Can We Afford to Grow Older?," MIT Press Books, The MIT Press, edition 1, volume 1, number 026204157x, September.
  34. David Card & Francis Kramarz & Thomas Lemieux, 1999. "Changes in the Relative Structure of Wages and Employment: A Comparison of the United States, Canada, and France," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 843-877, August.
  35. David G. Blanchflower & Richard B. Freeman, 2000. "The Declining Economic Status of Young Workers in OECD Countries," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 19-56 National Bureau of Economic Research, Inc.
  36. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
  37. Blau, Francine D & Kahn, Lawrence M, 1981. "Causes and Consequences of Layoffs," Economic Inquiry, Western Economic Association International, vol. 19(2), pages 270-296, April.
  38. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
  39. David H. Autor & John J. Donohue & Stewart J. Schwab, 2006. "The Costs of Wrongful-Discharge Laws," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 211-231, May.
  40. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 285-317.
  41. Davis, Steven J & Henrekson, Magnus, 1999. "Explaining National Differences in the Size and Industry Distribution of Employment," Small Business Economics, Springer, vol. 12(1), pages 59-83, February.
  42. Siebert, Horst, 1997. "Labor market rigidities and unemployment in Europe," Kiel Working Papers 787, Kiel Institute for the World Economy (IfW).
  43. Laurence M. Ball, 1997. "Disinflation and the NAIRU," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 167-194 National Bureau of Economic Research, Inc.
  44. Hilary Steedman, 2001. "Benchmarking Apprenticeship: UK and Continental Europe Compared," CEP Discussion Papers dp0513, Centre for Economic Performance, LSE.
  45. Agell, Jonas & Lommerud, Kjell Erik, 1992. "Union Egalitarianism as Income Insurance," Economica, London School of Economics and Political Science, vol. 59(235), pages 295-310, August.
  46. Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-183, May.
  47. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
  48. Richard B. Freeman & Ronald Schettkat, 2000. "The Role of Wage and Skill Differences in US-German Employment Differences," NBER Working Papers 7474, National Bureau of Economic Research, Inc.
  49. Rosen, Sherwin, 1970. "Unionism and the Occupational Wage Structure in the United States," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(2), pages 269-286, June.
  50. Spilimbergo, Antonio, 1999. "Labor Market Integration, Unemployment, and Transfers," Review of International Economics, Wiley Blackwell, vol. 7(4), pages 641-650, November.
  51. David G. Blanchflower & Richard B. Freeman, 2000. "Youth Employment and Joblessness in Advanced Countries," NBER Books, National Bureau of Economic Research, Inc, number blan00-1, April.
  52. Kahn, Lawrence M, 1993. "Unions and Cooperative Behavior: The Effect of Discounting," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 680-703, October.
  53. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
  54. Sanders Korenman & David Neumark, 2000. "Cohort Crowding and Youth Labor Markets (A Cross-National Analysis)," NBER Chapters, in: Youth Employment and Joblessness in Advanced Countries, pages 57-106 National Bureau of Economic Research, Inc.
  55. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  56. MacKinnon, James G, 1994. "Approximate Asymptotic Distribution Functions for Unit-Root and Cointegration Tests," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(2), pages 167-176, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:spr:jopoec:v:20:y:2007:i:4:p:833-867. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.