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Product Market Regulation and Labor Market Outcomes: How can Deregulation Create Jobs?

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Abstract

This paper reports on ongoing research on the interactions between product regulation and labor market outcomes. In particular, I summarize work on the employment effects of shop-closing regulation in the retail and other related sectors. Evidence on employment in the retail sector from Germany, the Netherlands and the United States suggests that the regulatory regime might play an important role; I argue that a nonnegligible comp o nent of the recent Dutch employment miracle could be attributed to product market deregulation, in particular liberalization of shop-closing laws effected in the mid-1990s. I sketch a model, based on Burda and Weil (1999), which can rationalize potential public interest aspects of such regulations as well as identify their employment and output costs.

Suggested Citation

  • Michael Burda, 2000. "Product Market Regulation and Labor Market Outcomes: How can Deregulation Create Jobs?," CESifo Working Paper Series 230, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_230
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    File URL: http://www.cesifo-group.de/DocDL/WP230.PDF
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    References listed on IDEAS

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    1. Morrison, Steven A & Newman, Robert J, 1983. "Hours of Operation Restrictions and Competition among Retail Firms," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 107-114, January.
    2. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    3. Nickell, Stephen, 1999. "Product markets and labour markets1," Labour Economics, Elsevier, vol. 6(1), pages 1-20, March.
    4. Weiss, Yoram, 1996. "Synchronization of Work Schedules," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(1), pages 157-179, February.
    5. Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March.
    6. Hans Gersbach, 1999. "Product market competition, unemployment and income disparities," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(2), pages 221-240, June.
    7. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    8. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, vol. 33(3), pages 516-524, July.
    9. Thum, Marcel & Weichenrieder, Alfons, 1997. "'Dinkies' and Housewives: The Regulation of Shopping Hours," Kyklos, Wiley Blackwell, vol. 50(4), pages 539-559.
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    Cited by:

    1. Smith, Ron & Zoega, Gylfi, 2007. "Global unemployment shocks," Economics Letters, Elsevier, vol. 94(3), pages 433-438, March.
    2. Elbert Dijkgraaf & Raymond Gradus, 2007. "Explaining Sunday Shop Policies," De Economist, Springer, vol. 155(2), pages 207-219, June.
    3. Helge Berger & Stephan Danninger, 2005. "Labor and Product Market Deregulation; Partial, Sequential, or Simultaneous Reform?," IMF Working Papers 05/227, International Monetary Fund.
    4. Michael Groemling, 2002. "Why does redistribution not shrink when equality is high?," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 37(4), pages 204-211, July.
    5. Gersbach, Hans & Schniewind, Achim, 2002. "Uneven Technical Progress and Unemployment," IZA Discussion Papers 478, Institute for the Study of Labor (IZA).
    6. Feldmann, Horst, 2009. "Business regulation, labor force participation and employment in industrial countries," Journal of Economics and Business, Elsevier, vol. 61(3), pages 238-260.
    7. Jo Seldeslachts, 2002. "Interactions Between Product and Labour Market Reforms," UFAE and IAE Working Papers 519.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    8. Ron Smith & Gylfi Zoega, 2004. "Global Shocks and Unemployment Adjustment," Birkbeck Working Papers in Economics and Finance 0401, Birkbeck, Department of Economics, Mathematics & Statistics.
    9. Helge Berger & Stephan Danninger, 2007. "The Employment Effects of Labor and Product Market Deregulation and Their Implications for Structural Reform," IMF Staff Papers, Palgrave Macmillan, vol. 54(3), pages 591-619, July.
    10. Amable, Bruno & Gatti, Donatella, 2001. "The Impact of Product Market Competition on Employment and Wages," IZA Discussion Papers 276, Institute for the Study of Labor (IZA).

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