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Understanding Labour Market Institutions: A Political Economy Perspective

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  • Saint-Paul, Gilles

Abstract

In this paper we argue that many of the rigidities that characterize European labour markets can be understood as the outcome of political influence by incumbent employees. We then empirically investigate the determinants of labour market institutions and show that the results are consistent with this view. Among other things, we find: that higher exposure of the employed to unemployment facilitates a reduction in the level of employment protection; that unemployment benefits are lower, the more employment reacts to wages; and that a higher level of unemployment and a right-wing government slow down the growth rate of the minimum wage.

Suggested Citation

  • Saint-Paul, Gilles, 1996. "Understanding Labour Market Institutions: A Political Economy Perspective," CEPR Discussion Papers 1438, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1438
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    References listed on IDEAS

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    Cited by:

    1. Kamila Fialová & OndÅej Schneider, 2009. "Labor Market Institutions and Their Effect on Labor Market Performance in the New EU Member Countries," Eastern European Economics, Taylor & Francis Journals, pages 57-83.
    2. Kaji, Sahoko, 1998. "Successful Structural Reforms after EMU," Journal of the Japanese and International Economies, Elsevier, vol. 12(4), pages 507-534, December.

    More about this item

    Keywords

    Employment Protection; Labour Market Institutions; Minimum Wages; Political Economy; Unemployment; Unemployment Benefits;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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