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Shocks and endogenous institutions: an agent-based model of labor market performance in turbulent times

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  • Martin, Christian W.
  • Neugart, Michael

Abstract

We develop an agent-based model of labor market regulation to study the consequences of employment protection legislations for labor market performance. Unlike most of the existing studies of labor market regulation we endogenize the institutional setting. Workers cast their vote on labor market regulation depending on the past payoffs that they accrued when one of two competing parties with different labor market policy platforms was in power. We identify important interactions with exogenous shocks. In more turbulent economic times, employment protection systems can affect labor market performance for some periods even after the shock has subsided.

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  • Martin, Christian W. & Neugart, Michael, 2009. "Shocks and endogenous institutions: an agent-based model of labor market performance in turbulent times," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57257, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:57257
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/57257/
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    Cited by:

    1. Michael Neugart & Matteo G. Richiardi, 2012. "Agent-based models of the labor market," LABORatorio R. Revelli Working Papers Series 125, LABORatorio R. Revelli, Centre for Employment Studies.
    2. Jung-Seung Yang, 2022. "Dynamics of Firm’s Investment in Education and Training: An Agent-based Approach," Computational Economics, Springer;Society for Computational Economics, vol. 60(4), pages 1317-1351, December.
    3. Simon Gemkow & Michael Neugart, 2011. "Referral hiring, endogenous social networks, and inequality: an agent-based analysis," Journal of Evolutionary Economics, Springer, vol. 21(4), pages 703-719, October.

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