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Institutions and performance in European labour markets: taking a fresh look at evidence

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  • Alfonso Arpaia
  • Gilles Mourre

Abstract

This paper presents a selective survey of the recent literature on labour market institutions and performance and offers new empirical EU-based evidence on the impact of labour market reforms on employment and labour market adjustment. While the literature traditionally treats labour market institutions as exogenous, attention shifted recently towards understanding the underlying causes of specific institutional arrangements. As a consequence, the literature highlights the great importance of an efficient policy design exploiting these interactions wisely and identifies general principles for achieving an efficient policy design at both macro and micro levels. While empirical evidence does no show a major change in terms of intensity of labour market reform after the setting of the Economic and Monetary Union and the creation of the euro, the reforms aiming at strengthening the labour market attachment of vulnerable groups tend to have been successful both in raising their employment and increasing labour market adjustment.

Suggested Citation

  • Alfonso Arpaia & Gilles Mourre, 2009. "Institutions and performance in European labour markets: taking a fresh look at evidence," European Economy - Economic Papers 2008 - 2015 391, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:ecopap:0391
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    More about this item

    Keywords

    'Institutions and Performance in European Labour Markets'; 'labour market functioning; political economy; endogeneity; institutions; policy design'; Arpaïa; Mourre;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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