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Product and Labour Market Regulations, Production Prices, Wages and Productivity

Author

Listed:
  • Gilbert Cette

    (Centre de recherche de la Banque de France - Banque de France, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Jimmy Lopez

    () (LEDi - Laboratoire d'Economie de Dijon - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France)

  • Jacques Mairesse

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract

This study is an attempt to evaluate the effects of product and labour market regulations on industry productivity through their various impacts on changes in production prices and wages. In a first stage, the estimation of a regression equation on an industry*country panel, with controls for country*industry and country*year fixed effects, show that multi-factor productivity is negatively and significantly influenced by both indicators of industrial prices from same industry and weighted average of industrial prices from other industries, and by indicators of country wages weighted by industry labour shares for low and high skilled workers. In a second stage, an economic policy simulation of the implications these results on the basis of their calibration by the OECD product and labour market anti-competitive regulation indicators suggests that nearly all countries could expect sizeable gains in multifactor productivity from deregulation reforms.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Product and Labour Market Regulations, Production Prices, Wages and Productivity," Post-Print hal-01505783, HAL.
  • Handle: RePEc:hal:journl:hal-01505783
    DOI: 10.5202/rei.v7i2.220
    Note: View the original document on HAL open archive server: https://hal-amu.archives-ouvertes.fr/hal-01505783
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    References listed on IDEAS

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    2. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2017. "Upstream Product Market Regulations, ICT, R&D and Productivity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 68-89, February.
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    4. Renaud Bourlès & Gilbert Cette & Jimmy Lopez & Jacques Mairesse & Giuseppe Nicoletti, 2013. "Do Product Market Regulations In Upstream Sectors Curb Productivity Growth? Panel Data Evidence For OECD Countries," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1750-1768, December.
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    Cited by:

    1. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2019. "Rent Creation And Rent Sharing: New Measures And Impacts On Total Factor Productivity," Economic Inquiry, Western Economic Association International, vol. 57(4), pages 1915-1938, October.
    2. Ciriaci, Daria & Grassano, Nicola & Vezzani, Antonio, 2019. "Regulations and location choices of top R&D investors worldwide," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 29-42.
    3. Balázs Égert & Peter Gal, 2017. "The quantification of structural reforms in OECD countries: A new framework," OECD Journal: Economic Studies, OECD Publishing, vol. 2016(1), pages 91-108.
    4. Balázs Égert, 2016. "Regulation, Institutions, and Productivity: New Macroeconomic Evidence from OECD Countries," American Economic Review, American Economic Association, vol. 106(5), pages 109-113, May.
    5. Ana Cristina Soares, 0. "Price-cost margin and bargaining power in the European Union," Empirical Economics, Springer, vol. 0, pages 1-31.
    6. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2018. "Employment Protection Legislation Impacts on Capital and Skills Composition," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Études Économiques (INSEE), issue 503-504, pages 109-122.
    7. Rivaud, S., 2015. "Impacts macroéconomiques internationaux des réformes structurelles," Bulletin de la Banque de France, Banque de France, issue 200, pages 91-105.
    8. Elstner, Steffen & Rujin, Svetlana, 2019. "The consequences of U.S. technology changes for productivity in advanced economies," Ruhr Economic Papers 796, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    9. Chantal Kegels & Dirk Verwerft, 2018. "Working Paper 09-18 - Economic impact of professional services reform in Belgium - A DSGE simulation," Working Papers 1809, Federal Planning Bureau, Belgium.
    10. Cette, Gilbert & Fernald, John & Mojon, Benoît, 2016. "The pre-Great Recession slowdown in productivity," European Economic Review, Elsevier, vol. 88(C), pages 3-20.
    11. Jakob de Haan & Rasmus Wiese, 2020. "The Impact of Product and Labour Market Reform on Growth: Evidence for OECD Countries Based on Local Projections," CESifo Working Paper Series 8393, CESifo.
    12. Steffen Elstner & Christian Grimme & Valentin Kecht & Robert Lehmann, 2020. "The Diffusion of Technological Progress in ICT," CESifo Working Paper Series 8790, CESifo.
    13. Lusine Lusinyan, 2018. "Assessing the Impact of Structural Reforms Through a Supply-side Framework: The Case of Argentina," IMF Working Papers 2018/183, International Monetary Fund.
    14. Mirko Abbritti & Sebastian Weber, 2019. "Market Regulation, Cycles and Growth in a Monetary Union," IMF Working Papers 2019/123, International Monetary Fund.
    15. Ana Cristina Soares, 2020. "Price-cost margin and bargaining power in the European Union," Empirical Economics, Springer, vol. 59(5), pages 2093-2123, November.
    16. Bernadette Biatour & Chantal Kegels, 2015. "Working Paper 06-15 - Labour productivity growth in Belgium - Long-term trend decline and possible actions," Working Papers 1506, Federal Planning Bureau, Belgium.
    17. MARSCHINSKI Robert & DE AMORES HERNANDEZ Antonio & AMOROSO Sara & BAUER Peter & CARDANI Roberta & CSEFALVAY Zoltan & GENTY Aurelien & GKOTSIS Petros & GREGORI Wildmer & GRASSANO Nicola & HERNANDEZ GUE, 2021. "EU competitiveness: recent trends, drivers, and links to economic policy: A Synthesis Report," JRC Working Papers JRC123232, Joint Research Centre (Seville site).
    18. Gilbert Cette & Jimmy Lopez & Jacques Mairesse, 2016. "Market Regulations, Prices, and Productivity," American Economic Review, American Economic Association, vol. 106(5), pages 104-108, May.
    19. Johan E. Eklund & Emma Lappi, 2018. "Product regulations and persistence of profits: OECD evidence," Journal of Regulatory Economics, Springer, vol. 54(2), pages 147-164, October.
    20. Buiatti, C. & Duarte, J. B. & Saenz, L. F., 2017. "Why is Europe Falling Behind? Structural Transformation and Services' Productivity Differences between Europe and the U.S," Cambridge Working Papers in Economics 1708, Faculty of Economics, University of Cambridge.
    21. Andre Jungmittag, 2018. "The Direct and Indirect Effects of Product Market Regulations in the Retail Trade Sector," JRC Working Papers JRC112222, Joint Research Centre (Seville site).

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    More about this item

    Keywords

    market regulations; Productivity; Rents;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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