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Unemployment, institutions and reform complementarities: Re-assessing the aggregate evidence for OECD countries

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  • Andrea Bassanini

    (ERMES - Equipe de recherche sur les marches, l'emploi et la simulation - UP2 - Université Panthéon-Assas - CNRS - Centre National de la Recherche Scientifique, DELSA - OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

  • Romain Duval

    (ECO - Economics Department - OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

Abstract

There is no or limited consensus on the quantitative impact of institutions on unemployment, which has led some to question the case for structural reforms. Recent studies suggest also that institutions interact with each other and cannot be analysed in isolation. In this paper, we estimate a standard reduced-form model to explore the institutional determinants of unemployment and assess its robustness using a large battery of robustness checks. We show that, although the impact of each individual policy varies across countries due to policy interactions, the simple linear model can be used to draw inferences for countries with an average mix of institutions. The model is then extended to encompass systemic interactions, in which individual policies interact with the overall institutional framework. We find relatively robust evidence of broad reform complementarities.

Suggested Citation

  • Andrea Bassanini & Romain Duval, 2009. "Unemployment, institutions and reform complementarities: Re-assessing the aggregate evidence for OECD countries," Post-Print halshs-00395144, HAL.
  • Handle: RePEc:hal:journl:halshs-00395144
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00395144
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    References listed on IDEAS

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