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Labour Market Regulation in the EU-15: Causes and Consequences – A Survey

  • Siebert, W. Stanley

    ()

    (University of Birmingham)

Why should floors be set under wages and working conditions by labour market regulations? This paper finds that efficiency arguments are questionable, because of the disemployment effects of strict regulation. Regulation is better explained in terms of the choices of the employed semi- and unskilled worker group. This group contains the median voter, who rationally desires strict regulation to divert rent from other groups such as the skilled workers and the unemployed. Legal origin may also be important: some countries have fallen under the influence of the interventionist French (or German) legal tradition. Given a predisposition to intervene, these countries begin with some degree of labour regulation, which then creates its own constituency of rent protectors and rent growers.

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File URL: http://ftp.iza.org/dp2430.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2430.

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Length: 26 pages
Date of creation: Nov 2006
Date of revision:
Publication status: published in: R. Vaubel and P. Bernholz (eds.), Political Competition and Economic Regulation, London: Routledge 2007
Handle: RePEc:iza:izadps:dp2430
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  1. Gilles Saint Paul, 1999. "The political economy of employment protection," Economics Working Papers 355, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
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  7. Edward L. Glaeser & Andrei Shleifer, 2001. "Legal Origins," NBER Working Papers 8272, National Bureau of Economic Research, Inc.
  8. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Juan Botero, 2003. "The Regulation of Labor," NBER Working Papers 9756, National Bureau of Economic Research, Inc.
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  14. Boeri, Tito & Conde-Ruiz, José Ignacio & Galasso, Vincenzo, 2004. "Cross-Skill Redistribution and the Trade-Off Between Unemployment Benefits and Employment Protection," CEPR Discussion Papers 4711, C.E.P.R. Discussion Papers.
  15. Stephen Nickell & Glenda Quintini, 2003. "Nominal wage rigidity and the rate of inflation," Economic Journal, Royal Economic Society, vol. 113(490), pages 762-781, October.
  16. Saint-Paul, Gilles, 1997. "The Rise and Persistence of Rigidities," CEPR Discussion Papers 1571, C.E.P.R. Discussion Papers.
  17. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
  18. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
  19. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
  20. Gray, David M, 1995. "All Displaced Workers Are Not Created Equal: The Political Economy of Worker Adjustment Assistance in France," Public Choice, Springer, vol. 85(3-4), pages 313-33, December.
  21. John T. Addison & W. Stanley Siebert, 1994. "Recent Developments in Social Policy in the New European Union," ILR Review, Cornell University, ILR School, vol. 48(1), pages 5-27, October.
  22. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323, December.
  23. Botero, J. C. & Djankov, S. & Porta, R. L. & Lopez-de-Silanes, F. & Shleifer, Andrei, 2004. "The Regulation of Labor," Scholarly Articles 27867241, Harvard University Department of Economics.
  24. Addison, John T & Siebert, W Stanley, 1994. "Vocational Training and the European Community," Oxford Economic Papers, Oxford University Press, vol. 46(4), pages 696-724, October.
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