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Effects of Pro-Growth Policies on the Economic Stability of Firms, Workers and Households

Author

Listed:
  • Boris Cournède

    (OECD)

  • Paula Garda

    (OECD)

  • Peter Hoeller

    (OECD)

  • Volker Ziemann

    (OECD)

Abstract

Economic policies shape how much people earn but also how stable their income and jobs are. The level of earnings and the degree of economic stability both matter for well-being. Micro-level data indicate that, across OECD countries, economic instability is much greater at the level of individuals than at the aggregate level. The present study investigates the effects on micro-level stability of policies that boost growth. Movement from less to more productive processes and firms is at the heart of economic growth, which suggests possible trade-offs between growth and micro-level stability. The analysis indeed finds policy changes that boost growth but increase micro-level instability: reducing the progressivity or size of social transfers (including unemployment benefits) as well as moving from very to moderately tight restrictions on the competition for goods and services and on the dismissal of regular workers. However, the analysis also uncovers that moving to highly competitive policies generally reduces micro-level instability. Effets des politiques de croissance sur la stabilité économique des entreprises, des travailleurs et des ménages Les politiques économiques façonnent les revenus mais aussi leur stabilité ainsi que celle des emplois. De fait, le niveau comme la stabilité des revenus influencent sur le bien-être. Les micro-données indiquent que, dans l’ensemble des pays de l’OCDE, une bien plus grande instabilité économique prévaut au niveau des ménages qu’à celui des agrégats macro-économiques. Cette étude examine les effets des politiques économiques de croissance sur la stabilité micro-économique. Le mouvement vers des processus et des entreprises de plus en plus productifs constitue un moteur de la croissance économique : cette observation suggère qu’une tension peut opposer croissance et stabilité micro-économique. En effet, l’étude conclut qu’un certain nombre de réformes de croissance aggravent l’instabilité micro-économique : il s’agit des réformes qui réduisent la progressivité des impôts et des transferts sociaux (allocations chômage incluses) ainsi que de celles qui assouplissent à la marge des réglementations qui encadrent strictement la concurrence sur les marchés de produits ou le licenciement des travailleurs sous contrat de longue durée. Néanmoins, l’analyse fait aussi apparaître que réformer davantage pour mettre en place des régimes très favorables à la concurrence se traduit en général par une diminution de l’instabilité micro-économique.

Suggested Citation

  • Boris Cournède & Paula Garda & Peter Hoeller & Volker Ziemann, 2015. "Effects of Pro-Growth Policies on the Economic Stability of Firms, Workers and Households," OECD Economic Policy Papers 12, OECD Publishing.
  • Handle: RePEc:oec:ecoaab:12-en
    DOI: 10.1787/5js3777tdqjf-en
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    File URL: https://doi.org/10.1787/5js3777tdqjf-en
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    Citations

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    Cited by:

    1. Aida Caldera Sánchez & Alain de Serres & Naomitsu Yashiro, 2017. "Reforming in a Difficult Macroeconomic Context: A Review of Issues and Recent Literature," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-41, February.

    More about this item

    Keywords

    croissance économique; economic growth; household; micro data; micro-données; ménages; reform; stability; stabilité;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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