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Market Imperfections and Employment

Listed author(s):
  • Paul Geroski

    (London Business School)

  • Paul Gregg

    (National Institute of Economic and Social Research)

  • John van Reenen

    (Institute of Fiscal Studies)

This working paper addresses the question whether imperfect competition in product markets contributes substantially to the level and persistence of unemployment in modern industrial economies. In section I, the paper documents the available empirical research of the origin and extent of product market power held by firms due to market imperfections. The implications for employment are then explored through transmission of such power into the labour market through wages (section 2) and output reduction from pricing above marginal cost or wage levels below marginal revenue product (section 3). The role for such product market power in the macroeconomic analysis of unemployment is also explored in section 3, but little evidence of the importance on the macro level is available. The paper thus assesses the extent of product market imperfections and their importance in wage setting. It concludes that product market imperfections are widespread and although large deviations of price ... Les imperfections du marché et l'emploi Ce document de travail examine la question de savoir si la concurrence imparfaite sur les marchés des biens contribue substantiellement au niveau et à la persistance du chômage dans les économies industrielles modernes. Dans la première partie, le document passe en revue la recherche empirique disponible sur l’origine et l’étendue du pouvoir de contrôle détenu par les entreprises sur le marché des biens du aux imperfections du marché. Les effets sur l’emploi de ce pouvoir de contrôle par le biais des salaires sont examinés dans la partie II, puis dans la partie III, par le biais de la réduction de la production due à un prix superieur ou coût marginal, ou bien à des niveaux de salaires inferieurs à la productivité marginale. La partie III considère en outre le rôle d’un tel pouvoir dans l’analyse macroéconomique du chomage mais il n’y a que peu de données disponibles sur son importance à ce niveau. Ce rapport évalue la portée des imperfections du marché des produits et leur ...

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Paper provided by OECD Publishing in its series OECD Jobs Study Working Papers with number 5.

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Date of creation: 01 Jan 1995
Handle: RePEc:oec:elsaac:5-en
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