The effects of Labour Market Reforms upon Unemployment and Income Inequalities: an agent based model

Giovanni Dosi, Marcelo Pereira, Andrea Roventini and Maria Enrica Virgillito

No 2016-24, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: This paper is meant to analyse the e ects of labour market structural reforms by means of an agent-based model. Building on Dosi et al. (2016b) we introduce a policy regime change characterized by a set of structural reforms on the labour market, keeping constant the structure of the capital- and consumption-good markets. Con rming a recent IMF report (Jaumotte and Buitron, 2015), the model shows how labour market structural reforms reducing workers' bargaining power and compressing wages tend to increase (i) unemployment, (ii) functional income inequality, and (iii) personal income inequality. We further undertake a global sensitivity analysis on key variables and parameters which confirms the robustness of our findings.

Keywords: Labor market structural reforms; Income distribution; Inequality; Unemployment; Long Run Growth (search for similar items in EconPapers)
JEL-codes: C63 E02 E12 E24 O11 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-cmp, nep-hme, nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

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Related works:
Working Paper: The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model (2016)
Working Paper: The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1624

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