Is deregulation of product and labour markets promoting employment and productivity? A difference-in-differences approach

Hugo Correia and Ana Fontoura Gouveia ()
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Hugo Correia: Nova School of Business and Economics
Ana Fontoura Gouveia: GPEARI/Ministry of Finance and Nova SBE

No 84, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: This paper examine the impact of labour and product market reforms on sectoral employment and productivity, following a difference-in-differences approach. Using industry-level data for the period 1997-2013, we show that employment protection deregulation has a positive effect on sectoral employment for industries more exposed to labour market legislation, despite having a non-positive impact on productivity. Upstream product market deregulation also increases sectoral employment for the downstream sectors more dependent on upstream inputs. Nevertheless, it has mixed effects on sectoral productivity: while upstream sectors face productivity losses, the downstream sectors more exposed to the deregulated sectors grasp productivity gains.

Keywords: Labour Market Reforms; Product Market Reforms; Employment; Productivity (search for similar items in EconPapers)
JEL-codes: C23 E23 E24 J23 L16 O47 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2017-11, Revised 2017-11
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (3)

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https://www.gee.gov.pt/RePEc/WorkingPapers/GEE_PAPERS_84.pdf First version, 2017 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0084

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