Product market deregulation and the U.S. employment miracle

Monique Ebell and Christian Haefke ()

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual wage bargaining. Product market competition affects unemployment by two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980’s and 1990’s could be attributed to product market deregulation. Our quantitative analysis suggests that under individual bargaining, a decrease of less than two tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount.

Keywords: Product market competition; barriers to entry; wage bargaining (search for similar items in EconPapers)
JEL-codes: E24 J63 L16 O00 (search for similar items in EconPapers)
Date: 2002-12, Revised 2006-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://econ-papers.upf.edu/papers/930.pdf Whole Paper (application/pdf)

Related works:
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2015)
Journal Article: Product Market Deregulation and the U.S. Employment Miracle (2009)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2008)
Working Paper: Product market deregulation and the U.S. employment miracle (2008)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2008)
Working Paper: Product Market Deregulation and the U.S. Employment Miracle (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:930

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).