Product Market Regulation and Market Work: A Benchmark Analysis

Lei Fang and Richard Rogerson

American Economic Journal: Macroeconomics, 2011, vol. 3, issue 2, 163-88

Abstract: Recent empirical work finds a negative correlation between product market regulation and aggregate employment. We examine the effect of product market regulations on hours worked in a benchmark model of time allocation. Product market regulations affect market work in effectively the same fashion as labor or consumption taxes. For product market regulations to affect aggregate market work, the key driving force is the size of income transfers associated with the regulations, and the key propagation mechanism is the labor supply elasticity. We show that industry level analysis is of little help in assessing the aggregate effects of product market regulation. (JEL E24, J22, L51)

JEL-codes: E24 J22 L51 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/mac.3.2.163
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Citations: View citations in EconPapers (24)

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Related works:
Working Paper: Product market regulation and market work: a benchmark analysis (2009)
Working Paper: Product Market Regulation and Market Work: A Benchmark Analysis (2007)
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