The macroeconomic impact of euro area labor market reforms: evidence from a narrative panel VAR

Gerhard Rünstler

European Economic Review, 2024, vol. 168, issue C

Abstract: Using quarterly narrative evidence, the paper examines the macro-economic impact of reforms of unemployment benefits (UB) and employment protection legislation (EPL) in the euro area from a Bayesian narrative panel VAR. The approach complements micro-econometric approaches by assessing aggregate effects and aligning short- and medium-term effects in a unified framework. I find that liberalizing reforms of UB and regular contract EPL resulted in temporary wage declines and persistent increases in economic activity and employment.

Keywords: Employment protection legislation; Unemployment benefits; Narrative Identification; Discriminant Regression (search for similar items in EconPapers)
JEL-codes: E32 J08 O43 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:168:y:2024:i:c:s0014292124001491

DOI: 10.1016/j.euroecorev.2024.104820

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