Labour market institutions and unemployment: an international panel data analysis

Gebhard Flaig and Horst Rottmann

Empirica, 2013, vol. 40, issue 4, 635-654

Abstract: This paper deals with the effects of labour market institutions on unemployment in a panel of 19 OECD countries for the period 1960–2000. In contrast to many other studies, we use long time series and analyse cyclically adjusted trend values of the unemployment rate. Our novel contribution is the estimation of panel models where we allow for heterogeneous effects of institutions on unemployment. Our main results are, first, that on the average tighter employment protection, a higher tax burden on labour income and a more generous unemployment insurance system increase, whereas a higher centralization of wage negotiations decreases unemployment, and secondly, that the magnitude of the effects of institutions differs considerably between countries. Copyright Springer Science+Business Media New York 2013

Keywords: Employment protection; Labour market institutions; Unemployment; International comparison; J23; E24; J50 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (17)

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DOI: 10.1007/s10663-012-9208-5

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