EconPapers    
Economics at your fingertips  
 

A fiscal job? An analysis of fiscal policy and the labor market

Elva Bova, Christina Kolerus () and Sampawende Tapsoba

IZA Journal of Labor Policy, 2015, vol. 4, issue 1, 1-17

Abstract: This paper examines the role of fiscal policies in the dynamics of the labor market. Through the lenses of Okun’s Law, we assess how fiscal policy instruments as well as fiscal consolidation and expansion episodes affect labor market outcomes. Using a panel of 34 OECD countries over the period 1985-2013, we find that fiscal consolidation has a sizeable, positive and robust impact on the Okun’s coefficient. This effect is particularly strong for expenditure based consolidations, suggesting that a reduction in the size of the government increases the responsiveness of employment to output and is not altered by an expansionary or recessionary position in the business cycle. Interestingly, we find no impact of fiscal expansion on the Okun’s coefficient nor for specific fiscal instruments. Copyright Bova et al. 2015

Keywords: E24; E32; E62; Okun’s Law; Fiscal policy (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1186/s40173-015-0041-x (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A Fiscal Job? An Analysis of Fiscal Policy and the Labor Market (2014) Downloads
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:spr:izalpo:v:4:y:2015:i:1:p:1-17:10.1186/s40173-015-0041-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40173

DOI: 10.1186/s40173-015-0041-x

Access Statistics for this article

IZA Journal of Labor Policy is currently edited by Juan F. Jimeno, David Neumark and Núria Rodríguez-Planas

More articles in IZA Journal of Labor Policy from Springer, Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-08-30
Handle: RePEc:spr:izalpo:v:4:y:2015:i:1:p:1-17:10.1186/s40173-015-0041-x