Drivers and effects of labour market reforms: Evidence from a novel policy compendium

Dragos Adascalitei and Clemente Pignatti
Additional contact information
Dragos Adascalitei: Central European University

IZA Journal of Labor Policy, 2016, vol. 5, issue 1, 1-32

Abstract: Abstract The paper analyses the determinants and short-term effects of labour market reforms, using information from a novel policy compendium that covers 110 developed and developing economies between 2008 and 2014. We find that the approval of reforms is positively associated with the unemployment rate, the simultaneous implementation of fiscal consolidation measures and the presence of a fixed exchange rate regime. Differences in the results are explored by looking at the direction of reforms (i.e. increasing or decreasing legislation), temporal horizon (i.e. temporary or permanent measures) and coverage (i.e. complete or two-tier reforms); while also analysing separately reforms’ determinants across domains of labour legislation (e.g. permanent contracts, collective dismissals). Finally, we find that deregulatory labour market reforms tend to increase the unemployment rate in the short run when they are approved during contractionary periods—while they have a non-significant effect when approved during periods of economic stability or expansion. JEL Classification: J20, J52, J38, J48, J58, K31

Keywords: Labour market reforms; Employment protection legislation; Unemployment; Developed economies; Developing economies (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://link.springer.com/10.1186/s40173-016-0071-z Abstract (text/html)

Related works:
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:5:y:2016:i:1:d:10.1186_s40173-016-0071-z

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

DOI: 10.1186/s40173-016-0071-z

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 ().