Taxation, labor policies and goods market regulation: Effects on the wages-productivity gap

Riccardo Tilli () and Andrea Rollin ()
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Andrea Rollin: University of Rome La Sapienza

No 5/2016, Working Papers from Interuniversity Research Center "Ezio Tarantelli"

Abstract: This paper proposes an empirical analysis about the influence of some institutional factors (taxation, active and passive labor market policies, labor and goods market regulation and unions participation) on the component of the wage growth not explained by the productivity growth (WP gap, thereafter). We consider a 14 OECD countries Panel Data over the period 1983-2003, using four different estimations: fixed effects vector decomposition (FEVD), fixed effects (FE), random effects (RE) and feasible general least square (FGLS). Results for all estimations show that the WP gap is affected by tax wedge, active labor market policies, employment protection for temporary workers and union density, while product market regulation and passive labor market policies do not play a significant role.

Keywords: taxation; labor market policies; labor and goods market regulation; collective bargaining; wage; productivity (search for similar items in EconPapers)
JEL-codes: J24 J30 J38 (search for similar items in EconPapers)
Pages: 11
Date: 2016-05
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