Labour Market Institutions and Economic Performance
Richard Layard and
Stephen Nickell ()
CEP Discussion Papers from Centre for Economic Performance, LSE
Barely a day goes by without some expert telling us how the continental European economies are about to disintegrate unless their labour markets become more flexible. Basically, we are told, Europe has the wrong sort of labour market institutions for the modern global economy. These outdated institutions both raise unemployment and lower growth rates. The truth of propositions such as these depends on which labour market institutions really are bad for unemployment and growth, and which are not. Our purpose in this paper is to set out what we know about this question. Our conclusions indicate that the labour market institutions on which policy should be focused are unions and social security systems. Encouraging product market competition is a key policy to eliminate the negative effects of unions. For social security the key policies are benefit reform linked to active labour market policies to move people from welfare to work. By comparison, time spent worrying about strict labour market regulations, employment protection and minimum wages is probably time largely wasted.
References: Add references at CitEc
Citations: View citations in EconPapers (44) Track citations by RSS feed
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Chapter: Labor market institutions and economic performance (1999)
Working Paper: Labour Market Institutions and Economic Performance (1997)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0407
Access Statistics for this paper
More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().