The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model

Giovanni Dosi, Marcelo Pereira, Andrea Roventini and Maria Enrica Virgillito
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Marcelo Pereira: UNICAMP - Universidade Estadual de Campinas = University of Campinas

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Abstract: This paper is meant to analyse the e ects of labour market structural reforms by means of an agent-based model. Building on Dosi et al. (2016b) we introduce a policy regime change characterized by a set of structural reforms on the labour market, keeping constant the structure of the capital- and consumption-good markets. Con rming a recent IMF report (Jaumotte and Buitron, 2015), the model shows how labour market structural reforms re- ducing workers' bargaining power and compressing wages tend to increase (i) unemployment, (ii) functional income inequality, and (iii) personal income inequality. We further undertake a global sensitivity analysis on key variables and parameters which con rms the robustness of our findings.

Keywords: Labor market structural reforms; Income distribution; Inequality; Unemployment; Long run growth (search for similar items in EconPapers)
Date: 2016-07-01
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03459264v1
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Citations: View citations in EconPapers (46)

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Working Paper: The effects of Labour Market Reforms upon Unemployment and Income Inequalities: an agent based model (2016)
Working Paper: The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model (2016)
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