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Policy Complementarities: The Case for Fundamental Labor Market Reform

Dennis Snower and David Coe ()

No 1996/093, IMF Working Papers from International Monetary Fund

Abstract: This paper argues that an important group of labor market policies are complementary in the sense that the effect of each policy is greater when implemented in conjunction with the other policies than in isolation. This may explain why the diverse, piecemeal labor market reforms in many European countries in recent years have had so little success in reducing unemployment. What is required instead is deeper labor market reforms across a broader range of complementary policies and institutions. To be politically feasible, these reforms must be combined with measures to address distributional issues.

Keywords: WP; labor market; negative income tax; replacement ratio; policy complementarity; UB system; unemployment effect; skilled worker; equilibrium equation; unemployment policy; unemployment-reducing policy; unemployment equilibrium equation; unemployment equilibrium; labor market equilibrium; unemployment benefit reform; unemployment benefit replacement; Labor markets; Unemployment; Unemployment benefits; Unemployment rate; Wages; Europe (search for similar items in EconPapers)
Pages: 40
Date: 1996-08-01
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Citations: View citations in EconPapers (18)

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Journal Article: Policy Complementarities: The Case for Fundamental Labor Market Reform (1997) Downloads
Working Paper: Policy Complementarities: The Case for Fundamental Labour Market Reform (1997) Downloads
Working Paper: Policy Complementarities: The Case for Fundamental Labor Market Reform (1996)
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