Labour Market Regulation in the EU-15: Causes and Consequences – A Survey

William Siebert ()

No 2430, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Why should floors be set under wages and working conditions by labour market regulations? This paper finds that efficiency arguments are questionable, because of the disemployment effects of strict regulation. Regulation is better explained in terms of the choices of the employed semi- and unskilled worker group. This group contains the median voter, who rationally desires strict regulation to divert rent from other groups such as the skilled workers and the unemployed. Legal origin may also be important: some countries have fallen under the influence of the interventionist French (or German) legal tradition. Given a predisposition to intervene, these countries begin with some degree of labour regulation, which then creates its own constituency of rent protectors and rent growers.

Keywords: long-term unemployment; job opportunity inequality; labour market regulation; European Union; median voter; minimum wages; legal origin; working conditions floors; wage inequality (search for similar items in EconPapers)
JEL-codes: J38 J41 J58 J68 J83 K31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-11
New Economics Papers: this item is included in nep-eec, nep-lab, nep-law and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: R. Vaubel and P. Bernholz (eds.), Political Competition and Economic Regulation, London: Routledge 2007

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