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Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?

Giuseppe Fiori, Giuseppe Nicoletti (), Stefano Scarpetta and Fabio Schiantarelli

No 2770, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides a systematic empirical investigation of the effect of product market liberalization on employment when there are interactions between policies and institutions in product and labor markets. Using panel data for OECD countries over the period 1980-2002, we present evidence that product market deregulation is more effective at the margin when labor market regulation is high. Moreover, there is evidence in our sample that product market deregulation promotes labor market deregulation. We show that these results are mostly consistent with the basic predictions of a standard bargaining model, such as Blanchard and Giavazzi (2003), extended to allow for a richer specification of the fall back position of the union and for taxation.

Keywords: liberalization; competition; employment; unions; deregulation (search for similar items in EconPapers)
JEL-codes: J23 J50 L50 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2007-05
New Economics Papers: this item is included in nep-bec, nep-eec and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

Published - published as "Employment Effects of Product and Labour Market Reforms: Are There Synergies?" in: Economic Journal, 2012, 122 (558), 79-104

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Working Paper: Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements? (2008) Downloads
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