Labour Market Institutions and the Employment Intensity of Output Growth

Gebhard Flaig and Horst Rottmann

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper deals with the effects of labour market institutions onlabour market performance. We analyse as an indicator for the labourintensity of output growth the employment threshold (the minimum growthrate of output necessary to keep employment constant). We show for asample of 17 OECD countries for the period 1971 to 2002 that thestrictness of employment protection raises the employment threshold inall econometric specifications. A higher wage bargaining co-ordinationand a higher tax wedge reduce also the labour intensity of production,although the effects are not in all econometric specificationssignificant.

Date: 2009
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Published in Jahrbücher für Nationalökonomie und Statistik 1 229(2009): pp. 22-35

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