Labour market regulation and fiscal parameters: a structural model for European regions

Roberto Martino and Phu Nguyen-Van

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: Deregulation of the labour market and public budget balance are usually considered a fundamental requirement for economic performance. This study analyses the long term relationship between these indicators and gross value added (GVA) for a panel of European regions from 1995 to 2008. Following Olley and Pakes (1996), Levinsohn and Petrin (2003) and Ackerberg et al. (2006), a structural equation is estimated using a two stages semi-parametric procedure. Results suggest no univocal evidence of a detrimental effect of labour protection on long term GVA, while public deficit spending is positively associated with higher output. A negative relationship with debt arises only for economies with very high debt/GDP ratios

Keywords: Labour protection; convergence criteria; production function; European Union. (search for similar items in EconPapers)
JEL-codes: C20 E23 O47 R11 (search for similar items in EconPapers)
Date: 2015-07-01
Note: ISSN 2039-1854
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Labour market regulation and fiscal parameters: A structural model for European regions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2015/200

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