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

Roberto Martino and Phu Nguyen-Van

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: Deregulation of the labour market and public budget balance are usually consid- ered 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) and Levinsohn and Petrin (2003), a structural equation is estimated using a two stages semi-parametric procedure. Results suggest no univocal evidence of a detri- mental 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: 2014
New Economics Papers: this item is included in nep-mac and nep-ure
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 (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2014-19

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