EconPapers    
Economics at your fingertips  
 

Institutions and unemployment: Do interactions matter?

Andreas Sachs ()

No 11-057, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Isolated effects of labor and product market institutions as well as the interaction between both aforementioned categories on unemployment have been extensively discussed in the empirical literature. However, interaction effects between individual labor market institutions have been widely neglected, mainly due to the infeasibility to correctly specify the model. In this paper, a model averaging approach is adopted to show that considering institutional interactions can improve the explanatory power of macroeconomic models explaining unemployment. The approach permits to tackle model specification problems directly related to the inclusion of a large number of interactions. Using a panel data set for 17 OECD countries from 1982 to 2005, 22 robust and significant interactions can be identified. Furthermore, country-specific marginal effects of institutional changes are calculated and their economic significance is analyzed for selected countries.

Keywords: Unemployment; Institutions; Labor and Product Markets; Model Averaging; Institutional Interactions; Institutional Design (search for similar items in EconPapers)
JEL-codes: C33 E02 E24 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/49998/1/668440422.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:11057

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2023-02-08
Handle: RePEc:zbw:zewdip:11057