Research Catalog

Title

Employment Patterns in OECD Countries [electronic resource]: Reassessing the Role of Policies and Institutions / Andrea Bassanini and Romain Duval

Author

Bassanini, Andrea.

Publication

Paris : OECD Publishing, 2006.

Details

Additional Authors

Duval, Romain.

Description

127 p.; 21 x 29.7cm.

Summary

This paper explores the impact of policies and institutions on employment and unemployment of OECD countries in the past decades. Reduced-form unemployment equations, consistent with standard wage setting/price-setting models, are estimated using cross-country/time-series data from 21 OECD countries over the period 1982-2003. In the "average" OECD country, high and long-lasting unemployment benefits, high tax wedges and stringent anti- competitive product market regulation are found to increase aggregate unemployment. By contrast, highly centralised and/or coordinated wage bargaining systems are estimated to reduce unemployment. These findings are robust across specifications, datasets and econometric methods. As policies and institutions affect employment not only via their impact on aggregate unemployment but also through their effects on labour market participation - particularly for those groups "at the margin" of the labour market, group-specific employment rate equations are also estimated. In the "average" OECD country, high unemployment benefits and high tax wedges are found to be associated with lower employment prospects for all groups studied, namely prime-age males, females, older workers and youths. There is also evidence that group-specific policy determinants matter, such as targeted fiscal incentives. The paper also finds significant evidence of interactions across policies and institutions, as well as between institutions and macroeconomic conditions. Consistent with theory, structural reforms appear to have mutually reinforcing effects: the impact of a given policy reform is greater the more employment-friendly the overall policy and institutional framework. Certain more specific interactions across policies and institutions are found to be particularly robust, notably between unemployment benefits and public spending on active labour market programmes as well as between statutory minimum wages and the tax wedge. Finally, it is shown that macroeconomic conditions also matter for unemployment patterns, with their impact being shaped by policies.

Series Statement

OECD Economics Department Working Papers, 1815-1973 ; no.486

Uniform Title

OECD Economics Department Working Papers, no.486.

Subject

Economics

LCCN

10.1787/846627332717

OCLC

oecd-lib

Author

Bassanini, Andrea.

Title

Employment Patterns in OECD Countries [electronic resource]: Reassessing the Role of Policies and Institutions / Andrea Bassanini and Romain Duval

Imprint

Paris : OECD Publishing, 2006.

Series

OECD Economics Department Working Papers, 1815-1973 ; no.486

OECD Economics Department Working Papers, 1815-1973 ; no.486.

Connect to:

Full text online available onsite at NYPL

Indexed Term

Economics

Added Author

Duval, Romain.

Other Standard Identifier

10.1787/846627332717 doi