Labor and Product Market Deregulation: Partial, Sequential, or Simultaneous Reform?

December 1, 2005

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Format: Chicago

Helge Berger, and Stephan Danninger. Labor and Product Market Deregulation: Partial, Sequential, or Simultaneous Reform?, (USA: International Monetary Fund, 2005) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This study explores the effects of labor and product market deregulation on employment growth. Our empirical results, based on an OECD country panel from 1990-2004, suggest that lower levels of product and labor market regulation foster employment growth, including through sizable interaction effects. Based on these findings, the paper develops a theoretical framework for evaluating deregulation strategies in the presence of reform costs. Optimal deregulation takes various forms depending on the deregulation costs, the strength of reform interactions, and the perspective of the policymaker. Unless deregulation costs are very asymmetric across markets, optimal deregulation requires some form of coordination.

Subject: Commodity markets, Employment, Labor market reforms, Labor market regulations, Labor markets

Keywords: Employment growth, Labor market regulation, Temporary employment, WP

Publication Details

Pages:

35
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/227
Stock No:

WPIEA2005227
ISBN:

9781451862461
ISSN:

1018-5941

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