IMF Working Papers

Policy Complementarities: The Case for Fundamental Labor Market Reform

By Dennis J. Snower, David T. Coe

August 1, 1996

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Dennis J. Snower, and David T. Coe Policy Complementarities: The Case for Fundamental Labor Market Reform, (USA: International Monetary Fund, 1996) 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 paper argues that an important group of labor market policies are complementary in the sense that the effect of each policy is greater when implemented in conjunction with the other policies than in isolation. This may explain why the diverse, piecemeal labor market reforms in many European countries in recent years have had so little success in reducing unemployment. What is required instead is deeper labor market reforms across a broader range of complementary policies and institutions. To be politically feasible, these reforms must be combined with measures to address distributional issues.

Subject: Expenditure, Labor, Labor markets, Unemployment, Unemployment benefits, Unemployment rate, Wages

Keywords: Equilibrium equation, Europe, Labor market, Labor market equilibrium, Labor markets, Negative income tax, Policy complementarity, Replacement ratio, Skilled worker, UB system, Unemployment, Unemployment benefit reform, Unemployment benefit replacement, Unemployment benefits, Unemployment effect, Unemployment equilibrium, Unemployment equilibrium equation, Unemployment policy, Unemployment rate, Unemployment-reducing policy, Wages, WP

Publication Details

  • Pages:

    40

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1996/093

  • Stock No:

    WPIEA0931996

  • ISBN:

    9781451951257

  • ISSN:

    1018-5941

Notes

Also published in Staff Papers, Vol. 44, No. 1, March 1997.

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