On the benefits from rigid labour markets : norms, market failures,and social insurance
1998 (English)Report (Other academic)
The common view that far-reaching labour market deregulation is the only remedy for high European unemployment is too simplistic. First, the evidence suggests that deeply rooted social customs are an important cause of wage rigidity, going beyond the legal constraints emphasized in the political debate. Second, in a second-best setting, a compressed wage structure may generate an efficiency gain. Finally, based on simple plots of the relation between labour market institutions and openness in OECD countries, I conclude that the globalization of economic activity may lead to increased demand for various labour market rigidities.
Place, publisher, year, edition, pages
Uppsala: Nationalekonomiska institutionen , 1998. , 29 p.
Working paper, ISSN 0284-2904
IdentifiersURN: urn:nbn:se:uu:diva-2424ISBN: 99-2710296-8OAI: oai:DiVA.org:uu-2424DiVA: diva2:128685