@techreport{DiTella1999consequences,
abstract = {We introduce a new data set on hiring and firing restrictions for 21 OECD countries for the
period 1984-90. The data are based on surveys of business people in the countries covered,
so the indices we use are subjective in nature. Controlling for country and time fixed effects,
and using dynamic panel data techniques, we find evidence that increasing the flexibility of
the labor market increases both the employment rate and the rate of participation in the labor
force. A conservative estimate suggests that if France were to make its labor markets as
flexible as those in the US, its employment rate would increase 1.6 percentage points, or 14%
of the employment gap between the two countries. The estimated effects are larger in the
female than in the male labor market, although both groups seem to have similar long run
coefficients. There is also some evidence that more flexibility leads to lower unemployment
rates and to lower rates of long-term unemployment. The analysis of inflows and vacancies
present some inconsistencies, although there is some evidence that the correlation between
inflows and the business cycle is stronger in more flexible labor markets (again this is stronger
for females). We also find some evidence consistent with the hypothesis that inflexible labor
markets produce \textquotedblleft{}jobless recoveries\textquotedblright{} and introduce more unemployment persistence.},
address = {Bonn},
author = {Rafael DiTella and Robert MacCulloch},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {J65; 330; Job security provisions; subjective data; employment; unemployment; Arbeitsmarktflexibilisierung; Sch\"{a}tzung; Besch\"{a}ftigungseffekt; Arbeitslosigkeit; OECD-Staaten},
language = {ger},
number = {B 02-1999},
publisher = {ZEI},
title = {The consequences of labour market flexibility: Panel evidence based on survey data},
type = {ZEI working paper},
url = {http://hdl.handle.net/10419/39517},
year = {1999}
}
