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http://hdl.handle.net/10419/33172
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| Title: | | Product market deregulation and the US employment miracle  |
| Authors: | | Ebell, Monique Haefke, Christian |
| Issue Date: | | 2006 |
| Series/Report no.: | | IZA Discussion Papers 1946 |
| Abstract: | | We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual wage bargaining. Product market competition affects unemployment by two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980's and 1990's could be attributed to product market deregulation. Our quantitative analysis suggests that under individual bargaining, a decrease of less than two tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount. |
| Subjects: | | product market competition barriers to entry wage bargaining |
| JEL: | | E24 J63 L16 O00 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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