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Institut für Volkswirtschaftslehre, Universität Rostock >
Thünen Series of Applied Economic Theory, Universität Rostock >
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http://hdl.handle.net/10419/39729
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| Title: | | Labor market institutions: Curse or blessing?  |
| Authors: | | Ochsen, Carsten Welsch, Heinz |
| Issue Date: | | 2006 |
| Series/Report no.: | | Thünen-series of applied economic theory 62 |
| Abstract: | | Previous literature has identified considerable non-pecuniary costs to macroeconomic fluctuation and uncertainty. The present paper investigates whether and to what extent labor market institutions can mitigate those costs. We study how life satisfaction of European citizens is affected by employment protection and the level and duration of unemployment benefit payments. We differentiate between direct effects (at given macroeconomic conditions) and total effects (including the feedback through the institutions' effect on macroeconomic outcomes). We find that the total effect of employment protection is positive, whereas the total effect of benefit duration is negative. The direct and indirect effects of a higher benefit level nearly neutralize each other. |
| Subjects: | | unemployment benefit employment protection macroeconomic uncertainty cost-benefit analysis life satisfaction happiness |
| JEL: | | J30 E24 E60 D71 I31 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Thünen Series of Applied Economic Theory, Universität Rostock
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