Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128013
Authors: 
Ebell, Monique
Haefke, Christian
Year of Publication: 
2002
Series/Report no.: 
Working Paper, Study Center Gerzensee 02.08
Abstract: 
We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a Mortensen-Pissarides model with monopolistic competition in the goods market and individual wage bargaining. Product market competition affects unemployment via two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. A calibrated model compares a high-regulation European regime to a low-regulation Anglo-American one. Our quantitative analysis suggests that under individual bargaining, no more than half a percentage point of European unemployment rates can be attributed to entry regulation.
Subjects: 
Product market competition
barriers to entry
wage bargaining
European Unemployment Puzzle
JEL: 
E24
J63
L16
O00
Document Type: 
Working Paper

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