Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/21374
Authors: 
Koeniger, Winfried
Year of Publication: 
2002
Series/Report no.: 
IZA Discussion paper series 554
Abstract: 
It is commonly argued that labor market institutions such as employment protection worsen an economy?s performance and particularly so, if product markets become more competitive. Empirical evidence, however, has difficulties to detect a robust negative correlation between employment protection and growth. We show in a model with step-by-step innovations that whether employment protection decreases incentives to innovate and thus productivity growth depends on the degree of product market competition. For reasonable parameter values product market deregulation fosters growth substantially more in the flexible than in the constrained economy.
Subjects: 
step-by-step innovations
firing cost
Schumpeterian growth
JEL: 
L1
J65
O31
Document Type: 
Working Paper

Files in This Item:
File
Size
522.73 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.