Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33172
Authors: 
Ebell, Monique
Haefke, Christian
Year of Publication: 
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

Files in This Item:
File
Size
480.59 kB





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