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|dc.description.abstract||We introduce a new data set on hiring and firing restrictions for 21 OECD countries for theperiod 1984-90. The data are based on surveys of business people in the countries covered,so the indices we use are subjective in nature. Controlling for country and time fixed effects,and using dynamic panel data techniques, we find evidence that increasing the flexibility ofthe labor market increases both the employment rate and the rate of participation in the laborforce. A conservative estimate suggests that if France were to make its labor markets asflexible as those in the US, its employment rate would increase 1.6 percentage points, or 14%of the employment gap between the two countries. The estimated effects are larger in thefemale than in the male labor market, although both groups seem to have similar long runcoefficients. There is also some evidence that more flexibility leads to lower unemploymentrates and to lower rates of long-term unemployment. The analysis of inflows and vacanciespresent some inconsistencies, although there is some evidence that the correlation betweeninflows and the business cycle is stronger in more flexible labor markets (again this is strongerfor females). We also find some evidence consistent with the hypothesis that inflexible labormarkets produce “jobless recoveries” and introduce more unemployment persistence.||-|
|dc.relation.ispartofseries|||aZEI working paper |xB 02-1999||en_US|
|dc.subject.keyword||Job security provisions||-|
|dc.title||The consequences of labour market flexibility: Panel evidence based on survey data||en_US|
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