Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67161
Authors: 
Bassanini, Andrea P.
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 6918
Abstract: 
I examine the effect of labour market policies and institutions on the transmission of macroeconomic shocks to the labour market, using both aggregate and industry-level annual data for 23 OECD countries, 23 business-sector industries and up to 29 years. I find that high and progressive labour taxes and generous unemployment benefits amplify labour income fluctuations. By contrast, statutory minimum wages reduce the difference in the sensitivity of wages to aggregate shocks between low-wage and high-wage industries. Dismissal regulations are found to mitigate the impact of shocks on both earnings and employment. Moreover, this mitigation effect is greater in industries where firms have a greater propensity to make staffing changes through dismissals.
Subjects: 
employment fluctuations
business-cycle
EPL
tax wedge
unemployment benefits
JEL: 
J21
J31
J60
Document Type: 
Working Paper

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