Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76724
Authors: 
Sachs, Andreas
Schleer, Frauke
Year of Publication: 
2013
Series/Report no.: 
ZEW Discussion Papers 13-040
Abstract: 
Reducing institutional rigidities in product and labour markets is key to lowering unemployment. The impact of such labour and product market reforms, however, depends crucially on the country-specific regulatory framework. In this paper, we estimate the country-specific impact of changes in six categories of institutional regulation conditional on the country-specific regulatory environment for a dynamic panel of 26 OECD countries. We overcome existing problems of modelling a large set of institutional interdependencies by applying a model selection approach which is innovative within this literature. In doing so, we provide evidence for the existence of higher-order institutional interdependencies. We further document that especially for changes in employment protection and the unemployment benefit system the impact on unemployment is mixed across countries, thus questioning the relevance of best-practice policies.
Subjects: 
labour market institution
institutional interdependencies
model selection
heuristic optimization
JEL: 
C33
E02
E24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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