Lessons from Successful Labor Market Reformers in Europe

 
Author/Editor: Annett, Anthony
 
Publication Date: May 01, 2007
 
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Disclaimer: This Policy Dicussion Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: Welfare states can be reformed successfully, and popular support for reforms can be maintained. But this requires an internally consistent package of labor market, fiscal, and product market reforms, including some kind of buy-in, through, for example, tax cuts. Empirical analysis combined with a select number of case studies-comprising Ireland, Denmark, the Netherlands, and the United Kingdom-reveals that successful reformers focused on increasing labor supply through benefit reform, lowering tax wedges, and lowering government consumption. At the same time, greater labor supply translated into employment growth more effectively in the presence of liberal labor and product markets.
 
Series: Policy Discussion Paper No. 07/1
Subject(s): Labor market reforms | Europe | Labor supply | Tax reductions | Wage bargaining | Political economy | Employment

Author's Keyword(s): Labor supply | wage moderation | fiscal adjustment | political economy
 
English
Publication Date: May 01, 2007
ISBN/ISSN: 1934-7456 Format: Paper
Stock No: PPIEA2007001 Pages: 23
Price:
US$18.00 (Academic Rate:
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