## _wp0597

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---

### I. Introduction — objectives and framing
- Institutional “rigidities” across Europe persist because they perform functions for groups that benefit and lobby for them.
- Clusters of institutional rigidities exist: strictness in product markets is positively correlated with strictness in labor markets.
- Reforms are difficult mainly due to strong political opposition; reform activity has intensified especially in the labor market area but reforms tend to be marginal and sometimes reversed.
- Regulatory changes in labor markets are more frequent following increased competitive pressures in product markets (examples: progress on the EU Single Market Programme; after the introduction of the euro).
- Paper objectives:
  - Review reforms using detailed qualitative inventories from Fondazione Rodolfo Debenedetti.
  - Provide a simple framework to evaluate interactions between product- and labor-market reforms and sequencing.
  - Survey literature on reverse linkages (labor → product markets).
  - Assess political obstacles to reforms and devise four strategies to overcome opposition.
- Sections: II (Taking Stock of Reforms), III, IV, and V (conclusion).

### II. Taking Stock of Reforms — overview and data
- OECD aggregate indicators (1997 and 1999a) show a high degree of correlation between product- and labor-market regulatory strictness.
- Cross-sectional clusters of “rigidities” documented in the literature; less is known about time-series properties.
- Significant reform activity has occurred over time; important to analyze nature, scope, and cross-domain interactions.
- Main labor market data source: “Social Policy Reform Inventory” assembled by Fondazione Rodolfo Debenedetti (draws on OECD country reviews, Income Data Source studies, EC-MISSOC reports, etc.).
- Inventory covers reforms in:
  - Non-employment benefits (unemployment benefits and various cash transfers to working-age individuals),
  - Provisions for retirement (affecting participation of older workers),
  - Employment protection.
- The FRDB inventory complements OECD indicators by providing qualitative features and information on political opposition; it can reveal reform attempts even when aggregate indicators show little or no change.
- Inventory observation period: 18 years.
- Total counted reforms: almost 414 reforms.

### II.A Labor market reforms — classification and empirical validation
- Two main classification dimensions:
  - Orientation: whether reforms reduce or increase generosity of public pensions and nonemployment benefits, or change stringency of employment protection.
  - Depth: whether reforms are marginal or radical, determined in two stages:
    - Stage 1 — Qualitative assessment: classify as radical if at least one criterion met:
      - Reduce replacement rates at the average production worker (APW) level by at least 10 percent;
      - Are comprehensive (not just minor features, but broader design of cash transfer schemes);
      - Involve existing entitlements rather than being phased-in only for new beneficiaries (e.g., employment protection reforms should concern workers under permanent contracts).
    - Stage 2 — Empirical validation: examine affected series and confirm qualitative assessment only if a change in the underlying trend is observed.
      - Stage 2 can only be implemented for reforms carried out before 1993 (need minimum observations).
      - If reforms are followed shortly by reversing measures, Stage 2 validation may be infeasible; in such cases only Stage 1 assessment is used.
      - Stage 1 assessments were validated in 85 percent of the cases.
- Series used for empirical validation:
  - Employment protection: labor market flows, notably unemployment inflows.
  - Pensions: dynamics of pension expenditures and revenues earmarked to public pension funds.
  - Nonemployment benefits: proxy outflows from unemployment (or outflows from live registers to jobs where available).
- Examples of radical pension reforms cited: 1998 Swedish pension reform; Amato reform in Italy in 1992.

### II.A — Main empirical inventory results and stylized facts
- Average frequency: 1.6 per year and country.
- Total recorded regulatory changes: 414.
- Marginality of reforms: 388 out of 414 of regulatory changes did not pass the two-stage procedure identifying radical reforms.
- Directional split:
  - Reforms reducing generosity/increasing rewards from participation and reducing protection: 241 out of 414.
  - Remaining reforms moved in the opposite direction.
- Temporal patterns:
  - Acceleration of reforms in the last six-year period covered by the data (roughly corresponding to a Parliamentary term).
  - Since 1990, the ratio of marginal to structural reforms has increased.
  - In recent years, on non-employment benefits reforms: 93 out of 120 oriented towards increasing rewards from labor market participation.
- Undoing and complexity:
  - Frequent reversal of reforms over a few years, increasing institutional complexity and labor market dualism (insiders vs outsiders and among types of outsiders).
  - Example: Italy counted 38 different contractual types (expected to increase to 43 with the “Biagi” 2003 reform).

### Reforms and the macroeconomic environment (labor markets)
- Among reforms that tightened benefits, increased rewards from participation or reduced employment protection: 298 in total.
  - Of these, 12 carried out during recessions (negative GDP growth).
  - 59 carried out under slow growth (zero to 2 percent GDP growth).
- When GDP was growing at more than 2 percent per year:
  - 205 politically difficult reforms.
  - 119 politically popular reforms (increasing generosity, adding protections, reducing rewards from participation).
  - Only four politically difficult reforms were radical among those carried out when GDP was growing less than 2 percent per year.
- Interpretation:
  - Negative or slow growth does not prevent reforms in this dataset. Radical/unpopular reforms are difficult under adverse macro conditions, but regulatory changes are more likely to reduce generosity and employment protection when macroeconomic conditions are less favorable.

### Product market reforms — measurement and patterns
- No dedicated inventory; proxy-reforms defined as changes in OECD regulatory indicators (yearly time-series).
- Coverage: selected service sectors — airlines, telecoms, electricity, gas, postal services, railways, and road freight — focusing on barriers to entry.
- Classification:
  - Grouped per six-year time-periods.
  - Orientation (increasing or decreasing competition).
  - Scope: radical if step change ≥ one-third of indicator’s potential range; marginal otherwise.
- Key facts:
  - Much fewer reforms moving in opposite directions compared with labor markets; regulatory changes mostly aimed at increasing competition in all industries.
  - Relatively more “discrete” (radical) reforms in product markets than in labor markets.
  - Acceleration of product market reforms mainly in the first half of the 1990s (series available up to 1998).
  - Qualitative evidence: 2002–03 OECD counted nine labor market reforms (and six proposed) versus five product market reforms (and three proposed).
- Concentration and convergence:
  - Product market regulatory changes tend to be more concentrated in periods of strong recovery.
  - No clear convergence across countries in degree of liberalization: countries more regulated initially are not necessarily those liberalizing most.
- Summary statistics from source tables:
  - Table 3 overall total: 170 product-market “reforms” (with 97.65 percent decreasing barriers to entry reported).
  - Table 3 average per year figures: 5.7 (1985–1990), 16.3 (1991–1996), 19.5 (1997–1998), overall average 12.14.

### Interactions between labor and product market reforms — theory and mechanisms
- Environmental changes cited as drivers: Single Market Programme progress, reduction of trade barriers, introduction of the euro (effects on capital flows and price transparency).
- Simple model (Bertola and Boeri, 2003) — key mechanisms:
  - Labor demand characterized by inverse labor demand elasticity η (0<η<1); decrease in η = increase in product market competition.
  - Competitive equilibrium (zero unemployment): w = A η/(η+ε) and l = A/(η+ε) (text summary).
  - Bilateral monopoly / bargaining: wages include mark-up μ over opportunity cost: w = μ A; μ depends on bargaining power β and elasticities.
  - Comparative statics:
    - A fall in η (more product market competition) leads in the short run to worse employment outcomes if bargaining institutions (μ) are fixed.
    - Long run: increased competition fosters labor market reform lowering μ closer to 1 (competitive outcome).
  - Key prediction: increased product market competition simultaneously increases pressures for labor market reform and opposition to it (short-run losers).
- Reverse causality (Blanchard and Giavazzi, 2003):
  - Labor market deregulation (decrease in bargaining power of workers) reduces wages and increases profits short-run; long-run entry of firms increases competition, reduces markups, and can lower unemployment and raise real wages.
  - Labor market deregulation has a short-run redistribution cost for workers but potential longer-run employment gains via increased entry and reduced markups.
  - Partial-sector product market deregulation can create strong opposition from affected workers due to large partial equilibrium losses.

### Political-economy strategies for implementing reforms — four lessons
1. Exploit institutional trade-offs
   - UB/EPL trade-off: unemployment benefits (UB) and employment protection legislation (EPL) are substitutable ways to insure against unemployment risk.
   - Empirical correlation: countries with stronger dismissal restrictions tend to have smaller unemployment insurance programs; UB generosity measured as coverage × net replacement rate.
   - Policy implication: reforms of EPL should be paired with state-provided unemployment insurance and active labor market policies (search assistance, subsidized training) to reconcile flexibility and protection.
2. Unbundling and marginal reforms in labor markets
   - Apply reforms initially to subsets (new entrants, high-skill groups, youngsters, dynamic regions) to build acceptance and gradually extend rules to all.
   - Survey evidence (Fondazione Rodolfo Debenedetti, April 2002, Italy): being aged more than 55 → 20 percent higher probability to favor employment protection; low education → +12 percent; low education interacting with having lost a job → +40 percent.
   - Risks: long transitions can entrench two-tier systems; example: Swedish pension reform spared only 10 percent while Italian transition left 60 percent outside new rules and completes only in 2065.
   - Political feasibility theorem: reforms of employment protection should trade flexibility with unemployment insurance; more favorable when education higher and capital markets deeper.
3. Product market reforms require radical, not marginal, change
   - Marginal product market reforms (sector-specific, applying only to new entrants) are unsustainable because incumbents can drive away new competitive fringe.
   - Hence, product market reforms need to be radical and comprehensive to be viable and long-lasting.
   - Political difficulty: strong incumbents’ lobbying and limited political mobilization by consumers relative to workers.
4. Delegation to supranational authorities viable for product markets
   - Delegating reform power (e.g., EU Trade and Competition policy) can help implement product market liberalization and prevent undoing of reforms (Ulysses strategy).
   - Economic rationale: cross-border externalities and fiscal federalism arguments stronger for product markets than for labor/social policies.
   - Not generally viable for labor market reforms given country-specific welfare configurations and advantages of decentralized management.

### Summary of empirical tables and figures — select exact figures
- Total labor market reforms (1985–2003): 414 reforms overall.
- Marginal reforms: 388 out of 414.
- Reforms reducing generosity/increasing rewards and reducing protection: 241 out of 414.
- Non-employment benefits recent orientation: 93 out of 120 toward increasing rewards from participation.
- Product market table totals and averages:
  - Table 3 overall total: 170; 97.65 percent decreasing barriers to entry.
  - Table 3 average per year: 5.7 (1985–1990), 16.3 (1991–1996), 19.5 (1997–1998), overall average 12.14.
- Selected figure statistics:
  - Figure 2 reports R^2 = 0.2195 for correlation between initial EPL level and EPL reforms 1998–2002.
  - Figure 5 (UB/EPL tradeoff) reports R^2 = 0.5077 and correlation: -0.7126.
  - Table 4 product markets and GDP growth totals shown as 22, 10, 25, 153, 1, 0, 1, 7 with bracketed averages (0.40), (0.42), (0.31), (0.58), (1), --, (1), (0.58).

*Content drawn from _wp0597 - References (PDF).*

### References..............................................................................................................

### _wp0597 - References

### I. Introduction
- Institutional “rigidities” across Europe persist because they perform functions for groups that benefit and lobby for them.
- Clusters of institutional rigidities exist: strictness in product markets is positively correlated with strictness in labor markets.
- Reforms are difficult mainly due to strong political opposition; reform activity has intensified especially in the labor market area but reforms tend to be marginal and sometimes reversed.
- Regulatory changes in labor markets are more frequent following increased competitive pressures in product markets (e.g., progress on the EU Single Market Programme and after the introduction of the euro).
- Paper objectives:
  - Review reforms using detailed qualitative inventories from Fondazione Rodolfo Debenedetti.
  - Provide a simple framework to evaluate interactions between product- and labor-market reforms and sequencing.
  - Survey literature on reverse linkages (labor → product markets).
  - Assess political obstacles to reforms and devise four strategies to overcome opposition.
- Sections: II (Taking Stock of Reforms), III, IV, and V (conclusion).

### II. Taking Stock of Reforms — Overview
- OECD aggregate indicators (1997 and 1999a) show a high degree of correlation between product- and labor-market regulatory strictness; nations with strict product market regulation also show stronger barriers to dismissals (Nicoletti, Scarpetta and Boylaud, 1999).
- Cross-sectional clusters of “rigidities” are documented in the literature (Bertola and others, 2001; Nicoletti and Scarpetta, 2003; Bertola and Boeri, 2003), but less is known about time-series properties.
- Significant reform activity has occurred over time; important to analyze nature, scope, and cross-domain interactions.

### II.A Labor Market Reforms — Data Source and Scope
- Main data source: “Social Policy Reform Inventory” assembled by Fondazione Rodolfo Debenedetti (draws on OECD country reviews, Income Data Source studies, EC-MISSOC reports, etc.).
- Inventory covers reforms in:
  - Non-employment benefits (unemployment benefits and various cash transfers to working-age individuals),
  - Provisions for retirement (affecting participation of older workers),
  - Employment protection.
- The FRDB inventory complements OECD indicators by providing qualitative features and information on political opposition; it can reveal reform attempts even when aggregate indicators show little or no change.
- Inventory website: www.FRDB.org.

### II.A — Classification of Reforms (two main dimensions)
- Orientation: whether reforms tend to reduce or increase:
  - Generosity of public pensions and nonemployment benefits,
  - Stringency of employment protection.
- Depth: whether reforms are marginal or radical, determined in two stages:
  - Stage 1 — Qualitative assessment: classify as radical if at least one criterion is met:
    - Reduce replacement rates at the average production worker (APW) level by at least 10 percent;
    - Are comprehensive (not just minor features, but broader design of cash transfer schemes);
    - Involve existing entitlements rather than being phased-in only for new beneficiaries (e.g., employment protection reforms should concern workers under permanent contracts).
  - Stage 2 — Empirical validation: examine the series most affected by the reform and confirm the qualitative assessment only if a change in the underlying trend is observed.
    - Stage 2 can only be implemented for reforms carried out before 1993 (need minimum observations).
    - If reforms are followed shortly by reversing measures, Stage 2 validation may be infeasible; in such cases only Stage 1 assessment is used.
    - Stage 1 assessments were validated in 85 percent of the cases.

### II.A — Series used for empirical validation (by reform type)
- Employment protection: used labor market flows, notably unemployment inflows, based on prior findings of a strong negative correlation between employment protection and incidence of unemployment.
- Pensions: used dynamics of pension expenditures and revenues earmarked to public pension funds; radical reforms expected to significantly affect at least one and thereby alter equilibrium contribution rates.
  - Examples of radical pension reforms cited: 1998 Swedish pension reform; Amato reform in Italy in 1992.
- Nonemployment benefits: used proxy outflows from unemployment (or outflows from live registers to jobs where available); radical reforms expected to significantly affect exit flows from unemployment.
  - Note: no data on outflows from nonemployment more broadly.

### II.A — Main empirical inventory results
- Observation period: 18 years.
- Total counted reforms: almost 414 reforms.

_Italic source attribution: Content drawn from _wp0597 - References (PDF)._

### 1.6 per year and country. However, the changes have often been marginal (388 out 414

### _wp0597 - 1.6 per year and country. However, the changes have often been marginal (388 out 414

### Labor Market Reform Patterns and Stylized Facts
- Average frequency: 1.6 per year and country.
- Total recorded regulatory changes: 414.
- Marginality of reforms: 388 out of 414 (roughly 95 percent) of regulatory changes did not pass the two-stage procedure identifying radical reforms.
- Directional split:
  - Reforms reducing generosity/increasing rewards from participation and reducing protection: 241 out of 414 (about 58 percent).
  - Remaining reforms moved in the opposite direction.
- Temporal patterns:
  - Acceleration of reforms in the last six-year period covered by the data (roughly corresponding to a Parliamentary term).
  - Since 1990, the ratio of marginal to structural reforms has increased.
  - In recent years, on non-employment benefits reforms: 93 out of 120 oriented towards increasing rewards from labor market participation (roughly three reforms out of four).
- Undoing and complexity:
  - It is frequent to find reforms undoing one another over a few years, increasing institutional complexity and labor market dualism (insiders vs outsiders and among types of outsiders).
  - Example: Italy counted 38 different contractual types (expected to increase to 43 with the “Biagi” 2003 reform).

### Reforms and the Macroeconomic Environment (Labor Markets)
- Among reforms that tightened benefits, increased rewards from participation or reduced employment protection: 298 in total (more than one per year and country).
  - Of these, 12 carried out during recessions (negative GDP growth).
  - 59 carried out under slow growth (zero to 2 percent GDP growth).
- When GDP was growing at more than 2 percent per year:
  - 205 politically difficult reforms.
  - 119 politically popular reforms (increasing generosity, adding protections, reducing rewards from participation).
  - Only four politically difficult reforms were radical among those carried out when GDP was growing less than 2 percent per year.
- Interpretation:
  - Negative or slow growth does not prevent reforms in this dataset. Radical/unpopular reforms are difficult under adverse macro conditions, but regulatory changes are more likely to reduce generosity and employment protection when macroeconomic conditions are less favorable.

### Product Market Reforms: Measurement and Patterns
- No inventory of product market reforms existed; proxy-reforms defined as changes in OECD regulatory indicators (yearly time-series).
- Coverage: selected service sectors — airlines, telecoms, electricity, gas, postal services, railways, and road freight — focusing on barriers to entry.
- Classification: grouped per six-year time-periods; orientation (increasing or decreasing competition); scope (radical if step change ≥ one-third of indicator’s potential range, marginal otherwise).
- Key facts:
  - Much fewer reforms moving in opposite directions compared with labor markets; regulatory changes mostly aimed at increasing competition in all industries.
  - Relatively more “discrete” (radical) reforms in product markets than in labor markets.
  - Acceleration of product market reforms mainly in the first half of the 1990s (series available up to 1998).
  - Qualitative evidence: 2002–03 OECD counted nine labor market reforms (and six proposed) versus five product market reforms (and three proposed).
- Concentration and convergence:
  - Product market regulatory changes tend to be more concentrated in periods of strong recovery (Table 4).
  - No clear convergence across countries in degree of liberalization: countries more regulated initially are not necessarily those liberalizing most.

### Interactions Between Labor and Product Market Reforms — Theory and Mechanisms
- Observed pattern: intensification of reform efforts (notably labor market) with little change in OECD aggregate indicators of strictness of employment protection or generosity of unemployment benefits.
- Environmental changes cited as drivers: Single Market Programme progress, reduction of trade barriers, introduction of the euro (effects on capital flows and price transparency).
- Simple model (Bertola and Boeri, 2003) insights:
  - Labor demand: η−=Alw_d where A is productivity, η inverse labor demand elasticity (0<η<1); decrease in η = increase in product market competition.
  - Labor supply: ε l w_s = . (constant-elasticity); ε is labor supply elasticity.
  - Competitive equilibrium: w_d = w_s = A η/(η+ε) and l = A/(η+ε) (equations summarized in text as competitive outcome with zero unemployment).
  - Bilateral monopoly / bargaining: wages include mark-up μ over opportunity cost: w = μ A; μ depends on bargaining power β and elasticities (see equation (5) and definition of μ).
  - Comparative statics:
    - A fall in η (more product market competition) leads in short-run to worse employment outcomes if bargaining-institutions (μ) fixed.
    - Long-run: increased competition fosters labor market reform lowering μ closer to 1 (competitive outcome).
  - Key prediction: increased product market competition simultaneously increases pressures for labor market reform and opposition to it (short-run losers).
- Reverse causality (Blanchard and Giavazzi, 2003):
  - Labor market deregulation (decrease in bargaining power of workers) reduces wages and increases profits short-run; long-run entry of firms increases competition, reduces markups, and can lower unemployment and raise real wages.
  - Labor market deregulation has a short-run redistribution cost for workers but potential longer-run employment gains via increased entry and reduced markups.
  - Partial-sector product market deregulation can create strong opposition from affected workers due to large partial equilibrium losses.

### Political-Economy Strategies for Implementing Reforms
- Four lessons on political feasibility (summarized from Sections IV and V):

  1. Exploit institutional trade-offs
     - UB/EPL trade-off: unemployment benefits (UB) and employment protection legislation (EPL) are substitutable ways to insure against unemployment risk.
     - Empirical correlation: countries with stronger dismissal restrictions tend to have smaller unemployment insurance programs; UB generosity measured as coverage × net replacement rate.
     - Policy implication: reforms of EPL should be paired with state-provided unemployment insurance and active labor market policies (search assistance, subsidized training) to reconcile flexibility and protection.

  2. Unbundling and marginal reforms in labor markets
     - Apply reforms initially to subsets (new entrants, high-skill groups, youngsters, dynamic regions) to build acceptance and gradually extend rules to all.
     - Survey evidence (Fondazione Rodolfo Debenedetti, April 2002, Italy): being aged more than 55 → 20 percent higher probability to favor employment protection; low education → +12 percent; low education interacting with having lost a job → +40 percent.
     - Risks: long transitions can entrench two-tier systems; example: Swedish pension reform spared only 10 percent while Italian transition left 60 percent outside new rules and completes only in 2065.
     - Political feasibility theorem: reforms of employment protection should trade flexibility with unemployment insurance; more favorable when education higher and capital markets deeper.

  3. Product market reforms require radical, not marginal, change
     - Marginal product market reforms (sector-specific, applying only to new entrants) are unsustainable because incumbents can drive away new competitive fringe.
     - Hence, product market reforms need to be radical and comprehensive to be viable and long-lasting.
     - Political difficulty: strong incumbents’ lobbying and limited political mobilization by consumers relative to workers.

  4. Delegation to supranational authorities viable for product markets
     - Delegating reform power (e.g., EU Trade and Competition policy) can help implement product market liberalization and prevent undoing of reforms (Ulysses strategy).
     - Economic rationale: cross-border externalities and fiscal federalism arguments stronger for product markets than for labor/social policies.
     - Not generally viable for labor market reforms given country-specific welfare configurations and advantages of decentralized management.

### Summary of Empirical Tables and Figures (select exact figures preserved)
- Table 1 (Labor Market Reforms: 1985–2003) totals: 414 reforms overall; detailed counts by policy area and period provided in source tables.
- Table 2 (Reforms and GDP growth): totals and averages shown with bracketed average number of reforms per year and country (e.g., total labor market reforms line shows bracketed values such as (0.86), (0.60), (0.32), (0.69), (0.67), (1.00), (0.28), (0.47)).
- Table 3 (Product Market “Reforms” 1985–98): Total per row by industry; overall total 170 (with 97.65 percent decreasing barriers to entry reported).
  - Average per year figures: 5.7 (1985–1990), 16.3 (1991–1996), 19.5 (1997–1998), 0.2, --, 1.5, overall average 12.14.
- Table 4 (Product Markets and GDP Growth): totals by sector and growth category; overall totals shown as 22, 10, 25, 153, 1, 0, 1, 7 with bracketed averages (0.40), (0.42), (0.31), (0.58), (1), --, (1), (0.58).
- Figures and correlations highlighted in text:
  - Figure 2 reports R^2 = 0.2195 for correlation between initial EPL level and EPL reforms 1998–2002.
  - Figure 5 (UB/EPL tradeoff) reports R^2 = 0.5077 and correlation: -0.7126; EU Average and country labels shown in figure.
  - Figure 4 shows trend in ratio of customs and import duties to the value of imports for 1985–2000 with Average-st.dev., Average, Average+st.dev. series.

*Source: _wp0597 (PDF chapter/section content supplied).*

### References

### _wp0597 - References

### Unemployment insurance, matching, and equilibrium unemployment
- Acemoglu, D., and R. J. Shimer, 1998, "Efficient Unemployment Insurance," NBER Working Paper No. W6686 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Hosios, Arthur J., 1990, “On the Efficiency of Matching and Related Models of Search and Unemployment,” Review of Economic Studies, Vol. 57, No. 2, pp. 279–98.
- Pissarides, C., 1990, Equilibrium Unemployment Theory, (Oxford, London: Blackwell Publishing Ltd.).
- Pissarides, C., 2001, “Employment Protection,” Labour Economics 8, pp. 131–59.
- Spilimbergo, A., 1999, “Labor Market Integration, Unemployment, and Transfers,” Review of International Economics, Vol. 7 (4), pp. 641–50 (Oxford, London: Blackwell Publishing Ltd.).
- Blanchard, O., and Philippon, T., 2003, “The Decline of Rents, and The Rise and Fall of European Unemployment,” (unpublished; Cambridge, Massachusetts: National Bureau of Economic Research).

### Employment protection, labor market institutions, and job protection
- Bentolila, S., and J. Dolado, 1993, “Who Are the Insiders?” CEPR Discussion Paper No. 754 (London: Centre for Economic Policy Research).
- Boeri, T., and M. Burda, 2003, "Preferences for Rigid Wages and Job Protection in Equilibrium Unemployment," (unpublished; Milano, Italy: University of Bocconi).
- Boeri, T., and J. Jimeno, 2003, "The Effects of Employment Protection: Learning from Variable Enforcement," CEPR Discussion Paper No. 3926 (London: Centre for Economic Policy Research).
- Boeri, T., J. I. Conde-Ruiz, and V. Galasso, 2003a, "Protecting Against Labour Market Risk: Employment Protection or Unemployment Benefits?" CEPR Discussion Paper No. 3990 (London: Centre for Economic Policy Research).
- Boeri, T., A. Boersch-Supan, and G. Tabellini, 2001, "Would you Like to Shrink the Welfare State? The Opinions of European Citizens," Economic Policy, Vol. 32, pp. 9–50.
- Saint-Paul. G., (2000), The Political Economy of Labour Market Institutions, (Oxford, London: Oxford University Press).
- Dolado, J., C. García-Serrano, and J. F. Jimeno, 2001, “Drawing Lessons from the Boom of Temporary Jobs in Spain,” CEPR Discussion Paper No. 2884, (London: Centre for Economic Policy Research).
- Boeri, T., and J. I. Conde-Ruiz, and V. Galasso, 2004, "Cross-Skill Redistribution and the Tradeoff between Unemployment Benefits and Employment Protection," IZA Discussion Paper No. 1371 (Bonn, Germany: Institute for the Study of Labor).

### Policy complementarities, macroeconomic effects, and regulation
- Coe, D., and D. Snower, 1997, “Policy Complementarities: The Case for Fundamental Labour Market Reform,” CEPR Discussion Paper No.1585 (London: Centre for Economic Policy Research).
- Blanchard, O., and F. Giavazzi, 2003, “Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets,” The Quarterly Journal of Economics, Vol.118(3), pp. 879–907.
- Blanchard, O., 2004, “A Macroeconomic Survey of Europe,” (unpublished; Cambridge, Massachusetts: MIT Press).
- Bertola, G., and T. Boeri, 2003, "Product Market Integrations, Institutions and the Labour Markets,” (unpublished; Italy: European University Institute).
- Nicoletti, G., and S. Scarpetta, 2003, “Regulation, Productivity, and Growth: OECD Evidence,” Economic Policy No. 36 (Paris, France: Organization for Economic Co-operation and Development).

### Product market regulation, indicators, and OECD/EU studies
- Nicoletti, G., S. Scarpetta, and O. Boylaud, 1999, "Summary Indicators of Product Market Regulation and Employment Protection Legislation for the Purpose of International Comparisons,” OECD Economics Department Working Paper No. 226 (Paris, France: Organization for Economic Co-operation and Development).
- OECD, 1994, “The OECD Jobs Study,” (Paris, France: Organization for Economic Co-operation and Development).
- OECD, 1997, “The OECD Report on Regulatory Reform,” (Paris, France: Organization for Economic Co-operation and Development).
- OECD, 1999, “EMU: Facts, Challenges and Policies,” (Paris, France: Organization for Economic Co-operation and Development).
- OECD, 1999a, Employment Outlook, (Paris, France: Organization for Economic Co-operation and Development).
- Buti, M., and A. Sapir (eds.), 1998, Economic Policy in EMU: A Study by the European Commission Services, (Oxford, London: Oxford University Press).
- Aghion, P., and others, 2003, “An Agenda for A Growing Europe Making the Europe Economic System Deliver,” (unpublished; Brussels: European Union).

### European employment experience and labor market integration
- Ljungqvist, L., and T. J. Sargent, 2002, “The European Employment Experience,” CEPR Discussion Paper No. 3543, (London: Centre for Economic Policy Research).
- Boeri, T., and M. Burda, 2003, "Preferences for Rigid Wages and Job Protection in Equilibrium Unemployment," (unpublished; Milano, Italy: University of Bocconi).
- Spilimbergo, A., 1999, “Labor Market Integration, Unemployment, and Transfers,” Review of International Economics, Vol. 7 (4), pp. 641–50 (Oxford, London: Blackwell Publishing Ltd.).

*Source: _wp0597 - References.*

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