Policy Complementarities: The Case for Fundamental Labor Market Reform

Author/Editor:

Dennis J. Snower ; David T. Coe

Publication Date:

August 1, 1996

Disclaimer: This Working 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:

This paper argues that an important group of labor market policies are complementary in the sense that the effect of each policy is greater when implemented in conjunction with the other policies than in isolation. This may explain why the diverse, piecemeal labor market reforms in many European countries in recent years have had so little success in reducing unemployment. What is required instead is deeper labor market reforms across a broader range of complementary policies and institutions. To be politically feasible, these reforms must be combined with measures to address distributional issues.

Series:

Working Paper No. 1996/093

Subject:

Expenditure Labor Labor markets Unemployment Unemployment benefits Unemployment rate Wages

Notes:

Also published in Staff Papers, Vol. 44, No. 1, March 1997.

English

Publication Date:

August 1, 1996

ISBN/ISSN:

9781451951257/1018-5941

Stock No:

WPIEA0931996

Pages:

40

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