Policy Complementarities: The Case for Fundamental Labor Market Reform
August 1, 1996
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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.
Subject: Expenditure, Labor, Labor markets, Unemployment, Unemployment benefits, Unemployment rate, Wages
Keywords: equilibrium equation, Europe, labor market, labor market equilibrium, Labor markets, negative income tax, policy complementarity, replacement ratio, skilled worker, UB system, Unemployment, unemployment benefit reform, unemployment benefit replacement, Unemployment benefits, unemployment effect, unemployment equilibrium, unemployment equilibrium equation, unemployment policy, Unemployment rate, unemployment-reducing policy, Wages, WP
Pages:
40
Volume:
1996
DOI:
Issue:
093
Series:
Working Paper No. 1996/093
Stock No:
WPIEA0931996
ISBN:
9781451951257
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 44, No. 1, March 1997.
