Labor Market Flexibility and Unemployment: New Empirical Evidence of Static and Dynamic Effects
March 1, 2012
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Summary
The aim of this paper is to analyze the relationship between labor market flexibility and unemployment outcomes. Using a panel of 97 countries from 1985 to 2008, the results of the paper suggest that improvements in labor market flexibility have a statistically and significant negative impact on unemployment outcomes (over unemployment, youth unemployment and long-term unemployment). Among the different labor market flexibility indicators analyzed, hiring and firing regulations and hiring costs are found to have the strongest effect.
Subject: Labor market flexibility, Labor market institutions, Labor markets, Unemployment, Unemployment rate
Keywords: flexibility indicator, unemployment outcome, WP
Pages:
28
Volume:
2012
DOI:
Issue:
064
Series:
Working Paper No. 2012/064
Stock No:
WPIEA2012064
ISBN:
9781463938413
ISSN:
1018-5941
