|
|
|
|
||||
|
||||
Product Market Deregulation and the U.S. Employment MiracleMonique EbellHumboldt University of Berlin - Faculty of Economics Christian HaefkeInstitute for Advanced Studies (IHS); Institute for the Study of Labor (IZA); Instituto de Análisis Económic (IAE) Barcelona January 2006 IZA Discussion Paper No. 1946 Abstract: We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual wage bargaining. Product market competition affects unemployment by two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980's and 1990's could be attributed to product market deregulation. Our quantitative analysis suggests that under individual bargaining, a decrease of less than two-tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount.
Number of Pages in PDF File: 41 Keywords: product market competition, barriers to entry, wage bargaining JEL Classification: E24, J63, L16, O00 working papers seriesDate posted: January 30, 2006Suggested CitationContact Information
|
|
||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.843 seconds
