Labour and Product Market Reforms: A Case for Policy Complementarity

32 Pages Posted: 14 Jul 2004

See all articles by Bruno Amable

Bruno Amable

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Université Paris I Panthéon-Sorbonne

Donatella Gatti

Paris School of Economics (PSE); PSE; IZA Institute of Labor Economics

Date Written: June 2004

Abstract

This paper is a contribution to the debate on policy complementarity in relation to deregulation in the product and labour markets. We develop a model of dynamic efficiency wages and monopolistic competition. Whereas most of the literature points toward the gains associated to an increase in product market competition coupled with an increased flexibility of the labour market, we show that even when more product market competition is the policy recommendation, it should be accompanied by an increase in job security.

Keywords: policy complementarity, job protection legislation, efficiency wage, imperfect competition

JEL Classification: E24, J41, J63, L13

Suggested Citation

Amable, Bruno and Amable, Bruno and Gatti, Donatella and Gatti, Donatella, Labour and Product Market Reforms: A Case for Policy Complementarity (June 2004). Available at SSRN: https://ssrn.com/abstract=564565 or http://dx.doi.org/10.2139/ssrn.564565

Bruno Amable

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
48 boulevard Jourdan
Paris, 75014
France

Université Paris I Panthéon-Sorbonne ( email )

17, rue de la Sorbonne
Paris, IL 75005
France

Donatella Gatti (Contact Author)

PSE ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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