What Have We Learned? Assessing Labor Market Institutions and Indicators

40 Pages Posted: 3 Nov 2008

See all articles by Werner Eichhorst

Werner Eichhorst

Institute for the Study of Labor (IZA)

Michael T. Feil

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Christoph Braun

University of Dortmund - Ruhr Graduate School in Economics

Abstract

Over the last decade, both the availability of quantitative indicators on labor market institutions and of studies trying to explain differences in national labor market performance through institutional variables have burgeoned significantly. It is now time to review these indicators and the empirical findings. Therefore, this paper has a threefold objective: first, we provide an overview of the aggregate indicators of core labor market institutions such as employment protection, the generosity of the benefit system, active labor market policies, taxation and collective bargaining. We assess the reliability of selected indicators. Second, we review the most relevant macro-econometric studies that made use of these indicators in order to explain diverging patterns of national employment performance. Third, and finally, this paper draws some preliminary conclusions regarding the further development of aggregate indicators and possible directions for future empirical research.

Keywords: labor market institutions, labor market performance, macro-economics

JEL Classification: J60, J68, J21

Suggested Citation

Eichhorst, Werner and Feil, Michael T. and Braun, Christoph, What Have We Learned? Assessing Labor Market Institutions and Indicators. IZA Discussion Paper No. 3470, Available at SSRN: https://ssrn.com/abstract=1294553 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Werner Eichhorst (Contact Author)

Institute for the Study of Labor (IZA) ( email )

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

Michael T. Feil

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Christoph Braun

University of Dortmund - Ruhr Graduate School in Economics ( email )

Dortmund, 44221
Germany

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