Exploring Labor Market Institutions: A Political Economy Analysis

CEPR Discussion Paper Series No. 1438

Posted: 11 Sep 1996

See all articles by Gilles Saint-Paul

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: June 1996

Abstract

In this paper, we argue that many of the rigidities that characterize European labor markets can be understood as the outcome of political influence by incumbent employees. We then empirically investigate the determinants of labor market institutions and show that the results are consistent with this view. Among other things, we find that higher exposure of the employed to unemployment facilitates a reduction of the level of employment protection, that unemployment benefits are lower the more employment reacts to wages and that a higher level of unemployment and a right-wing government slow down the growth rate of the minimum wage.

JEL Classification: E24, H53, J6

Suggested Citation

Saint-Paul, Gilles, Exploring Labor Market Institutions: A Political Economy Analysis (June 1996). CEPR Discussion Paper Series No. 1438. Available at SSRN: https://ssrn.com/abstract=3308

Gilles Saint-Paul (Contact Author)

University of Toulouse I - GREMAQ-IDEI ( email )

Manufacture des Tabacs
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Centre for Economic Policy Research (CEPR)

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CESifo (Center for Economic Studies and Ifo Institute)

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Germany

IZA Institute of Labor Economics

P.O. Box 7240
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