Labour Market Institutions and Labour Market Performance: A Survey of the Literature

European Commission Economic Paper No. 238

39 Pages Posted: 19 Dec 2005

See all articles by Alfonso Arpaia

Alfonso Arpaia

European Commission, Directorate General for Economic and Financial Affairs

Gilles Mourre

European Union - European Commission

Date Written: December 2005

Abstract

This paper presents a selective survey of the recent literature on labour market institutions. It describes the different empirical approaches used to explore the nexus between labour market institutions and labour market performance. It stresses that the effect of institutions is complex in both stock and flow models and that it is also crucial to take into account the interactions they generate among themselves and with macroeconomic shocks. While their importance in explaining labour market performances is uncontroversial, there is no full consensus on their actual impact and the precise transmission channels. In addition, rather than taking institutions for granted, a new branch of research attempts to understand them as the result of an endogenous process. The paper also briefly discusses the relationships between the efficiency of the redistributive policies (via taxation) and the type of protection provided (on the job or in the market). Lastly, the paper examines the key issue of efficient policy design both at the macro- and micro-level.

Keywords: Labour market institutions, Labour Market performance, Endogenous institutions, Labour market reforms

JEL Classification: J3, J5, J6

Suggested Citation

Arpaia, Alfonso and Mourre, Gilles, Labour Market Institutions and Labour Market Performance: A Survey of the Literature (December 2005). European Commission Economic Paper No. 238, Available at SSRN: https://ssrn.com/abstract=871093 or http://dx.doi.org/10.2139/ssrn.871093

Alfonso Arpaia (Contact Author)

European Commission, Directorate General for Economic and Financial Affairs ( email )

BU-1 05/190
Brussels, Bruxelles B-1049
Belgium

HOME PAGE: http://europa.eu.int/comm/economy_finance/index_en.htm

Gilles Mourre

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
382
Abstract Views
1,498
rank
94,571
PlumX Metrics