Policy Complementarities: The Case for Fundamental Labor Market Reform

40 Pages Posted: 15 Feb 2006

See all articles by David T. Coe

David T. Coe

International Monetary Fund (IMF); National Bureau of Economic Research (NBER)

Date Written: August 1996

Abstract

This paper argues that an important group of labor market policies are complementary in the sense that the effect of each policy is greater when implemented in conjunction with the other policies than in isolation. This may explain why the diverse, piecemeal labor market reforms in many European countries in recent years have had so little success in reducing unemployment. What is required instead is deeper labor market reforms across a broader range of complementary policies and institutions. To be politically feasible, these reforms must be combined with measures to address distributional issues.

JEL Classification: E24, J6

Suggested Citation

Coe, David T., Policy Complementarities: The Case for Fundamental Labor Market Reform (August 1996). IMF Working Paper, Vol. , pp. 1-40, 1996. Available at SSRN: https://ssrn.com/abstract=882989

David T. Coe (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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