Title
The impact of labor market deregulation on productivity: A panel data analysis of 19 OECD countries (1960-2004)
Author
Vergeer, R.
Kleinknecht, A.
TNO Kwaliteit van Leven
Publication year
2010
Abstract
Mainstream economists argue that unemployment can be reduced by deregulation of labor markets, that is, by easier firing, reduction of minimum wages and social benefits, and so forth. Our panel data analysis shows that wage-cost saving flexibilization of labor markets has a negative impact on labor productivity growth. A one percentage point change in growth rates of real wages leads to a change in labor productivity growth by 0.31-0.39 percentage points. This cannot solely be explained by hiring low-productive labor. Flexibilization of labor markets leads to a labor-intensive growth path that is problematic with an aging population in Europe. © 2011 M.E. Sharpe, Inc.
Subject
Workplace
Arbeidsparticipatie
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TNO identifier
430887
Source
Journal of Post Keynesian Economics, 33 (2), 371-407
Document type
article