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Labor and Product Market Deregulation: Partial, Sequential, or Simultaneous Reform?
Author/Editor: Helge Berger, Stephan Danninger
Release Date: © December, 2005
ISBN : 978-1-45186-246-1
Stock #: WPIEA2005227
Stock Status: Available
Languages and formats available
This study explores the effects of labor and product market deregulation on employment growth. Our empirical results, based on an OECD country panel from 1990-2004, suggest that lower levels of product and labor market regulation foster employment growth, including through sizable interaction effects. Based on these findings, the paper develops a theoretical framework for evaluating deregulation strategies in the presence of reform costs. Optimal deregulation takes various forms depending on the deregulation costs, the strength of reform interactions, and the perspective of the policymaker. Unless deregulation costs are very asymmetric across markets, optimal deregulation requires some form of coordination.
More publications in this series: Working Papers