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How Do Product And Labor Market Regulations Affect Aggregate Employment, Inequalities And Job Polarization? A General Equilibrium Approach

Author

Listed:
  • Julien Albertini

    (HU Berlin - Humboldt-Universität zu Berlin = Humboldt University of Berlin = Université Humboldt de Berlin)

  • Jean-Olivier Hairault

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Francois Langot

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique)

  • Thepthida Sopraseuth

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres)

Abstract

In this paper, we extend our previous analysis (Albertini, Hairault, Langot and Sopraseuth (2015)) along two dimensions. Firstly, we introduce an endogenous number of firms à la Melitz (2003) in order to account for interactions between good and labor markets, and their respective institutions. Secondly, rather than focusing on the historical path of ou prototypical economies as in the previous paper we now want to forecast their future dynamics as spurred by large changes in technology. Hence, for each economy we analyze the transitional dynamics from today to a new world, i.e. the path along which structural technological changes remove the competitive advantages of workers in the middle of the wage distribution, leading them to move to new opportunities at the bottom of the wage distribution. By nature, this phenomenon takes time (searching for a job in a new occupation is time consuming), and it can be blocked if redistributive policies, by increasing the outside option of the poorest, cancel the potential profits of new jobs in the service sector.3 Beyond he comparison of the initial and final steady states, we also solve the transitional dynamics. Further, our paper goes beyond the traditional analysis of PMR and LMIs' effects on labor market outcomes by focusing on their effects on the reallocation from routine to manual tasks.

Suggested Citation

  • Julien Albertini & Jean-Olivier Hairault & Francois Langot & Thepthida Sopraseuth, 2016. "How Do Product And Labor Market Regulations Affect Aggregate Employment, Inequalities And Job Polarization? A General Equilibrium Approach," Working Papers halshs-01374451, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01374451
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01374451
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    Cited by:

    1. Egger, Peter H. & Ehrlich, Maximilian v. & Nelson, Douglas R., 2020. "The trade effects of skilled versus unskilled migration," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 448-464.
    2. Maarek, Paul & Moiteaux, Elliot, 2021. "Polarization, employment and the minimum wage: Evidence from European local labor markets," Labour Economics, Elsevier, vol. 73(C).

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