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Labour market reforms since the crisis drivers and consequences

Author

Listed:
  • Adascalitei, Dragos.
  • Pignatti, Clemente.

Abstract

The paper analyses the determinants and effects of reforms of employment protection legislation (EPL), using a novel inventory that covers 111 developed and developing countries between 2008 and 2014. The analysis finds that in developed economies, reforms were mostly directed towards relaxing labour regulation and were driven by high unemployment rates and low levels of GDP growth. By contrast, in developing economies reforms tended to increase workers’ protection and were more likely to occur in countries experiencing high levels of GDP growth – while not being sensitive to unemployment rates. Furthermore, we test the effects of these reforms on labour market outcomes. We find that deregulation decreases employment rates in both developed and developing countries in the year after implementation. Deregulation also increases unemployment rates in developed economies in the short-term; but the effect is not statistically significant in developing countries.

Suggested Citation

  • Adascalitei, Dragos. & Pignatti, Clemente., 2015. "Labour market reforms since the crisis drivers and consequences," ILO Working Papers 994889613402676, International Labour Organization.
    • Handle: RePEc:ilo:ilowps:994889613402676
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    Citations

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    Cited by:

    1. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2017. "When more flexibility yields more fragility: The microfoundations of Keynesian aggregate unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 162-186.
    2. Giovanni Dosi & Marcelo C. Pereira & Andrea Roventini & Maria Enrica Virgillito, 2016. "The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model," LEM Papers Series 2016/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Lorenza Antonucci & Carlo D’Ippoliti & Laszlo Horvath & André Krouwel, 2023. "What’s Work Got to Do with It? How Precarity Influences Radical Party Support in France and the Netherlands," Sociological Research Online, , vol. 28(1), pages 110-131, March.
    4. Dragos Adascalitei & Sameer Khatiwada & Miguel Á. Malo & Pignatti Moran, 2015. "Employment protection and collective bargaining during the great recession: a comprehensive review of international evidence," Revista de Economía Laboral - Spanish Journal of Labour Economics, Asociación Española de Economía Laboral - AEET, vol. 12, pages 50-87.
    5. Liotti, Giorgio, 2020. "Labour market flexibility, economic crisis and youth unemployment in Italy," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 150-162.
    6. L. Matraeva & E. Vasiutina & S. Erokhin & O. Kaurova, 2018. "A Dynamic Model in the Labor Market: Reasons of Imbalances at the Transition Stage of the Economy," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 206-217.
    7. repec:spo:wpmain:info:hdl:2441/50jd34uldo9jioklc7b0dpu4ej is not listed on IDEAS
    8. Brancaccio, Emiliano & Garbellini, Nadia & Giammetti, Raffaele, 2018. "Structural labour market reforms, GDP growth and the functional distribution of income," Structural Change and Economic Dynamics, Elsevier, vol. 44(C), pages 34-45.
    9. Agénor, Pierre-Richard & Lim, King Yoong, 2018. "Unemployment, growth and welfare effects of labor market reforms," Journal of Macroeconomics, Elsevier, vol. 58(C), pages 19-38.
    10. Chiliatto-Leite, Marcos Vinicius, 2017. "Densidade de contribuição na previdência social do Brasil," Estudios y Perspectivas – Oficina de la CEPAL en Brasilia 42728, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    11. Mr. Antonio David & Frederic Lambert & Mr. Frederik G Toscani, 2019. "More Work to Do? Taking Stock of Latin American Labor Markets," IMF Working Papers 2019/055, International Monetary Fund.
    12. Giovanni Dosi & Marcelo C. Pereira & Andrea Roventini & Maria Enrica Virgillito, 2016. "The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model," LEM Papers Series 2016/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    13. Flavio Calvino & Maria Enrica Virgillito, 2018. "The Innovation†Employment Nexus: A Critical Survey Of Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(1), pages 83-117, February.
    14. repec:hal:spmain:info:hdl:2441/3kbkotqp1b85pa2lu2puri38p6 is not listed on IDEAS
    15. repec:spo:wpmain:info:hdl:2441/9d007rc2q9huruni0kde2vr73 is not listed on IDEAS
    16. repec:hal:spmain:info:hdl:2441/9d007rc2q9huruni0kde2vr73 is not listed on IDEAS
    17. repec:hal:spmain:info:hdl:2441/50jd34uldo9jioklc7b0dpu4ej is not listed on IDEAS

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