| Title | How do corporatist and liberal labour markets differ, and what does it mean for economic policy? |
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| Author | Sturn, Simon |
| Published on | 31 Dec 2014 |
| Published by | Der Öffentliche Sektor - The Public Sector | Published in | Volume 40 • Issue 3/4 • 2014 , pages 47-53 |
| AC | AC11360366 |
| DOI | 10.34749/oes.2014.501 |
| URN | urn:nbn:at:at-ubtuw:4-501 |
| Download | How do corporatist and liberal labour markets differ, and what does it mean for economic policy? [563.2 KB] |
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How do labour market institutions affect unemployment? Whereas some empirical studies find that mainly such institutions explain unemployment, others argue that this correlation is not robust. By means of a survey of the literature I provide evidence that one explanation for these contradictory results is that labour market institutions affect unemployment differently within distinct labour market regimes. Because of institutional complementarities and a trade-off between external and internal flexibility, certain labour market institutions yield distinct impacts on unemployment within labour markets characterized by a high degree of corporatism, good labour relations, and high internal flexibility. Thus it is crucial for policymakers to take institutional complementarities into account when reforming the labour market.
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