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Título : Interactions Between Product and Labour Market Reforms
Autor : Seldeslachts, Jo
Palabras clave : Private Interests
Product Market Competition
Interactions between Markets
Unemployment
Fecha de publicación : 9-jul-2002
Serie : UFAE and IAE Working Papers
519.02
Resumen: Labour market reforms face very often opposition from the employed workers, because it normally reduces their wages. Also product market regulations are regularly biased towards too much benefitting the firms. As a result there remain many frictions in both the labour and product markets that hinder an optimal functioning of the economy. These issues have recently received a lot of attention in the economics literature and scholars have been looking for politically viable reforms in both markets. However, despite its potential importance, there has been done virtually no research on the interaction between reforms in product and labour markets. We find that when combining reforms, the opposition for reforms decreases considerably. This is because there exist complementarities and the gains in total welfare can be more evenly distributed over the interest groups. Moreover, the interaction of reforms offers a way out for the so-called 'sclerosis' effect.
URI : http://hdl.handle.net/10261/1874
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