Labor And Product Market Reforms In Advanced Economies

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Labor and Product Market Reforms in Advanced Economies

Angana Banerji,Mr.Valerio Crispolti,Ms.Era Dabla-Norris,Mr.Romain A Duval,Mr.Christian H Ebeke,Davide Furceri,Mr.Takuji Komatsuzaki,Mr.Tigran Poghosyan
Labor and Product Market Reforms in Advanced Economies Book PDF

Author : Angana Banerji,Mr.Valerio Crispolti,Ms.Era Dabla-Norris,Mr.Romain A Duval,Mr.Christian H Ebeke,Davide Furceri,Mr.Takuji Komatsuzaki,Mr.Tigran Poghosyan
Publisher : International Monetary Fund
Page : 120 pages
File Size : 40,5 Mb
Release : 2017-03-13
Category : Business & Economics
ISBN : 9781475583977

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Labor and Product Market Reforms in Advanced Economies by Angana Banerji,Mr.Valerio Crispolti,Ms.Era Dabla-Norris,Mr.Romain A Duval,Mr.Christian H Ebeke,Davide Furceri,Mr.Takuji Komatsuzaki,Mr.Tigran Poghosyan Pdf

Product and labor market reforms are needed to lift persistently sluggish growth in advanced economies. But reforms have progressed slowly because of concerns about their distributive and short-term economic effects. Our analysis, based on new empirical and numerical analysis and country case-studies shows that most labor and product market reforms can improve public debt dynamics over the medium-term. This because reforms raise output by boosting employment and/or labor productivity. But the effect of some labor market reforms on budgetary outcomes and fiscal sustainability depends critically on business cycle conditions. Our evidence also suggests that some temporary and well-designed up-front fiscal stimulus can help enhance the economic impact of reforms. In the past, countries have used fiscal incentives in the past to facilitate reforms by alleviating transition and social costs. But strong ownership of reforms was crucial for their successful implementation.

Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies

Mr.Romain A Duval,Davide Furceri,João Tovar Jalles
Labor and Product Market Reforms and External Imbalances Evidence from Advanced Economies Book PDF

Author : Mr.Romain A Duval,Davide Furceri,João Tovar Jalles
Publisher : International Monetary Fund
Page : 31 pages
File Size : 52,5 Mb
Release : 2021-02-26
Category : Business & Economics
ISBN : 9781513570747

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Labor and Product Market Reforms and External Imbalances: Evidence from Advanced Economies by Mr.Romain A Duval,Davide Furceri,João Tovar Jalles Pdf

We explore the impact of major labor and product market reforms on current account dynamics using a new “narrative” database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions.

A Narrative Database of Major Labor and Product Market Reforms in Advanced Economies

Mr.Romain A Duval,Davide Furceri,Bingjie Hu,João Tovar Jalles,Huy Nguyen
A Narrative Database of Major Labor and Product Market Reforms in Advanced Economies Book PDF

Author : Mr.Romain A Duval,Davide Furceri,Bingjie Hu,João Tovar Jalles,Huy Nguyen
Publisher : International Monetary Fund
Page : 98 pages
File Size : 55,6 Mb
Release : 2018-01-25
Category : Business & Economics
ISBN : 9781484339299

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A Narrative Database of Major Labor and Product Market Reforms in Advanced Economies by Mr.Romain A Duval,Davide Furceri,Bingjie Hu,João Tovar Jalles,Huy Nguyen Pdf

This paper describes a new database of major labor and product market reforms covering 26 advanced economies over the period 1970-2013. The focus is on large changes in product market regulation in seven individual network industries, employment protection legislation for regular and temporary workers, and the replacement rate and duration of unemployment benefits. The main advantage of this dataset is the precise identification of the nature and date of major reforms, which is valuable in many empirical applications. By contrast, the dataset does not attempt to measure and compare policy settings across countries, and as such is no substitute for other publicly available indicators produced, for example, by the ILO, the OECD or the World Bank. It should also be seen as work in progress, for researchers to build on and improve upon. Based on the dataset, major reforms appear to have been more frequent in product markets than in labor markets in the last decades, and were predominantly implemented during the 1990s and 2000s.

The Needle in the Haystack: What Drives Labor and Product Market Reforms in Advanced Countries?

Mr.Romain A Duval,Davide Furceri,Jakob Miethe
The Needle in the Haystack What Drives Labor and Product Market Reforms in Advanced Countries Book PDF

Author : Mr.Romain A Duval,Davide Furceri,Jakob Miethe
Publisher : International Monetary Fund
Page : 59 pages
File Size : 47,5 Mb
Release : 2018-05-09
Category : Business & Economics
ISBN : 9781484355787

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The Needle in the Haystack: What Drives Labor and Product Market Reforms in Advanced Countries? by Mr.Romain A Duval,Davide Furceri,Jakob Miethe Pdf

The political economy literature has put forward a multitude of hypotheses regarding the drivers of structural reforms, but few, if any, empirically robust findings have emerged thus far. To make progress, we draw a parallel with model uncertainty in the growth literature and provide a new version of the Bayesian averaging of maximum likelihood estimates (BAMLE) technique tailored to binary logit models. Relying on a new database of major past labor and product market reforms in advanced countries, we test a large set of variables for robust correlation with reform in each area. We find widespread support for the crisis-induces-reform hypothesis. Outside pressure increases the likelihood of reform in certain areas: reforms are more likely when other countries also undertake them and when there is formal pressure to implement them. Other robust correlates are more specific to certain areas—for example, international pressure and political factors are most relevant for product market and job protection reforms, respectively.

Structural Reforms

Jakob de Haan,Jante Parlevliet
Structural Reforms Book PDF

Author : Jakob de Haan,Jante Parlevliet
Publisher : Springer
Page : 284 pages
File Size : 50,6 Mb
Release : 2018-03-22
Category : Political Science
ISBN : 9783319744001

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Structural Reforms by Jakob de Haan,Jante Parlevliet Pdf

This book presents a selection of contributions on the timely topic of structural reforms in Western economies, written by experts from central banks, the International Monetary Fund, and leading universities. It includes latest research on the impacts of structural reforms on the market economy, especially on the labor market, and investigates the results of collective bargaining in theory and practice. The book also comprises case studies of structural reforms. A literature survey on the topic serves as a valuable source for further research. The book is written by and targeted at both academics and policy makers.

Can Reform Waves Turn the Tide? Some Case Studies Using the Synthetic Control Method

Bibek Adhikari,Mr.Romain A Duval,Bingjie Hu,Mr.Prakash Loungani
Can Reform Waves Turn the Tide Some Case Studies Using the Synthetic Control Method Book PDF

Author : Bibek Adhikari,Mr.Romain A Duval,Bingjie Hu,Mr.Prakash Loungani
Publisher : International Monetary Fund
Page : 35 pages
File Size : 43,6 Mb
Release : 2016-08-20
Category : Business & Economics
ISBN : 9781475529098

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Can Reform Waves Turn the Tide? Some Case Studies Using the Synthetic Control Method by Bibek Adhikari,Mr.Romain A Duval,Bingjie Hu,Mr.Prakash Loungani Pdf

A number of advanced economies carried out a sequence of extensive reforms of their labor and product markets in the 1990s and early 2000s. Using the Synthetic Control Method (SCM), this paper implements six case studies of well-known waves of reforms, those of New Zealand, Australia, Denmark, Ireland and Netherlands in the 1990s, and the labor market reforms in Germany in the early 2000s. In four of the six cases, GDP per capita was higher than in the control group as a result of the reforms. No difference between the treated country and its synthetic counterpart could be found in the cases of Denmark and New Zealand, which in the latter case may have partly reflected the implementation of reforms under particularly weak macroeconomic conditions. Overall, also factoring in the limitations of the SCM in this context, the results are suggestive of a positive but heterogenous effect of reform waves on GDP per capita.

The New Normal: A Sector-level Perspective on Productivity Trends in Advanced Economies

Ms. Era Dabla-Norris,Mr. Si Guo,Mr. Vikram Haksar,Minsuk Kim,Ms. Kalpana Kochhar,Kevin Wiseman,Aleksandra Zdzienicka
The New Normal A Sector level Perspective on Productivity Trends in Advanced Economies Book PDF

Author : Ms. Era Dabla-Norris,Mr. Si Guo,Mr. Vikram Haksar,Minsuk Kim,Ms. Kalpana Kochhar,Kevin Wiseman,Aleksandra Zdzienicka
Publisher : International Monetary Fund
Page : 58 pages
File Size : 50,5 Mb
Release : 2015-03-18
Category : Business & Economics
ISBN : 9781498345712

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The New Normal: A Sector-level Perspective on Productivity Trends in Advanced Economies by Ms. Era Dabla-Norris,Mr. Si Guo,Mr. Vikram Haksar,Minsuk Kim,Ms. Kalpana Kochhar,Kevin Wiseman,Aleksandra Zdzienicka Pdf

Total factor productivity growth was stagnant or slowing in many advanced countries even prior to the crisis. This paper documents sector-level productivity patterns across advanced economies prior to the crisis and examines the role of product and labor market rigidities as well as innovation and investments in information technology and human capital in driving productivity differences across sectors and countries. Since productivity payoffs of reforms evolve over time, we also focus on large changes in the structural indicators examine their dynamic impact on productivity, employment, and output. Our results suggest that reform priorities depend on country-specific settings, including the scale of specific policy distortions and the distance from the technology frontier. Productivity gains from reforms are large and materialize predominantly in the medium term, with some important variations across industries and countries.

Employment Protection Deregulation and Labor Shares in Advanced Economies

Gabriele Ciminelli,Mr.Romain A Duval,Davide Furceri
Employment Protection Deregulation and Labor Shares in Advanced Economies Book PDF

Author : Gabriele Ciminelli,Mr.Romain A Duval,Davide Furceri
Publisher : International Monetary Fund
Page : 72 pages
File Size : 54,5 Mb
Release : 2018-08-16
Category : Business & Economics
ISBN : 9781484373729

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Employment Protection Deregulation and Labor Shares in Advanced Economies by Gabriele Ciminelli,Mr.Romain A Duval,Davide Furceri Pdf

Labor market deregulation, intended to boost productivity and employment, is one plausible, yet little studied, driver of the decline in labor shares that took place across most advanced economies since the early 1990s. This paper assesses the impact of job protection deregulation in a sample of 26 advanced economies over the period 1970-2015, using a newly constructed dataset of major reforms to employment protection legislation for regular contracts. We apply the local projection method to estimate the dynamic response of the labor share to our reform events at both the country and the country-industry levels. For the latter, we employ a differences-in-differences identification strategy using two identifying assumptions grounded in theory—namely that job protection deregulation should have larger negative effects in industries characterized by (i) a higher “natural” propensity to adjust the workforce, and (ii) a lower elasticity of substitution between capital and labor. We find a statistically significant, economically large and robust negative effect of deregulation on the labor share. In particular, illustrative back-of-the-envelope calculations suggest that job protection deregulation may have contributed about 15 percent to the average labor share decline in advanced economies. Together with existing evidence regarding the macroeconomic gains from job protection and other labor market reforms, our results also point to the need for policymakers to address efficiency-equity trade-offs when designing such reforms.

Product Market Deregulation and Growth

Romain Bouis,Mr.Romain A Duval,Johannes Eugster
Product Market Deregulation and Growth Book PDF

Author : Romain Bouis,Mr.Romain A Duval,Johannes Eugster
Publisher : International Monetary Fund
Page : 26 pages
File Size : 46,6 Mb
Release : 2016-06-09
Category : Business & Economics
ISBN : 9781484385029

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Product Market Deregulation and Growth by Romain Bouis,Mr.Romain A Duval,Johannes Eugster Pdf

The paper investigates the economic effects of major product market reforms in some of the historically most protected non-manufacturing industries. It relies on a unique mapping between new annual data on reform shocks and sector-level outcomes for five network industries (electricity and gas, land transport, air transport, postal services, and telecommunications) in twenty-six countries spanning over three decades. The use of a threedimensional panel and careful instrumentation of reform shocks using external instruments enables us to control for economy-wide macroeconomic shocks and address possible sources of omitted variable bias more broadly. Using a local projection method, we find that major reductions in barriers to entry yield large increases in output and labor productivity over a five-year horizon, concomitant with a relative price decline. By contrast, there is only a weak positive effect on sectoral employment, and investment is essentially unaffected, suggesting that output gains from reform primarily reflect higher total factor productivity. It takes some time for these gains to materialize: effects become statistically significant two to three years after the reform, as prices start dropping, and productivity and output increase significantly. However, there is no evidence of any negative short-term cost from reform, including under weak macroeconomic conditions. These findings provide a clear case for intensifying product market reform efforts in advanced economies at the current juncture of weak growth.

Labor Market Reform Options to Boost Employment in South Africa

Mr. Romain A Duval,Mr. Ippei Shibata
Labor Market Reform Options to Boost Employment in South Africa Book PDF

Author : Mr. Romain A Duval,Mr. Ippei Shibata
Publisher : International Monetary Fund
Page : 39 pages
File Size : 42,6 Mb
Release : 2021-06-11
Category : Business & Economics
ISBN : 9781513584478

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Labor Market Reform Options to Boost Employment in South Africa by Mr. Romain A Duval,Mr. Ippei Shibata Pdf

Raising South Africa’s low employment rate to levels seen in emerging market or advanced economy peers could raise GDP per capita by 50 to 60 percent and reduce income inequality dramatically in the long term. By putting further strain on an already fragile labor market, Covid-19 has raised the urgency of action. This paper reviews labor market policy and other reform options to enhance South Africa’s job market performance, drawing from international evidence and new analysis. We find much scope for improving the design of key labor market institutions—including collective bargaining and employment protection legislation—and active labor market policies to improve job seekers’ prospects. These reforms should come hand-in-hand with others, such as in the areas of education or product market regulation, that may work pay. Labor market and other reforms would primarily benefit disadvantaged groups such as youth.

On the Impact of Structural Reforms on Output and Employment

Luiza Antoun de Almeida,Vybhavi Balasundharam
On the Impact of Structural Reforms on Output and Employment Book PDF

Author : Luiza Antoun de Almeida,Vybhavi Balasundharam
Publisher : International Monetary Fund
Page : 36 pages
File Size : 44,7 Mb
Release : 2018-04-06
Category : Business & Economics
ISBN : 9781484351772

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On the Impact of Structural Reforms on Output and Employment by Luiza Antoun de Almeida,Vybhavi Balasundharam Pdf

This paper analyzes the effects of selected structural reforms on output and employment in the short and medium term. It uses a comprehensive cross-country firm-level dataset covering both advanced and emerging market economies over the period 2003-2014. In line with previous studies, it finds that structural reforms have in general a positive impact on output and employment in the medium term. Furthermore, the paper also assesses whether the impact of structural reforms varies with firm-specific characteristics, such as size, leverage, profitability, and sector. We find evidence that firm characteristics do influence the effectiveness of structural reforms. These findings have relevant policy implications as they help policymakers tailor the design of structural reforms to maximize their payoffs, taking into account their heterogeneous impact on firms.

Structural Reform Packages, Sequencing, and the Informal Economy

Zsuzsa Munkacsi,Mr.Magnus Saxegaard
Structural Reform Packages Sequencing and the Informal Economy Book PDF

Author : Zsuzsa Munkacsi,Mr.Magnus Saxegaard
Publisher : International Monetary Fund
Page : 54 pages
File Size : 51,9 Mb
Release : 2017-05-26
Category : Business & Economics
ISBN : 9781484302101

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Structural Reform Packages, Sequencing, and the Informal Economy by Zsuzsa Munkacsi,Mr.Magnus Saxegaard Pdf

This paper explores the macroeconomic impacts of labor and product market deregulation using a small open-economy model with formal and informal markets. We examine both the long-run effects and the transition towards the post-reform equilibrium, while our main focus are reform packages and sequencing. The unofficial sector is a major determinant of the sign, and, in particular, the magnitude of responses. South Africa, an emerging country, is considered when Bayesian estimating the model. Regarding the long run, both labor and product market reforms considerably increase output, although labor market reforms are more successful in decreasing unemployment. Nevertheless, there are short-term costs, for example, a decrease in household consumption, net exports or output, or a decrease in competition. Combining reforms, especially with product market deregulation, are good at reducing short-term costs. Finally, concerning the speed of adjustment, it is usually better to start with a labor market reform.

Lessons from Successful Labor Market Reformers in Europe

Mr.Anthony Annett
Lessons from Successful Labor Market Reformers in Europe Book PDF

Author : Mr.Anthony Annett
Publisher : International Monetary Fund
Page : 25 pages
File Size : 51,9 Mb
Release : 2007-05-01
Category : Business & Economics
ISBN : 9781451975352

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Lessons from Successful Labor Market Reformers in Europe by Mr.Anthony Annett Pdf

Welfare states can be reformed successfully, and popular support for reforms can be maintained. But this requires an internally consistent package of labor market, fiscal, and product market reforms, including some kind of buy-in, through, for example, tax cuts. Empirical analysis combined with a select number of case studies-comprising Ireland, Denmark, the Netherlands, and the United Kingdom-reveals that successful reformers focused on increasing labor supply through benefit reform, lowering tax wedges, and lowering government consumption. At the same time, greater labor supply translated into employment growth more effectively in the presence of liberal labor and product markets.

Reforming Labor and Product Markets

Tito Boeri
Reforming Labor and Product Markets Book PDF

Author : Tito Boeri
Publisher : International Monetary Fund
Page : 40 pages
File Size : 45,6 Mb
Release : 2005-05
Category : Business & Economics
ISBN : UCSD:31822030952360

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Reforming Labor and Product Markets by Tito Boeri Pdf

This paper evaluates European structural reforms over the last 20 years, in light of economic theory predictions about interactions between labor and product market reforms. Reforms in labor markets occur at higher frequencies than in product market, which are, however, more coherent. These asymmetries can be explained by the nature of political obstacles to reforms in the two domains. Labor market reforms can exploit institutional trade-offs; notably, reforms can trade labor market flexibility with state-provided unemployment insurance and can be applied only to new entrants in the market without affecting the set of regulations applied to existing workers. These two-tier strategies are infeasible in product markets, since incumbent firms can easily drive away new entrants. In product markets, however, it is possible to shift responsibilities to supranational authorities, resisting pressures of national lobbies.

The Short-Term Impact of Product Market Reforms

Peter N. Gal,Alexander Hijzen
The Short Term Impact of Product Market Reforms Book PDF

Author : Peter N. Gal,Alexander Hijzen
Publisher : International Monetary Fund
Page : 71 pages
File Size : 41,5 Mb
Release : 2016-09-22
Category : Business & Economics
ISBN : 9781475539585

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The Short-Term Impact of Product Market Reforms by Peter N. Gal,Alexander Hijzen Pdf

This paper analyzes the effects of product market reforms in the short and medium term across 10 regulated industries and 18 advanced economies for the period 1998-2013 using internationally comparable firm-level data based on Orbis. It provides four key insights. First, product market reforms have positive effects on capital, output and employment and their effects increase over time. After two years, they raise capital by 4%, output by 3% and employment by 1.5%. Second, differences in production technology and the nature of product market regulations across sectors generate important differences in the mechanisms through which reforms operate. In network industries, reforms tend to benefit small firms, while the opposite is observed in retail trade. Product market reforms also promote firm entry, particularly those that reduce entry barriers. Third, credit constraints can play an important role in weakening the positive impact of product market reform on investment. Fourth, product market reforms also tend to have positive effects on firms in downstream sectors—both at home and abroad—that make intensive use of intermediate inputs from deregulated sectors.