We quantify the contribution of labor market reforms to unemployment dynamics in nine OECD countries (Australia, France, Germany, Japan, Portugal, Spain, Sweden, UK, US). We estimate a dynamic stochastic search-matching model with heterogeneous workers and aggregate productivity shocks. The heterogeneous-worker mechanism proposed by Robin (2011) explains unemployment volatility by productivity shocks well in all countries. Placement and employment services, UI benefit reduction and product market deregulation are found to be the most prominent policy levers for unemployment reduction. Business cycle shocks and LMPs explain about the same share of unemployment volatility (except for Japan, Portugal and the US).
Authors
Research Fellow Sciences Po and University College London
Jean-Marc is a Research Fellow of the IFS and a Professor of Economics at Sciences Po, Paris, and University College London.
Fabrice Murtin
Journal article details
- DOI
- 10.1016/j.labeco.2016.05.025
- Publisher
- Elsevier
- Issue
- June 2016
Suggested citation
Murtin, F and Robin, J. (2016). 'Labor market reforms and unemployment dynamics' (2016)
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