Labor market institutions around the world
By: Richard B. Freeman.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- no. 13242.; Working paper series (National Bureau of Economic Research) -- working paper no. 13242.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 35
Subjects: Labor market; Economic development; Income distribution
Description: The paper documents the large cross-country differences in labor institutions that make them a candidate explanatory factor for the divergent economic performance of countries and reviews what economists have learned about the effects of these institutions on economic outcomes. It identifies three ways in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining, and by increasing information, communication, and trust. The evidence shows that labor institutions reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses in the cross-country data on which most studies focus, the paper argues for increased use of micro-data, simulations, and experiments to illuminate how labor institutions operate and affect outcomes.
Notes: "July 2007"

Includes bibliographical references (p. 30-35).

Also available in PDF from the NBER world wide web site (www.nber.org).