Labor market flexibility and unemployment: new empirical evidence of static and dynamic effects
Bernal-Verdugo, Lorenzo E. ; Furceri, Davide ; Guillaume, Dominique
IMF - Washington, DC
2012
27 p.
economic recession ; labour market flexibility ; labour market reform ; statistics ; unemployment
IMF Working Paper
64
Labour market
English
Bibliogr.
"The aim of this paper is to analyze the relationship between labor market flexibility and unemployment outcomes. Using a panel of 97 countries from 1985 to 2008, the results of the paper suggest that improvements in labor market flexibility have a statistically and significant negative impact on unemployment outcomes (over unemployment, youth unemployment and long-term unemployment). Among the different labor market flexibility indicators analyzed, hiring and firing regulations and hiring costs are found to have the strongest effect."
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