Normal view MARC view ISBD view

FuChen, Yu

Labour-marketInstitutionsand MacroeconomicShocks

Macroeconomicshocksandlabour-marketinstitutionsjointlydetermineemploymentgrowthandeconomicperformance.Theeffectofshocks
dependscnthenatureoftheseinstitutionsandtheelTec tofinstitutionalchange
dependsonthemacroeconomicenvironment.I tfollowsthatagivensetofinstitutionsmaybeappropriatei noneepochandnotinanother.Wederiveadynamic
modeloflabourdemandinwhichtheetTec toffiringcostsonlabourdemand
dependsonthemacroeconomicenvironment:whentheleve lofmacroeconomic
activityisexpectedtodropand/orthetrendrateofproductivitygrowthi ssmall.
arisei nfiringcostsaffectsmainly(andadversely)thehiringdecisionandnotthe
layof fdecision.Thismakesfiringcostsharmfultoemploymentwheni tmayappear
mostappropriate.Incontrast,firingcostscanraiseemploymentduringperiodsof highgrowthandpositiveshocks.Ourhypothesisissupportedbyempiricalresults
usingOE("Ddata.

Subjects--Topical Terms:
Labour Market
MacroeconomicShocks
European Unemployment Problem
OECD