Paper #433

Title:

Toward a theory of labor market institutions

Author:

Gilles Saint Paul

Date:

November 1999

Abstract:

Standard economic analysis holds that labor market rigidities are harmful for job creation and typically increase unemployment. But many orthodox reforms of the labor market have proved difficult to implement because of political opposition. For these reasons it is important to explain why we observe such regulations. In this paper I outline a theory of how they may arise and why they fit together. This theory is fully developed in a forthcoming book (Saint-Paul (2000)), to which the reader is referred for further details.

Keywords:

Political economy, labor market institutions, unemployment

JEL codes:

D7, E24, E6, H2, J3, J4, J5, J6, K31

Area of Research:

Macroeconomics and International Economics

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