Paper #726
- Título:
- Product market deregulation and labor market outcomes
- Autores:
- Monique Ebell y Christian Haefke
- Data:
- Diciembre 2002
- Resumen:
- We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a Mortensen-Pissarides model with monopolistic competition in the goods market and individual wage bargaining. Product market competition affects unemployment via two channels: the output expansion effect and a countervailing effect due to a hiring externality. Competition is then linked to barriers to entry. A calibrated model compares a high-regulation European regime to a low-regulation Anglo-American one. Our quantitative analysis suggests that under individual bargaining, no more than half a percentage point of European unemployment rates can be attributed to entry regulation.
- Palabras clave:
- Product market competition, barriers to entry, wage bargaining, European Unemployment Puzzle
- Códigos JEL:
- E24, J63, L16, O00
- Área de investigación:
- Macroeconomía y Economía Internacional
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