Working Paper: CEPR ID: DP9707
Authors: Giuseppe Bertola
Abstract: This paper studies theoretically and empirically why and how labor policies may reduce productivity and employment in order to stabilize labor incomes and redistribute resources. It proposes a specific stylized model where the tradeoffs facing labor policies are influenced by structural factors, inspects the empirical relevance of this mechanism in European data, and outlines the proposed theoretical perspective's implications for reform design in crisis-hit economies.
Keywords: inequality; productivity; structural reforms
JEL Codes: D310; J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Labor policies (J88) | Reductions in productivity (O49) |
| Labor policies (J88) | Reductions in employment (J63) |
| Labor policies (J88) | Stabilizing labor incomes (J89) |
| Labor policies (J88) | Decreased marginal productivity of labor (J29) |
| Decreased marginal productivity of labor (J29) | Affects incentives to invest in human capital (J24) |
| Labor policies (J88) | Lower overall productivity (D24) |
| Various structural factors (L16) | Relationship between labor policies and productivity (J08) |
| Historical policy choices (E65) | Asymmetric developments in productivity (O49) |
| International market pressures (F69) | Relationship between labor policies and productivity (J08) |
| Demographic changes (J11) | Relationship between labor policies and productivity (J08) |