Vona, Francesco and Zamparelli, Luca (2010): Centralized wage setting and labor market policies: the nordic model case.
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It is often argued that rigid labour market and centralized bargaining are harmful employment and growth. This paper looks at the case of Nordic countries as a counter-example pointing to some weaknesses of this view. Rigid labour markets, while reducing the offer of low quality jobs, increase average labor productivity by favoring job relocation in high quality jobs. Moene and Wallerstein (1997) adopted a vintage-capital model to compare centralized and decentralized bargaining: they show that centralized bargaining systems yield higher labor productivity and higher structural unemployment. By introducing a frictional labor market in the vintage-capital framework , we show that the negative effects on employment characterizing centralized bargaining can be reduced by adopting active labor market policy. Keywords: Centralized wage setting, structural change, labor market policy, frictional unemployment
|Item Type:||MPRA Paper|
|Original Title:||Centralized wage setting and labor market policies: the nordic model case|
|Keywords:||Centralized wage setting; structural change; labor market policy; frictional unemployment|
|Subjects:||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J60 - General
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
|Depositing User:||Luca Zamparelli|
|Date Deposited:||19. Mar 2010 22:39|
|Last Modified:||19. Feb 2013 20:55|
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