Labor Market Institutions and Their Effect on Labor Market Performance in OECD and European Countries
The aim of this technical note is to shed some light on relationship between labor market institutions and labor market outcomes in the member states of the Organization of Economic Cooperation and Development (OECD) in North America and East Asia;...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/04/26228710/labor-market-institutions-effect-labor-market-performance-oecd-european-countries http://hdl.handle.net/10986/24494 |
| Summary: | The aim of this technical note is to
shed some light on relationship between labor market
institutions and labor market outcomes in the member states
of the Organization of Economic Cooperation and Development
(OECD) in North America and East Asia; the New Member States
of the European Union who are not members of the OECD (e.g.
the Baltic states); countries in the European “Neighborhood”
with aspire to accede to the EU (e.g. countries in the
Western Balkans); and other European transitions countries
(e.g. Ukraine, Moldova, and the Caucasus). Several
estimation approaches for different data samples and
explanatory variables were used to analyze the impact of
labor market institutions on the labor market outcomes in
European and OECD countries. This technical note,
nevertheless, analyzes the impact of labor market
institutions in above-mentioned regions and finds that they
do affect major labor market indicators. The results show
that the minimum wage tends to increase unemployment in
non-European OECD sample, which is in accordance with the
text-book pricing out effect. To examine the potential
differences in the role of explanatory variables between the
two OECD sub-samples the author applied modified Chow
tests.The results of applied Chow tests examining the
potential differences in the role of explanatory variables
between the particular sub-samples are inconclusive.
Generally, the author was not able to reject the hypothesis
of stability of regression coefficients between the examined
groups of countries in all tested models. While some of the
estimated coefficients suggest different behavior, the
available data did not allow to study this issue in detail. |
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