Labor Market Institutions Around the World

By Richard B. Freeman. 2007

222 citations recorded by the source corpus.

The paper documents the large cross-country differences in labor institutions that make them a candidate explanatory factor for the divergent economic performance of countries and reviews what economists have learned about the effects of these institutions on economic outcomes. It identifies three ways in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining, and by increasing information, communication, and trust. The evidence shows that labor institutions reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses in the cross-country data on which most studies focus, the paper argues for increased use of micro-data, simulations, and experiments to illuminate how labor institutions operate and affect outcomes.

Subfields: Economics and Econometrics, Public Administration

View Paper: https://www.semanticscholar.org/paper/968c5516b7ad4d091018c8ceff98a66aec9a7b1b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Public Administration

Citations in the corpus

When more Flexibility Yields more Fragility: the Microfoundations of Keynesian Aggregate Unemployment (2017, background): “And, basically it is also the neo-Keynesian answer, starting as early as the formalization of Keynes’ model by Hicks (1937) and Modigliani (1944) all the way to the generality of contemporary New Keynesian DSGEs (Dynamic Stochastic General Equilibrium models) (Rotemberg and Woodford, 1993 and Blanch”
Trade-based Diffusion of Labor Rights: A Panel Study, 1986–2002 (2009, background): “Taken together, the results for the Labor Laws and Labor Practices models suggest that a California effect operates with respect to the transmission of legal labor rights (de jure rights).”
The Theoretical Foundation of Industrial Relations and its Implications for Labor Economics and Human Resource Management (2010, background): “Indeed, a noticeable “institutional turn” is evident in modern labor economics (Blau and Kahn 1999; Freeman 2008).”
Digital technologies, innovation, and skills: emerging trajectories and challenges (2021, background): “For example, labour compensation (Karabarbounis and Neiman, 2013) and unionization (Freeman, 2007) have declined, but the compensation of top earners has dramatically increased (Atkinson, Piketty, and Saez, 2011), as has firm size (Mueller, Ouimet, and Simintzi, 2017) and industrial concentration…”
China’s 2008 Labor Contract Law: Implementation and implications for China’s workers (2013, background): “…with lower inequality and can carry important benefits for firm performance by increasing communication of information within firms, improving resolution of worker grievances and reducing turnover costs, and even strengthen market outcomes when markets are not functioning well (Freeman, 2007).”