Type
Article
Titre
Centralized Wage Setting and Active Labor Market Policies in Frictional Labor Markets : the Nordic Case
Auteur(s)
VONA Francesco - Observatoire français des conjonctures économiques (Auteur)
ZAMPARELLI Luca - Università degli Studi di Roma "La Sapienza" (Auteur)
Volume
40
Numéro
3
Pages
349 - 364 p.
ISSN
19394632
DOI
10.1057/eej.2013.11
Mots clés
Job destruction, Labor market policies, Numerical anlysis
Résumé
EN
We adopt a standard search and matching model with endogenous job destruction to investigate two issues. First, we use a simplified version of Boeri-Burda to show that at sufficiently low levels of wage share, centralized wage bargaining performs better than decentralized bargaining in terms of average productivity, unemployment, and income inequality. Second, we incorporate active labor market policies in the model and establish that they are more effective in reducing unemployment when wage setting is centralized. Finally, numerical analysis suggests that the difference in effectiveness is sizeable.
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