Job duration and inequality

Artikel

As suggested by recent empirical evidence, one of the causes behind the widespread rise of inequality experienced by OECD countries in the last few decades may have been the increased flexibility of labor markets. The authors explore this hypothesis through the analysis of a stock-flow consistent agent-based macroeconomic model able to reproduce with good statistical precision several empirical regularities. They employ three different sensitivity analysis techniques, which indicate that increasing job contract duration (i.e. decreasing flexibility) has the effect of reducing income and wealth inequality. However, the authors also find that this effect is diminished by tight monetary policy and low credit supply. The last result suggests that the final outcome of structural reforms aimed at changing labor flexibility can depend on the macroeconomic environment in which these are implemented.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 14 ; Year: 2020 ; Issue: 2020-9 ; Pages: 1-27 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft ; Statistical Simulation Methods: General ; Computational Techniques; Simulation Modeling ; Personal Income, Wealth, and Their Distributions ; Monetary Policy, Central Banking, and the Supply of Money and Credit: General ; Labor Economics: General ; Labor Contracts
• Subject: Economic inequality ; labor market flexibility ; monetary policy ; agent-based models ; sensitivity analysis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chen, Siyan ; Desiderio, Saul
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2020

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2020-9
• Handle: http://hdl.handle.net/10419/214644
• Last update: 10.03.2025, 11:43 AM CET