Product market deregulation and the US employment miracle

Arbeitspapier

We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual bargaining. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980's and 1990's could be directly attributed to product market deregulation. Under a traditional calibration, our results suggest that a decrease of less than two-tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount. Under a small surplus calibration, however, product market deregulation can account for the entire decline in US trend unemployment over the 1980's and 1990's.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Reihe Ökonomie / Economics Series ; No. 223

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Labor Turnover; Vacancies; Layoffs ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices ; Economic Development, Innovation, Technological Change, and Growth
• Subject: product market competition ; barriers to entry ; wage bargaining ; Gesamtwirtschaftliche Produktion ; Marktstruktur ; Monopolistischer Wettbewerb ; Deregulierung ; Arbeitsmarkt ; Beschäftigung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ebell, Monique ; Haefke, Christian
• Event: Veröffentlichung
• (who): Institute for Advanced Studies (IHS)
• (where): Vienna
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/72705
• Last update: 10.03.2025, 11:45 AM CET