Effects of labour market institutions on unemployment and employment creation

Abstract

In this paper, the role played by institutions in labour markets and their effects on labour Qutcomes are presented. The results show that, first, the flexible and rigid labour market models do not exit, instead, there are intermediate labour market models. Second, many features of the labour market, usually viewed as serious rigidities, have slight impact on unemployment. And finally, a wide range of Labour market institutions have cumulative effects on unemployment and employment creation, wich can be amplified under specific combination of institutions.