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On the complementarity between labour market regulation and tax reforms in the European Union

Martelli, Angelo ORCID: 0009-0004-1637-1620, Campos, Nauro F., Ganslmeier, Michael, Ji, Yuemei and Saka, Orkun (2020) On the complementarity between labour market regulation and tax reforms in the European Union. In: Campos, Nauro F., De Grauwe, Paul and Ji, Yuemei, (eds.) Economic Growth and Structural Reforms in Europe. Cambridge University Press, Cambridge, UK, 280 - 314. ISBN 9781108479110

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Identification Number: 10.1017/9781108782517.012


One reason the effects of individual structural reforms are notoriously difficult to capture is the possibility that they depend upon other reforms and institutions. This chapter studies whether and to what extent reforms in labour market regulation are complementary to tax changes in increasing employment in the European Union (EU). We use a dynamic model of employment growth to estimate and try to disentangle the individual effects from the combined effects of these reforms using a yearly panel of EU countries from 1990 to 2015. Our estimates suggest that reform complementarity between labour market policy and taxation, through substantial and significant interaction effects, seems key to foster employment growth and enhance the effectiveness of both reforms.

Item Type: Book Section
Official URL:
Additional Information: © 2020 Cambridge University Press
Divisions: European Institute
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HG Finance
J Political Science > JN Political institutions (Europe)
Date Deposited: 26 May 2022 10:42
Last Modified: 16 May 2024 05:57

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