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Fiscal adjustments, labour market flexibility and unemployment

Agnello, Luca and Castro, Vítor and Tovar Jalles, João and Sousa, Ricardo M. (2014) Fiscal adjustments, labour market flexibility and unemployment. Economics Letters, 124 (2). pp. 231-235. ISSN 0165-1765

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Identification Number: 10.1016/j.econlet.2014.05.029

Abstract

Using a panel of 17 countries for 1978-2009, we find that tax-driven consolidations increase unemployment by 0.25 percentage points. Labour market flexibility mitigates this: a one-point rise in the flexibility index reduces youth (long-term) unemployment by 0.6-0.7 (1.8-2.2) percentage points.

Item Type: Article
Official URL: http://www.sciencedirect.com/
Additional Information: © 2014 Elsevier B.V.
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets
J - Labor and Demographic Economics > J4 - Particular Labor Markets > J44 - Professional Labor Markets and Occupations
Date Deposited: 08 Jul 2014 11:53
Last Modified: 08 Jul 2014 11:53
URI: http://eprints.lse.ac.uk/id/eprint/57550

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