Job duration and inequality
Open Access
- 26 February 2020
- journal article
- research article
- Published by Walter de Gruyter GmbH in Economics: The Open-Access, Open-Assessment E-Journal
Abstract
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.Keywords
This publication has 32 references indexed in Scilit:
- Income distribution, credit and fiscal policies in an agent-based Keynesian modelJournal of Economic Dynamics and Control, 2013
- Credit Money and Macroeconomic Instability in the Agent-based Model and Simulator EuraceEconomics: The Open-Access, Open-Assessment E-Journal, 2010
- Trends in U.S. Wage Inequality: Revising the RevisionistsThe Review of Economics and Statistics, 2008
- The disparate labor market impacts of monetary policyJournal of Policy Analysis and Management, 2004
- Temporary jobs, employment protection and labor market performanceLabour Economics, 2002
- Labor Market Rigidities: At the Root of Unemployment in EuropeJournal of Economic Perspectives, 1997
- The Reasons for Wage Rigidity: Evidence from a Survey of FirmsThe Quarterly Journal of Economics, 1997
- Job Security Provisions and EmploymentThe Quarterly Journal of Economics, 1990
- Financial Fragility and Economic PerformanceThe Quarterly Journal of Economics, 1990
- The Cyclical Behavior of the Gross Flows of U.S. WorkersBrookings Papers on Economic Activity, 1990