Can institutional reform reduce job destruction and unemployment duration? : yes it can /

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Bibliographic Details
Author / Creator:	Pérez, Esther (Pérez-Ruiz), author.
Imprint:	[Washington, D.C.] : International Monetary Fund, ©2012.
Description:	1 online resource (25 pages) : illustrations
Language:	English
Series:	IMF working paper ; WP/12/54 IMF working paper ; WP/12/54.
Subject:	Unemployment -- Econometric models. Labor market -- Econometric models. Labor market -- Econometric models. Unemployment -- Econometric models.
Format:	E-Resource Book
URL for this record:	http://pi.lib.uchicago.edu/1001/cat/bib/12500074

Hidden Bibliographic Details
Other authors / contributors:	Yao, Yao, 1970- author. International Monetary Fund. European Department, issuing body.
Notes:	At head of title: European Department. Title from PDF title page (IMF Web site, viewed February 23, 2012). "February 2012." Includes bibliographical references.
Summary:	We read search theory's unemployment equilibrium condition as an Iso-Unemployment Curve(IUC). The IUC is the locus of job destruction rates and expected unemployment durations rendering the same unemployment level. A country's position along the curve reveals its preferences over the destruction-duration mix, while its distance from the origin indicates the unemployment level at which such preferences are satisfied Using a panel of 20 OECD countries over 1985-2008, we find employment protection legislation to have opposing effects on destructions and durations, while the effects of the remaining key institutional factors on both variables tend to reinforce each other. Implementing the right reforms could reduce job destruction rates by about 0.05 to 0.25 percentage points and shorten unemployment spells by around 10 to 60 days. Consistent with this, unemployment rates would decline by between 0.75 and 5.5 percentage points, depending on a country's starting position.

Table of Contents:

Cover; Contents; 1 Introduction; 2 Inflows and Durations: The Facts; 3 The Model; 3.1 Equations; List of Figures; 1 Unemployment Duration and Job Destruction Rates in 20 OECD Countries, 1965-1989; 2 Unemployment Duration and Job Destruction Rates in 20 OECD Countries, 1990-2009; 3.2 Model's predictions; 3 Model's predictions; 4 Estimating the Model; 4.1 Data and Empirical Strategy; 4.2 Results; List of Tables; 1 Regression Results; 4.3 Policy Implications from Some Illustrative Simulations; 4 Job Destruction Rates and Unemployment Duration: Baseline Projections.
5 Reform Impact on Job Destruction Rates and Unemployment Duration6 Combined Reform Impact on Unemployment Rates; 5 Conclusions; 6 Appendix: Measuring Job Destruction and Unemployment Durations; References.

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