Employment Protection Deregulation and Labor Shares in Advanced Economies

Abstract

Cover -- Contents -- Abstract -- I. Introduction -- II. Theoretical Framework -- A. Competitive Labor Market -- B. Bargaining Under the Right-to-Manage Model -- C. Efficient Bargaining -- D. Implications for the Empirical Analysis -- III. Dataset -- A. Employment Protection Legislation Reforms -- B. Layoff Rates -- C. Elasticities of Substitution -- D. Labor Share and Other Data -- E. Stylized Facts -- IV. Econometric Framework -- V. Baseline Results and Robustness Checks -- A. Country-level Analysis -- B. Country-industry Level Analysis -- VI. Extensions -- A. Channels -- B. EOS Above Versus Below 1 -- C. Back-of-the Envelope Calculation of the Contribution of Job Protection Deregulation to the Overall Decline in Labor Shares -- VII. Conclusion -- VIII. References -- Figures -- 1. Cumulative Changes in Country Labor Shares Around Reform Years -- 2. Cumulative Changes in Industry Labor Shares Around Reform Years by Industry -- 3. Country-level Analysis-Baseline Results -- 4. Country-industry-level Analysis-Baseline Results -- 5. Country-industry-level Analysis: Robustness to Excluding Individual Countries -- 6. Country-industry-level Analysis: Robustness to Excluding Individual Industries -- Tables -- 1. Country-level Analysis: Robustness Checks -- 2. Country-industry-level Analysis: Robustness Checks on Lag Specification -- 3. Country-industry-level Analysis: Robustness Checks on Sample Composition -- 4. Country-industry Analysis: Robustness Checks on the Layoff Rates -- 5. Country-industry Analysis: Robustness Checks on the Elasticities of Substitution -- 6. Country-industry-level Analysis: Robustness Checks on Potential Omitted -- 7. Country-industry-level Analysis: Extension on Labor Share Drivers -- 8. Country-industry-level Analysis: Extension on Sample Split According to Elasticity of -- Appendixes -- 1. Dataset of Reforms.