Labour market reforms and employment hysteresis

• Type: Article in International Scientific Journal
• Date: 2022

Authors

Paulo Ricardo Mota (Author) FEP; vasconcelos, pb (Author) FEP

Journal

Title: Acta Oeconomica

Vol. 72

Pages: 175-194

ISSN: 0001-6373

Publisher: Akademiai Kiado

Indexing

ISI Web of Knowledge - 1 Citation

Scopus - 0 Citations

Other information

Authenticus ID: P-00W-VKY

DOI: 10.1556/032.2022.00010

Abstract (EN): <jats:title>Abstract</jats:title> <jats:p>This paper analyses the effects of deregulation of employment in an environment of low interest rates and economic uncertainty. For this purpose, we estimate a switching employment equation based on the play model of hysteresis. As a novel feature, the estimation allows for a possible change in the value of the switching parameter after the implementation of labour market reforms. We use Portuguese monthly industrial data spanning from January 2000 to October 2016. Portugal provides a good case study since it is a country where significant measures towards the deregulation of the labour market were applied after the recent financial crisis. The results show that these measures reduced the hysteresis effects in the dynamics of aggregate employment except in the period where uncertainty increased substantially, when the opposite happened.</jats:p>

Language: English

Type (Professor's evaluation): Scientific