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The role of product market regulation in the process of structural change (2003)
| Venue: | European Central Bank, Working Paper Series |
| Citations: | 47 - 0 self |
BibTeX
@INPROCEEDINGS{Messina03therole,
author = {Julián Messina},
title = {The role of product market regulation in the process of structural change},
booktitle = {European Central Bank, Working Paper Series},
year = {2003},
pages = {217}
}
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Abstract
The sectoral allocation of labor differs considerably across developed economies, even in the presence of similar patterns of structural change. A general equilibrium model that captures the stylized facts of structural change is presented. In this framework, economy-wide product market regulations hinder the development of dynamic sectors such as service industries. This is consistent with the negative cross-country relation-ship between product market regulations and the service employment share discussed in the paper. Additionally, the model suggests that higher service prices and rents in regulated economies reduce labor supply, providing a rationale for the negative associa-tion between product market regulations and the employment rate previously found in the literature.
Keyphrases
structural change product market regulation employment rate similar pattern service price negative associa-tion stylized fact service employment share service industry economy-wide product market regulation labor differs sectoral allocation labor supply general equilibrium model negative cross-country relation-ship regulated economy dynamic sector
