Tuesday, October 9, 2012

The sun also rises in the east

Not exactly 'stop the presses' material, but Elke Jahn, Regina Riphahn, and Claus Schnabl write up their results nonetheless;
Our cross-country analysis indicates that in countries with flexible labour markets, overall employment and productivity tend to be higher but the distribution of household incomes is less equal than in countries with strictly regulated labour markets. This suggests that there may be a trade-off between equity and efficiency when dual labour markets are supported. Temporary employment can thus be both a boon and a bane to the labour market and to society as a whole. It remains an open question whether the gains from enhanced labour market flexibility outweigh the costs.
Open question to whom?  Isn't virtually all the movement of people from countries with tightly regulated labor markets, toward countries that are more open? That would seem to be a rather telling indicator.

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