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Why Labor Market Response Differed in the Great Recession: The Impact of Institutions and Policy

Author

Listed:
  • Karl Aiginger

    (Austrian Institute of Economic Research (WIFO))

  • Thomas Horvath

    (Austrian Institute of Economic Research (WIFO))

  • Helmut Mahringer

    (Austrian Institute of Economic Research (WIFO))

Abstract
This paper investigates the performance of labor markets during the recent crisis for 28 industrialized countries, specifically the reaction of employment and unemployment indicators relative to output changes.We construct a composite indicator for output as well as labor market performance. The determinants of cross-country differences we chose are regulation, flexicurity elements and contracts. We find robust positive impact from labor market regulation, while the impact of flexicurity strategies and contracts are difficult to pin down econometrically. Finally, we venture a tentative look at the ongoing recovery.

Suggested Citation

  • Karl Aiginger & Thomas Horvath & Helmut Mahringer, 2012. "Why Labor Market Response Differed in the Great Recession: The Impact of Institutions and Policy," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 1-19, September.
    • Handle: RePEc:cmn:journl:y:2012:i:3:p:1-19
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    References listed on IDEAS

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    14. Karl Aiginger, 2010. "Post Crisis Policy: Some Reflections of a Keynesian Economist," WIFO Working Papers 371, WIFO.
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    16. AIGINGER Karl, 2011. "Why Performance Differed Across Countries In The Recent Crisis," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 55(2), pages 20-27.
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    20. Howell David R. & Baker Dean & Glyn Andrew & Schmitt John, 2007. "Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence," Capitalism and Society, De Gruyter, vol. 2(1), pages 1-73, May.
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    Cited by:

    1. Thomas Grebel & Mauro Napoletano & Lionel Nesta, 2023. "Distant but Close in Sight: Firm‐level Evidence on French–German Productivity Gaps in Manufacturing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(1), pages 228-261, March.
    2. Christine Erhel & Charlotte Levionnois, 2013. "Labour Market Policies in Times of Crisis: A Comparison of the 1992-1993 and 2008-2010 Recessions," Documents de travail du Centre d'Economie de la Sorbonne 13060, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    3. Karl Aiginger & Kurt Kratena & Margit Schratzenstaller-Altzinger & Teresa Weiss, 2014. "Moving Towards a New Growth Model. WWWforEurope Deliverable No. 3," WIFO Studies, WIFO, number 47247, March.
    4. Rainer Eppel & Ulrike Famira-Mühlberger & Julia Bock-Schappelwein, 2014. "Kennzeichen des österreichischen Arbeitsmarktes im EU-Vergleich," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(11), pages 755-766, November.
    5. Thomas Bredgaard & Per Kongshøj Madsen, 2018. "Farewell flexicurity? Danish flexicurity and the crisis," Transfer: European Review of Labour and Research, , vol. 24(4), pages 375-386, November.
    6. Werner Eichhorst & Tito Boeri & Michela Braga & An de Coen & Galasso Vicenzo & Maarten Gerard & Michael J. Kendzia & Christine Mayrhuber & Jakob Louis Pedersen & Ricarda Schmidl & Nadia Steiber, 2013. "Combining the Entry of Young People in the Labour Market with the Retention of Older Workers," WIFO Studies, WIFO, number 46988, March.
    7. Agata Drobiszová & Zuzana Machová, 2015. "Vliv fiskální politiky na ekonomický růst v zemích OECD [The Impact of Fiscal Policy on Economic Growth in the OECD Countries]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(3), pages 300-316.
    8. Markus Leibrecht & Silvia Rocha-Akis, 2014. "Sozialpartnerschaft und makroökonomische Performance," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 555-567, August.
    9. Christine Erhel & Charlotte Levionnois, 2013. "Labour Market Policies in Times of Crisis: A Comparison of the 1992-1993 and 2008-2010 Recessions," Post-Print halshs-00880933, HAL.
    10. Gurvich, E. & Vakulenko, E., 2018. "Studies of Russian Labor Market and Economic Policy," Journal of the New Economic Association, New Economic Association, vol. 37(1), pages 203-212.
    11. Zuzana Machova & Igor Kotlan, 2014. "Expenditures on Collective and Individual Services: Discussion on the Classification of Government Expenditures with Regard to their Inclusion into Growth Models," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 4, pages 287-296, December.
    12. Thomas Grebel & Mauro Napoletano & Lionel Nesta, 2022. "Distant but Close in Sight: Firm‐level Evidence on French–German Productivity Gaps in Manufacturing," Post-Print hal-04531123, HAL.
    13. Ulrike Huemer, 2018. "Arbeitsmarktbeobachtung anhand des Arbeitsmarktmonitors," WIFO Monatsberichte (monthly reports), WIFO, vol. 91(6), pages 413-425, June.
    14. Fritz Breuss, 2013. "Die Größe der Kleinen in der EU," WIFO Working Papers 452, WIFO.
    15. Christine Erhel & Charlotte Levionnois, 2015. "Labour Market Policies in Times of Crisis: A Reaction Function Approach for the Period 1985–2010," LABOUR, CEIS, vol. 29(2), pages 141-162, June.
    16. Christine Erhel & Charlotte Levionnois, 2013. "Labour Market Policies in Times of Crisis: A Comparison of the 1992-1993 and 2008-2010 Recessions," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00880933, HAL.
    17. Ulrike Famira-Mühlberger & Thomas Leoni, 2014. "Die wirtschaftliche und soziale Lage in Österreich," WIFO Studies, WIFO, number 47475, March.

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