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Published VersionCC BY V4.0, Open Access
Journal article
Labour Market Flexibility and Long-Run Growth in Developed Economies
Economic Analysis Letters, Vol.3(4), pp.23-33
2024
Abstract
We examine the relationship between labour market flexibility, as measured by employment protection legislation (EPL), and long-term economic growth in developed economies from 1995 to 2022. We consider conflicting viewpoints on whether rigid labour market regulations hinder or promote economic growth. Employing a cross-country regression model, controlling for factors including initial GDP per capita, capital formation, human capital, research and development, and indicators of macroeconomic performance, we find that only initial income level and capital formation significantly influence long-run growth in real per capita GDP. EPL has no significant impact in the long run, challenging the pre-2000 advocacy of labour market deregulation by major international organisations. We conclude that policy should focus on supporting the investment decisions of the private sector without distorting market mechanisms.
Details
- Title
- Labour Market Flexibility and Long-Run Growth in Developed Economies
- Authors
- Raffaella Belloni - University of the Sunshine Coast, Queensland, School of Business and Creative IndustriesW. Robert J. Alexander - University of the Sunshine Coast, Queensland, School of Business and Creative IndustriesSajid Anwar - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
- Publication details
- Economic Analysis Letters, Vol.3(4), pp.23-33
- Publisher
- Anser Press
- Date published
- 2024
- DOI
- 10.58567/eal03040003
- ISSN
- 2972-3272
- Copyright note
- © 2024 by Belloni, Alexander and Anwar. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
- Organisation Unit
- School of Business and Creative Industries; Indigenous and Transcultural Research Centre
- Language
- English
- Record Identifier
- 991092498102621
- Output Type
- Journal article
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