Using estimates of earnings functions in Ghana, this paper examines patterns of labor market segmentation with regard to formal and informal employment. Persistent earnings differentials are used as indicators of limited mobility across segments of the employed labor force. We find evidence of labor market segmentation between formal and informal employment and between different categories of i...

\Western Europe su®ers from too many labor market rigidities, from excessively generous unemployment insurance to high employment protection, and to high minimum wages. It is essential that countries putting in place new institutions do not commit the same mistakes." The quote is made up. But it is, I believe, a fair representation of the opinions of many experts and many organizations, from Th...

and the conference participants for valuable comments and suggestions on an earlier version of this paper. We are responsible for all remaining errors.

I study the interactions of product and labor market institutions in a model characterized by a three-states representation of the labor market. Firms bargain with unions over wages and employment levels. This generates unemployment. Households take the associated unemployment risk as given in making their participation decisions. Unemployment inserts a wedge between labor supply (participation...

Comparative research contrasts the corporatist welfare states of Europe with the unregulated U.S. labor market to explain low rates of U.S. unemployment in the 1980s and 1990s. In contrast, this article argues that the U.S. state made a large and coercive intervention into the labor market through the expansion of the penal system. The impact of incarceration on unemployment has two conflicting...

Market Imperfections and Firm-Sponsored Training Recent human capital theories predict that labor market frictions and product market competition influence firm-sponsored training. Using matched worker-firm data from Dutch manufacturing, our paper empirically assesses the validity of these predictions. We find that a decrease in labor market frictions significantly reduces firms’ training expen...

Labour market reforms face very often opposition from the employed workers, because it normally reduces their wages. Also product market regulations are regularly biased towards too much benefitting the firms. As a result there remain many frictions in both the labour and product markets that hinder an optimal functioning of the economy. These issues have recently received a lot of attention in...

What Do Labor Market Institutions Do? The past couple of decades have seen a huge increase in research on various labor market institutions. This paper offers a brief overview and discussion of research on the labor market impacts of minimum wages (MW), unemployment insurance (UI), and employment protection legislation (EPL). It is argued that research on UI is largely a success story, involvin...