OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Product and Labour Markets Interactions in OECD Countries

This paper analyses several of the cross-market effects of policies aimed at influencing outcomes in product and labour markets. Focusing on subsets of OECD countries, we look at the implications of product market competition for industry wages and overall employment, and the implications of labour market arrangements for industrial structure and innovation potential. We also look at the potential implications of regulatory reform for employment security and income inequality. We provide empirical evidence on long-run policy interactions by exploiting the cross-country and intersectoral dimensions of the data, though the analysis of employment uses also the time-series dimension. To this end, we rely on a large set of indicators of (economy-wide) labour market policies and institutions and (economy-wide, industry-specific and time-varying) product market regulations. We find that: (a) anticompetitive product market regulations have significant negative effects on non-agricultural ...


Keywords: firm size, wage premia, panel data, industry specialisation, industrial relations, employment, innovation, regulation
JEL: L50: Industrial Organization / Regulation and Industrial Policy / Regulation and Industrial Policy: General; J50: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Labor-Management Relations, Trade Unions, and Collective Bargaining: General; L10: Industrial Organization / Market Structure, Firm Strategy, and Market Performance / Market Structure, Firm Strategy, and Market Performance: General; E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity; O31: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Innovation and Invention: Processes and Incentives; J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure; Wage Differentials
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