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

The quantification of structural reforms

Introducing country-specific policy effects

This paper presents country-specific effects of structural reforms. It discusses how sizeable and interesting country-specific effects can be identified in a panel setting by conditioning the impact of individual policies on their own level or on the stance of other policies and institutions. This approach allows for the incorporation of a potentially large set of additional policy areas including institutions and policy areas with limited time-series availability (e.g. sub-components of the Product Market Regulation indicator, housing market regulations and policies, Doing Business indicators and the quality of institutions such as the rule of law indicator or the efficiency of the legal system). Results suggest that for instance, when more stringent product market regulation hurts more in more open economies. Better institutions amplify the positive effect of R&D spending. Tax wedge reduction leads to less employment gains when EPL is not very stringent.


Keywords: institutions, OECD, product and labour market regulation, employment, non-linear effects, structural reform, investment, policy interactions, productivity
JEL: J08: Labor and Demographic Economics / General / Labor Economics Policies; 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; D24: Microeconomics / Production and Organizations / Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity; E22: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Investment; Capital; Intangible Capital; Capacity; E17: Macroeconomics and Monetary Economics / General Aggregative Models / General Aggregative Models: Forecasting and Simulation: Models and Applications
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