Ricerc@Sapienza

This paper proposes an empirical analysis about the influence of some institutional factors (taxation, active and passive labor market policies, labor and goods market regulation and unions’ participation) on the component of the wage growth not explained by the productivity growth (WP gap, thereafter). We consider a 14 OECD countries Panel Data over the period 1983-2003, using four different estimations: fixed effects vector decomposition (FEVD), fixed effects (FE), random effects (RE) and feasible general least square (FGLS).

This paper analyzes the role played by five labor policy instruments (firing tax, hiring subsidies, taxation, unemployment benefits and tax structure) in a matching model with endogenous job destruction, when search externalities are not internalized and the market solution is inefficient. Since the theoretical model does not show univocal effects on equilibrium unemployment of some policy tools (such as hiring subsidies and firing tax), we propose a calibration and a numerical simulation of the model, in order to verify their real impact on unemployment and labor market structure.