Labour Market Rigidities and International Risk Sharing across OECD Countries

Wirtschaftswissenschaften

Fidrmuc, Jarko, Foster, Neil, Scharler, Johann

Labour Market Rigidities and International Risk Sharing across OECD Countries

Fidrmuc, Jarko, Foster, Neil, Scharler, Johann: Labour Market Rigidities and International Risk Sharing across OECD Countries, Journal of International Money and Finance, 2011 (30): 660-677.

Originalarbeiten in wissenschaftlichen Fachzeitschriften mit Review-Verfahren

In this paper we examine the role of labour market rigidities in the context of international consumption risk sharing. Stronger labour market regulation may make it easier to borrow against future income, thus allowing shocks to be smoothed to a greater extent. In addition, rigid labour markets may help to enforce implicit contracts that shift risk from employees to owners of firms, who, in turn, may diversify risk internationally. Using data for 19 OECD countries we show that labour market rigidities significantly increase consumption correlations and reduce the exposure to country-specific shocks. These results suggest that labour market rigidities improve the international sharing of consumption risks by fostering a more efficient intra-national allocation of risk.

Zeppelin-Lehrstuhl für Internationale Wirtschaftstheorie & -politik (eingerichtet 05 / 2011)

Am Seemooser Horn 20
88045 Friedrichshafen

Tel: +49 7541 6009-1241
Fax: +49 7541 6009-1299
Email: jarko.fidrmuc@zu.de
http://www.zeppelin-university.de/deutsch/lehrstuehle/internationales_management/internationales_management_profil.php