The effects of labour market reforms upon unemployment and income inequalities: an agent-based model
Authored by G Dosi, Marcelo C Pereira, Andrea Roventini, Maria Enrica Virgillito
Date Published: 2018
DOI: 10.1093/ser/mwx054
Sponsors:
European Union
FAPESP
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Model Documentation:
Other Narrative
Mathematical description
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Abstract
This work analyses the effects of labour market structural reforms by
means of the labour-augmented `Schumpeter meeting Keynes' (K+S)
Agent-Based model. We introduce a policy regime change characterized by
a set of structural reforms on the labour market. Confirming a recent
IMF report, the model shows how structural reforms reducing workers'
bargaining power and compressing wages tend to increase (a)
unemployment, (b) functional income inequality and (c) personal income
inequality. We further undertake a global sensitivity analysis on key
variables and parameters which corroborates the robustness of our
findings.
Tags
Inequality
Dispersion
labor market
growth
Credit
Policies
Unemployment
Fragility
Efficient
Oecd countries
Wage inequality
Structural reforms
Income distribution