Work detail

Simulation of Impacts of Labor Laws on Labor Market

Author: Mgr. Ilona Dlouhá
Year: 2011 - summer
Leaders: PhDr. Pavel Vacek Ph.D.
Work type: EEI & EP
Language: English
Pages: 94
Awards and prizes:
Abstract: This master thesis analyzes the differences in the labor laws and their impacts on the
development of the labor markets in large selection of OECD countries, including the
Czech Republic. The thesis covers both historical and current data including the late-2000s
recession. The labor market performance is measured by hours worked per person, which
combines the extensive margin (employment rate) and the intensive margin (hours worked
by employed individuals). Labor laws are represented by the average and marginal tax
wedges, employment protection legislation, labor market policies and trade union density.
The thesis contains an empirical model of the relationship between the labor market
performance and labor laws for 24 OECD countries for the period 2000-2008. The thesis
shows that the lower hours worked are associated with more strict employment protection
legislation and lower trade union density. The effect of taxation (in terms of tax wedges)
varies substantially among different subgroups of the population, but it is generally quite
weak (elasticity around -0.15) and it cannot explain the overall differences in the
development of the labor market performance among countries.




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