Product market deregulation and the US employment miracle

Monique Ebell, Christian Haefke

Research output: Contribution to journalArticle

Abstract

We consider the dynamic relationship between product market entry regulation and equilibrium unemployment. The main theoretical contribution is combining a job matching model with monopolistic competition in the goods market and individual bargaining. We calibrate the model to US data and perform a policy experiment to assess whether the decrease in trend unemployment during the 1980s and 1990s could be directly attributed to product market deregulation. Under our baseline calibration, our results suggest that a decrease of less than two-tenths of a percentage point of unemployment rates can be attributed to product market deregulation, a surprisingly small amount.

Original languageEnglish (US)
Pages (from-to)479-504
Number of pages26
JournalReview of Economic Dynamics
Volume12
Issue number3
DOIs
StatePublished - Jul 2009

Keywords

  • Barriers to entry
  • Product market competition
  • Wage bargaining

ASJC Scopus subject areas

  • Economics and Econometrics

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