The effects of labour market reforms upon unemployment and income inequalities: an agent-based model

Giovanni Dosi; Marcelo C Pereira; Andrea Roventini; Maria Enrica Virgillito

doi:10.1093/ser/mwx054

The effects of labour market reforms upon unemployment and income inequalities: an agent-based model

Giovanni Dosi^*
, Marcelo C Pereira
, Andrea Roventini
, Maria Enrica Virgillito

^*Corresponding author

Sant'Anna School of Advanced Studies
Sciences Po

Research output: Contribution to journal › Article › peer-review

23 Citations (Scopus)

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.

Original language	English
Pages (from-to)	687-720
Number of pages	34
Journal	Socio-Economic Review
Volume	16
Issue number	4
DOIs	https://doi.org/10.1093/ser/mwx054
Publication status	Published - 2018

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth
SDG 10 Reduced Inequalities

All Science Journal Classification (ASJC) codes

Sociology and Political Science
General Economics,Econometrics and Finance

Keywords

Income Distribution
Inequality
Labour Market Structural Reforms
Long Run Growth.
Unemployment

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10.1093/ser/mwx054

Cite this

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title = "The effects of labour market reforms upon unemployment and income inequalities: an agent-based model",

abstract = "This work analyses the effects of labour market structural reforms by means of the labour-augmented {\textquoteleft}Schumpeter meeting Keynes{\textquoteright} (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{\textquoteright} 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.",

keywords = "Income Distribution, Inequality, Labour Market Structural Reforms, Long Run Growth., Unemployment, Income Distribution, Inequality, Labour Market Structural Reforms, Long Run Growth., Unemployment",

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The effects of labour market reforms upon unemployment and income inequalities: an agent-based model

Abstract

UN SDGs

All Science Journal Classification (ASJC) codes

Keywords

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