The Effects of Labour Market Reforms upon Unemployment and Income Inequalities: an Agent Based Model
Résumé
This paper is meant to analyse the e ects of labour market structural reforms by means
of an agent-based model. Building on Dosi et al. (2016b) we introduce a policy regime
change characterized by a set of structural reforms on the labour market, keeping constant
the structure of the capital- and consumption-good markets. Con rming a recent IMF report
(Jaumotte and Buitron, 2015), the model shows how labour market structural reforms re-
ducing workers' bargaining power and compressing wages tend to increase (i) unemployment,
(ii) functional income inequality, and (iii) personal income inequality. We further undertake
a global sensitivity analysis on key variables and parameters which con rms the robustness
of our findings.
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