Labor market rigidities and misallocation: Evidence from a natural experiment

作者：Dinara Alpysbayeva, Stijn Vanormelingen · 发表于：Labour Economics · 年份：2022 · DOI：10.1016/j.labeco.2022.102229 · 被引用次数：10 · 研究领域：Labor market dynamics and wage inequality、Firm Innovation and Growth、Global trade and economics

This paper estimates the impact of labor market rigidities on labor misallocation. To this end, we use a recent policy change in Belgium, leading to an increase in employment protection for blue-collar workers and a decrease in employment protection for white-collar workers. The wedge between marginal product and marginal cost - the gap - is used as a measure for misallocation. Using a rich data set of the universe of Belgian firms, evidence shows that a firm with 90% blue-collar workers experienced after the policy change an increase in the gap of 3300 euro relative to a firm with 10% of blue-collar workers.