Arbeitsmarkteffekte wirtschaftlicher Freiheit

Using a panel of 91 countries, this paper econometrically analyzes how different economic freedoms affect employment and unemployment. There are four main findings. Firstly, a small government sector and a legal system characterized by an independent judiciary, impartial courts and an effective protection of property rights reduce unemployment and increase the employment level. Secondly, a high degree of monetary stability may result in a deterioration of the employment opportunities for young people and the lowskilled. Thirdly, more freedom in foreign trade and payments is likely to improve the employment situation of women but presumably has an adverse impact on the low skilled in industrial countries. It is also likely to increase the age at which young people enter working life in these countries. Fourthly, comprehensive deregulation probably increases unemployment, at least in the short term. However, it presumably also has beneficial effects on women and young people.