This article analyses the impact of public employment creation on private sector employment and unemployement. In a macroeconomic approach, the first section focuses on the crowding out effects of public jobs creation on private jobs creation. The effect is found to be large and significant by...

This paper offers a dynamic model of the labor market with collective wage bargaining in a small open economy. The long run and short run equilibria are carefully distinguished, and the dynamics of the unemployment rate is analyzed. This model is useful to study the consequences of shocks on the...

This paper studies, in a general equilibrium model with imperfect competition, the economic efficiency of union wage settings arrangements at centralized, industry, and decentralized levels. The wage agreement at industry level is Pareto inefficient and entails the highest unemployment rate. The...

This paper analyzes optimum income taxation in a model with endogenous job destruction that gives rise to unemployment. It is shown that optimal tax schemes comprise both payroll and layoff taxes when the state provides public unemployment insurance and aims at redistributing income. The optimal...

This survey highlights the key results of the empirical literature concerning the costs of flexibility enhancing reforms in product and labour markets. The documented costs include reduced employment, loss of government revenue, undesirable distributional consequences and political instability....

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits...

This survey reviews the recent research on trust, institutions and economic development. It discusses the various measures of trust and documents the substantial heterogeneity of trust across space and time. The conceptual mechanisms that explain the influence of trust on economic performance...

In cross-country data, teaching practices (such as copying from the board versus working on projects together) are related to various dimensions of social capital. In micro-data from three datasets, teaching practices are also strongly correlated with student beliefs about cooperation across...