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The Political Economy of Labour Market Institutions$
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Gilles Saint-Paul

Print publication date: 2000

Print ISBN-13: 9780198293323

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198293321.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 15 April 2021

The Constituency Effect

The Constituency Effect

(p.169) 6 The Constituency Effect
The Political Economy of Labour Market Institutions

Gilles Saint‐Paul

Oxford University Press

This chapter discusses the constituency effect. By this, it is meant that when a labour market institution is in place, it creates its own political support. This in turn generates status‐quo bias and resistance to reform. The effect is illustrated in the case of employment protection. Other applications include the role of initial conditions and of pre‐announcing the reform.

Keywords:   constituency effect, initial conditions, labour reallocation, path dependence, reform, reform preannouncemement, status‐quo bias

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