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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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Two‐Tier Systems

Two‐Tier Systems

(p.227) 8 Two‐Tier Systems
The Political Economy of Labour Market Institutions

Gilles Saint‐Paul

Oxford University Press

Studies the role of two‐tier systems in generating consensus for a reform that would be otherwise repelled. It is shown that if exposure to unemployment is initially too low, such strategy will fail as well. Furthermore, it can be used to generate political support for an across‐the‐board reform at a later stage. However, recognition of that possibility by voters ex‐ante will reduce the political support for the two‐tier reform.

Keywords:   consensus, conversion clause, gradualism, lock‐in, political dynamics, two‐tier systems

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