GLOBAL FORUM ON COMPETITION Does competition kill or create jobs? - - PowerPoint PPT Presentation

▶

Jul 18, 2023 369 likes •478 views

GLOBAL FORUM ON COMPETITION Does competition kill or create jobs? Jean-Luc Schneider OECD Economics Department 29 October 2015 Countries where competition is higher have higher employment rates Employment rate, average 2000-2014 80

SLIDE 1

GLOBAL FORUM ON COMPETITION

Jean-Luc Schneider OECD Economics Department 29 October 2015

Does competition kill or create jobs?

SLIDE 2

Countries where competition is higher have higher employment rates

AUS AUT BEL CAN CHE CZE DEU DNK ESP EST FIN FRA GBR GRC HUN IRL ISL ISR ITA JPN KOR LUX MEX NLD NOR NZL POL PRT SVK SVN SWE TUR USA 40 45 50 55 60 65 70 75 80 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 Employment rate, average 2000-2014 Product market regulation, average 2003, 2008 Correlation coefficient: -0.58 t-statistics: -3.97

SLIDE 3

Network deregulation increases exit from and entry into these industries

Note: ETCR stands for energy, transport and communications regulation, measured with the OECD ETCR indicator. Source: OECD calculations using national household surveys for Australia (HILDA), Germany (SOEP), Korea (KLIPS), Switzerland (SHP), the United Kingdom (BHPS&UKHLS) and the United States (PSID).

5 10 15 20 25 Exit rate from network industries Entry rate into network industries

After a typical reform Sample mean

SLIDE 4

Network deregulation reduced the wage premium in these industries

2 4 6 8 10 12 1985 1990 1995 2000 2005 2010

ETCR, points Wage premium, per cent

SLIDE 5

Macroeconomic employment effects are positive after 3 years

Change in aggregate labour force participation following an easing of product market regulation

Bouis, R., et al. (2012), "The Short-Term Effects of Structural Reforms: An Empirical Analysis", OECD Econom ics Departm ent Working Papers, No. 949, OECD Publishing, Paris.

SLIDE 6

Network pro-competition reforms increase jobs churn across the economy

Note: ETCR stands for energy, transport and communications regulation, measured with the OECD ETCR indicator. The probability

f becoming employed is calculated over people who do not have a job, including economically inactive persons.

Source: OECD calculations using micro-level data for 28 OECD countries from ECHP, EU-SILC and six national household surveys.

SLIDE 7

Pro-competitive reforms have stronger effects

n less skilled individuals

Note: ETCR stands for energy, transport and communications regulation, measured with the OECD ETCR indicator. The probability of becoming employed is calculated over people who do not have a job, including economically inactive persons. Source: OECD calculations using micro-level data for 28 OECD countries from ECHP, EU-SILC and six national household surveys.

SLIDE 8

Pro-competitive reforms play a key role in creating jobs

* Size of a typical reform is measured by taking the average over 5 years of policy changes that impact the

utcome variable in a positive direction, observed over the sample period and countries covered by the

estimation.

Long-run effects on the employment rate (in % points)

Source: Gal and Theising (2015)

Reform areas Effect of a « typical reform » Unemployment benefits 0.5 Active labour market policies 0.4 Tax wedge 0.5 Wage bargaining process 0.3 Competition in network industries 0 .8

SLIDE 9