تسهیم ریسک در داخل و در سراسر کشور: نقش نهادهای بازار کار

This paper studies the effect of labor market institutions on within- and cross-country risk sharing, using a model of international trade in risky assets modified to include a subset of agents, labor-owners who do not access financial markets, and employment security provisions. Labor market, institutions, by promoting within-country risk-shifting arrangements between agents with or without, access to financial markets, reduce the fluctuations of non-tradable labor incomes and amplify the, fluctuations of capital incomes. Capital flows become more volatile across countries, and if the, configuration of labor markets differs across countries, capital-owners bear the burden of systematic, undiversifiable world aggregate uncertainty.

This paper shows in theory that, when risks cannot be fully diversified on financial markets, labor market institutions meant to promote risk-shifting arrangements between agents with or without access to financial markets may affect the response of aggregate consumption and capital income flows to country-specific income shocks. The analysis relates to studies from two different fields of the literature, namely labor economics and international economics. According to the social insurance approach to institutional analysis, while the introduction of labor market institutions may be hardly motivated in a frictionless economy where workers can insure perfectly against labor income risk, institutional features such as employment protection legislation (Lazear, 1990 and Bertola, 2004) and wage setting (Agell, 2002) may represent second-best instruments for sharing risk under incomplete financial markets. In labor economics

This paper shows in a stylized model that employment protection legislation affects the transmission of country-specific income shocks and the behavior of consumption and capital income flows by redistributing risk among agent types within country borders. The proposed theoretical analysis uncovers a novel mechanism whereby institutional features of national labor markets may be relevant to macroeconomic outcomes in a simple framework consistent with the evidence, paving the way for further theoretical and empirical work in both international and labor economics. The model could be extended to study the effect of asymmetries in adjustment costs and the relevant trade-offs between labor income insurance and production efficiency, as well as to focus on business cycle fluctuations and perform simulation analyses as in Zanetti (2011). As another line of future research, it would also be interesting to consider institutional features other than employment protection legislation, as of course institutions interact among themselves in many and possibly relevant ways, generating policy complementarities amenable for further investigation.