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REGULATION AND UNEMPLOYMENT

REGULATION AND UNEMPLOYMENT Thomas Gale Moore0 1. Introduction Regulation has a large and often unrecognized influence in keeping unemployment high. Its most direct effect comes from controls imposed on the labor market, such as minimum wages, employment taxes, rules covering hours of work and time off from employment, restrictions on layoffs and discharges, safety regulations, and mandates governing anti-discrimination or bias. These regulations play a major role in reducing the efficiency of the labor market and can produce much higher levels of unemployment than less regulated markets. Since my expertise is elsewhere, however, I will focus on the huge and rapidly growing body of regulations in all our nations that affects particular industries or is applied to business generally. To many observers the relationship between government regulation of a specific industry, such as the airlines, farming, trucking, or the pharmaceutical industry, and employment is unclear. Nor is it immediately evident that environmental and safety controls can also diminish labor market opportunities. Although indirect, the effects, however, are quite real and perhaps as important as those related to the labor market. These regulations affect economic growth and hence employment. Rapid economic growth creates jobs and lowers unemployment. When the economy is stagnant http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal des Économistes et des Études Humaines de Gruyter

REGULATION AND UNEMPLOYMENT

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Publisher
de Gruyter
Copyright
Copyright © 1996 by the
ISSN
2194-5799
eISSN
2153-1552
DOI
10.1515/jeeh-1996-0109
Publisher site
See Article on Publisher Site

Abstract

Thomas Gale Moore0 1. Introduction Regulation has a large and often unrecognized influence in keeping unemployment high. Its most direct effect comes from controls imposed on the labor market, such as minimum wages, employment taxes, rules covering hours of work and time off from employment, restrictions on layoffs and discharges, safety regulations, and mandates governing anti-discrimination or bias. These regulations play a major role in reducing the efficiency of the labor market and can produce much higher levels of unemployment than less regulated markets. Since my expertise is elsewhere, however, I will focus on the huge and rapidly growing body of regulations in all our nations that affects particular industries or is applied to business generally. To many observers the relationship between government regulation of a specific industry, such as the airlines, farming, trucking, or the pharmaceutical industry, and employment is unclear. Nor is it immediately evident that environmental and safety controls can also diminish labor market opportunities. Although indirect, the effects, however, are quite real and perhaps as important as those related to the labor market. These regulations affect economic growth and hence employment. Rapid economic growth creates jobs and lowers unemployment. When the economy is stagnant

Journal

Journal des Économistes et des Études Humaines – de Gruyter

Published: Mar 1, 1996

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