This book looks at why labour market institutions such as those evident in continental Europe - more specifically, employment protection, unemployment benefits, and relative wage rigidities - exist, what role they play in society, why they seem so persistent, where the pressure to reform them comes from, and whether reform can be politically viable or not. It studies the economic conditions under which we expect a given set of institutions to arise and remain stable, and provides theoretical guidelines about the gainers and losers from given institutions.
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