Photo by Kostyantyn Chernichkin
We find that labor market regulations change was the second most important force of economic growth for the period 1995−2014. Relatively rich countries benefit more from labour market liberalization than poorer ones. At the same time, easing of labor market regulations affects growth more in countries where labor markets are less liberalized. Thus, countries with high labour market rigidities will be largely rewarded for easing those rigidities.