Policy Transferability and Hysteresis: Daily and Weekly Hours in the BRD and the US

   (244 K)

I develop a model with the path of labor-market outcomes exhibiting hysteresis depending on prior labor-market policy. The results suggest that attempts to transfer policies across economies lead to surprising results even if current economic outcomes in the countries appear similar. Examples of minimum wages, optimal income maintenance, and training programs are given. The results are applied to a discussion of overtime laws and differences in days worked and weekly hours in the U.S. and Germany.

Published: Institutions and Labor Market Performance: Corporate Views on the USand German Economies, R. Butler et. al., eds. London: Routledge. (1995)

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