Labor Market Institutions: Minimum Wages, Unionization, Contracts

In this chapter, there is emphasis on labour market institutions, minimum wages, unionizations, and contracts. The differences in institutions are one of the causes in the differences in performance in countries. This chapter explains the role of collective wage bargaining and ways of doing it, unionization, the degree of government intervention and redundancy costs in labour markets. Minimum wage varies widely across countries. Unionization has declined greatly in the past three and a half decades, and there are many ways to do collective bargaining in a country. The redundancy cost measures the total cost of dismissal for a worker. All of these elements contribute to unemployment rate by duration.

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