Title: The effects of labour market reforms upon unemployment and income inequalities: an Agent Based Model
Authors: Giovanni Dosi - Scuola Superiore Sant (Italy)
Andrea Roventini - University of Verona (Italy)
Maria Enrica Virgillito - Scuola Superiore Sant\\\'Anna (Italy) [presenting]
Marcelo Pereira - Unicamp (Brazil)
Abstract: The aim is to analyse the effects of labour market structural reforms by meansof an agent-based model. Building on a previous work we introduce a policy regimechange characterized by a set of structural reforms on the labour market, keeping constant the structure of the capital- and consumption-good markets. Confirming a recent IMF report, the model shows how labour market structural reforms reducing workers bargaining power and compressing wages tend to increase (i) unemployment, (ii) functional income inequality, and (iii) personal income inequality. We further undertake a global sensitivity analysis on key variables and parameters which confirms the robustness of our findings.