Abstract
This chapter studies the effects of structural reforms on the labour share using a DSGE model, distinguishing between monopolistic and oligopolistic competition in the goods market. Two specific structural reforms are considered: a reduction in entry costs for new firms and a reduction in unemployment benefits. The impact on labour share of lower entry costs depends on the type of competition. Under oligopolistic competition the labour share of income increases in the long run, but under monopolistic competition it permanently decreases. A reduction in unemployment benefits results in a permanently lower (higher) labour (profit) share of income.
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