The Effect of EPL Reforms on Sectoral Employment Depending on Business Cycle: IV Estimates (%)
Citation: IMF Working Papers 2017, 277; 10.5089/9781484333013.001.A001Note: estimates based on equation (2) with IV. Solid blue lines denote the differential employment effect of reform under weak (Panel A) and strong (Panel B) business cycle conditions between a sector with a high natural layoff rate (at the 75th percentile of the distribution) and a sector with a low natural layoff rate (at the 25th percentile of the distribution). Effects under strong (weak) business cycle conditions are shown here using F=0 (F=1). Dotted lines indicate 90 percent confidence interval based on standard errors clustered at country-sector level. Solid black lines denote the corresponding responses presented in Figure 3.