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The Political Economy of Labour Market Institutions$
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Gilles Saint-Paul

Print publication date: 2000

Print ISBN-13: 9780198293323

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198293321.001.0001

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The Identifiability Effect

The Identifiability Effect

Chapter:
(p.207) 7 The Identifiability Effect
Source:
The Political Economy of Labour Market Institutions
Author(s):

Gilles Saint‐Paul

Publisher:
Oxford University Press
DOI:10.1093/0198293321.003.0008

Discusses another source of status‐quo bias, namely the identifiability effect. This refers to the fact that the gainers and losers from an institution currently in place are better identified than those from an institution not currently prevailing. The identifiability effect leads to status‐quo bias provided uncertainty redistributes losses from non‐decisive to decisive voters. The concept is then applied to analysing the impact of business cycles on the optimal timing of labour market reform.

Keywords:   business cycles, Identifiability effect, political hysteresis, timing of reform

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