Is significant labour market deregulation positive for employment?

Since the late 1970s and the early 1980s, OECD countries have to varying degrees deregulated their labour markets (reduction in the role of unions, reduction in redundancy costs and in the generosity of unemployment benefits). The idea was that this development would help companies create jobs and therefore lead to a higher employment level and lower structural unemployment. We will examine whether this idea is relevant by comparing, for OECD countries: The trend in real wages in relation to productivity since 1995 (labour market deregulations reduce equilibrium real wages); The employment rate; The (structural) unemployment rate. The result of this comparison show s that significant labour market flexibility: Increases the employment rate slightly; But reduces unemployment markedly, which must therefore partly be generated by the fall in the participation rate.