Research suggests that in heavily regulated labor markets:
A) firm size is bigger.
B) unemployment lasts longer.
C) companies invest more in new technology.
D) the labor force is more skilled.

Question

Quizplus · Accepted Answer

Heavily-regulated labor markets tend to make it more difficult for firms to adjust to changing economic conditions, leading to longer-term unemployment as companies struggle to maintain profitability. This is because regulations can make hiring, firing, and changing work hours more difficult and costly for employers. Firms may also be less likely to invest in new projects or technologies if they face stricter regulations as these investments may be less profitable. The size of the firm, skill level of the workforce, and investment in new technology are not necessarily associated with the level of labor market regulation.

Research Suggests That in Heavily Regulated Labor Markets