Labor laws impact global economic cycles, affecting international business relationships.
The article looks at how different labor market rules in countries affect how their economies move together. By studying data from 20 countries over 1964-2003, the researchers found that countries with similar trade, money policies, and being in the same economic union tend to have more similar economic ups and downs. They also found that countries with different rules on things like job security and taxes have less similar economies. In particular, higher taxes on jobs make countries' economies move more alike.