A fiscal job? An analysis of fiscal policy and the labor market

Table 3 Time-varying Okun’s coefficient and fiscal episodes

	Time-varying Okun’s coefficient (employment)
	(1)	(2)	(3)	(4)	(5)
Central Bank policy rate (−1)	−0.255**	−0.226*	−0.231*	−0.236*	−0.250*
	(0.120)	(0.121)	(0.125)	(0.119)	(0.124)
Employment protection legislation	−0.108***	−0.0937**	−0.0899**	−0.0998**	−0.0939**
	(0.0380)	(0.0393)	(0.0391)	(0.0384)	(0.0381)
Dummy output expansion	0.00552		0.00499		0.00360
	(0.0056)		(0.00801)		(0.00646)
Fiscal consolidation GP		0.0543***	0.0568**
		(0.0189)	(0.0223)
Fiscal expansion GP		0.0406	0.0273
		(0.0264)	(0.0253)
Fiscal consolidation GP* Output expansion			−0.0039
			(0.0257)
Fiscal expansion GP* Output expansion			0.0678
			(0.0484)
Fiscal consolidation AA				0.0462**	0.0559**
				(0.0184)	(0.0228)
Fiscal expansion AA				0.0325	0.00904
				(0.0221)	(0.0198)
Fiscal consolidation AA* Output expansion					−0.0183
					(0.0276)
Fiscal expansion AA* Output expansion					0.0935*
					(0.0466)
Observations	753	747	747	747	747
R-squared	0.748	0.755	0.758	0.753	0.758
Country	34	33	33	33	33

Note: Robust standard errors in parentheses
***p < 0.01, **p < 0.05, *p < 0.1
GP refers to fiscal episodes captured following Giavazzi and Pagano (1996) and AA refers to fiscal episodes captured following Alesina and Ardagna (1998)