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

Table 4 Time-varying Okun’s coefficient and duration of fiscal episodes

	Time-varying Okun’s coefficient (employment)
	(1)	(2)	(3)	(4)
Central Bank policy rate (−1)	−0.243*	−0.244*	−0.238*	−0.250*
	(0.121)	(0.123)	(0.119)	(0.123)
Employment protection legislation	−0.0968**	−0.0966**	−0.0945**	−0.0897**
	(0.0394)	(0.0394)	(0.0397)	(0.0396)
Dummy output expansion		0.00559		0.00344
		(0.0071)		(0.0068)
Duration consolidation GP	0.0170***	0.0177**
	(0.0056)	(0.0068)
Duration expansion GP	0.0185*	0.0136
	(0.0096)	(0.0127)
Duration consolidation GP* Output expansion		−0.00175
		(0.0102)
Duration expansion GP* Output expansion		0.0117
		(0.0121)
Duration consolidation AA			0.0293**	0.0337**
			(0.0123)	(0.0155)
Duration expansion AA			0.0214	0.00879
			(0.0147)	(0.0134)
Duration consolidation AA* Output expansion				−0.00867
				(0.0168)
Duration expansion AA* Output expansion				0.0545**
				(0.0262)
Observations	747	747	747	747
R-squared	0.755	0.755	0.755	0.759
Country	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)