Laboring in Vain: How Regulation Affects Unemployment

Published July 14, 2020

Many in the United States are proposing regulations that would make American labor markets more like Europe’s. But a comparison of European and US labor markets shows that the United States has delivered far better outcomes. Government regulations that increase the cost of working lead to higher unemployment and decreased prosperity.

Discussion Questions:

1. What happens to unemployment when labor markets are strictly regulated?
2. How can we protect workers and raise wages without overregulating labor markets?

Additional Resources:

• Read “The Effect of Economic Freedom on Labor Market Efficiency and Performance” by Lee Ohanian. Available here.
• Read “Socialism, Capitalism, and Income” by Edward Lazear, available here.
• Read “Elon Musk Fights the Law and Economic Freedom Wins” by Lee Ohanian. Available here.