for many labour market policies by contrast the impact is less clear cut as they affect both the dispersion of earnings and the level of employment in sometimes conflicting ways at least for some types of workers examples include increasing the minimum wage relative to the median wage increasing the level of employment protection and increasing the generosity of unemployment benefits one labour market reform that stands out as having a positive effect on both employment and earnings equality is lowering the gap of employment protection on temporary and permanent work the impact of product market liberalisation on income inequality is ambiguous