Governance of Sustainable Security: The Impact of Institutions and Values on Labour Market Transitions Using ESS and SILC Data?

Abstract

The paper examines the impact of labour market institutions and social norms and values on the relative performance of countries in balancing flexibility and security. In a previous paper (Muffels, 2010) we defined a set of institutional and transition outcome indicators to compare the relative labour market performance of 26 countries in the EU on these two dimensions. The picture provided little support for the supposition that regimes tend to converge. In this second paper we try to explain the transition patterns we observe. We are particularly interested in the impact of labour market institutions and social norms and values on these transition patterns. The institutions to examine concern not only the usual candidates such as EPL, Unemployment Insurance and Active Labour Market Policy but also various indicators for the wage bargain such as union density, collective agreement coverage and level of centralisation or decentralisation. The novelty is that we also consider the effects of social norms and values in society associated with work orientations and feelings of trust and altruism. We estimate multi-level multinomial regression models with country fixed effects on integrative and exclusionary labour market transitions. Integrative transitions refer to job-to-job transitions, transitions from a fixed-term into a permanent job and re-entry into employment; exclusionary transitions to exit out of employment. The evidence confirms that employment regulation exerts negative effects and UI generosity and trust positive effects on integrative transitions. Support is found for the positive impact of UI generosity on the job match. Labour market policy and wage bargain indicators exert counterintuitive or small and insignificant effects.