Dual Labor Market Research Articles

Impact of Immigration Policies on Economic Growth in Germany

Purpose: To aim of the study was to analyze the impact of immigration policies on economic growth in Germany. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Germany's immigration policies have had a significant impact on its economic growth. These policies have facilitated the influx of skilled labor, which has helped to address the country's demographic challenges, particularly the aging population and labor shortages in key sectors. Immigrants have contributed to the labor market by filling both high-skilled and low-skilled jobs, boosting productivity and innovation. Additionally, immigration has increased consumer demand, further stimulating economic growth. Unique Contribution to Theory, Practice and Policy: Human capital theory, dual labor market theory & endogenous growth theory may be used to anchor future studies on the impact of immigration policies on economic growth in Germany. Implement comprehensive language and vocational training programs for refugees and low-skilled immigrants to facilitate their economic integration and productivity. Formulate balanced immigration policies that address sector-specific labor demands without disadvantaging native workers.

Korean human resource management as number one: lessons for the Asia Pacific

ABSTRACT Despite the devastation caused by Japanese colonial rule and over three years of the Korean War, the Korean economy has created the Miracle on the Han River over the past half-century, joining the ranks of advanced nations. Although it started with low-wage and labour-intensive industries, the accumulation and utilization of human capital have prepared companies like Samsung Electronics, Hyundai Motor, Naver and Coupang for a new leap forward. However, global issues such as the climate crisis and sustainability, the dual labour market, adversarial labour relations and low birth rates with rapid ageing are new challenges for Korean-style HRM. This is a collection of articles dealing with the question of Korean HRM as a success factor of Korean development and a seed for problems destabilizing the Korean economic perspective in the 21st century.

Beggaring Thy Co-Worker: Labor Market Dualization and the Wage Growth Slowdown in Europe

As temporary employment has become a pervasive feature of modern labor markets, reasons for wage growth have become less well understood. To determine whether these two phenomena are related, the authors investigate whether the dualized structure of labor markets affects macroeconomic developments. Specifically, they incorporate involuntary temporary workers into the standard wage Phillips curve to examine wage growth in 30 European countries for the period 2004–2017. Relying on individual-level data to adjust for a changing employment composition, their findings show, for the first time, that the incidence of involuntary temporary workers has strong negative effects on permanent workers’ wage growth, thereby dampening aggregate wage growth. This effect, which the authors name the competition effect, is particularly pronounced in countries where wage bargaining institutions are weak. The findings shed further light on the reasons for the secular slowdown of wage growth after the global financial crisis.

Labour market reforms, institutional complementarity and the insider–outsider wage gap

Abstract This article provides long-term evidence on how wage differentials between permanent and temporary workers are shaped by institutions that play a key role in labour market dualism, i.e. industrial relations, employment protection legislation and unemployment benefits. A two-step multilevel approach with fixed effects is employed using EU-SILC data for 25 European countries spanning up to 17 years (waves 2004–2020, N = 397) to estimate the moderating effects of several institutions and their interactions on the wage gap by contract type and across the whole wage distribution. The results show that more insider-oriented institutions tend to widen wage differentials and that the impact of institutional reforms on the wage gap varies greatly with the given institutional context. Overall, policy trends towards flexibilization risk widening insider–outsider divides due to accumulating labour market risks for temporary workers, thus increasing labour market segmentation by contract type.

Public attitudes towards government’s role in unemployment provision in three East Asian countries

ABSTRACT Public support for unemployment provision is essential to provide political legitimacy for welfare policy arrangements and yet it is understudied in East Asian welfare states. In contrast with the proposed unfavourable attitudes towards welfare among East Asian countries from the developmental/productivist perspectives, the study suggests socio-demographic and ideological differences in public attitudes towards the role of government in unemployment provision within and across Japan, (South) Korea, and Taiwan, which differ in welfare production regime and extent of labour market dualization. Data from the 2016 Role of Government V survey of the International Social Survey Programme (ISSP) was analysed. Findings revealed lower levels of public support for unemployment provision in large firm-oriented welfare production regimes like Japan and Korea, though in which labour market outsiders such as women, younger people, and unemployed workers were more supportive than their counterparts. Despite cross-national attitudinal differences, higher levels of support were consistently found in the lowest-income groups across three East Asian countries. The study provides new evidence of diverse patterns of welfare attitudes regarding unemployment provision in the East Asian welfare regimes. It also presents the need of (un)employment protection among labour market outsiders and low-income groups within these countries.

What does neo-classic economics get wrong? Social policy, labour market dualisation, and labour reallocation

The literature commonly assumes that social policy hinders labour mobility and reallocation across jobs and sectors. Particularly neo-classical economics posits that there is a trade-off between ‘security’ (social policy) and ‘efficiency’ (labour reallocation and employing workers in jobs where they are most productive). In a sample of 12 OECD countries between 2000 and 2008, this article shows that, as opposed to the common trade-off assumption, social policy supports greater labour reallocation across sectors. Furthermore, labour market dualisation as a result of the growth of ‘cheap labour’ reduces labour mobility across jobs and sectors. A higher share of ‘cheap labour’, defined as workers in low-paid jobs with little or no protection, segregates the labour market between ‘undesirable’ sectors (where cheap labour is employed) and desirable sectors (where wages are higher, and social protection is more expansive). This segregation impedes movement across sectors due to the fear of falling into an ‘undesirable’ sector. The social policy provides a safety net and helps bridge the labour market divide across sectors and hence positively contributes to inter-sectoral mobility.

Labor Market Flexibility and Unemployment: A Study of the United States

Purpose: The aim of the study was to investigate the labor market flexibility and unemployment: a study of the United States
 Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries.
 Findings: The study on Labor Market Flexibility and Unemployment in the United States found that while flexibility can foster job creation, it also exacerbates structural unemployment. Certain groups, like minorities and low-skilled workers, are disproportionately affected. Additionally, technological advancements and globalization reshape the labor market. Labor market institutions play a crucial role in mediating flexibility's impact. Overall, nuanced policy interventions are needed to address unemployment challenges.
 Unique Contribution to Theory, Practice and Policy: Structural unemployment theory, dual labor market theory & institutional theory of labor markets may be used to anchor future studies on the labor market flexibility and unemployment: a study of the United States. Practical recommendations could include fostering a supportive environment for entrepreneurship and innovation, enhancing access to lifelong learning and skill development opportunities, and implementing targeted measures to support vulnerable groups in the labor market. From a policy perspective, the study should advocate for evidence-based policymaking that prioritizes the promotion of inclusive growth and social cohesion.

A model of risk sharing in a dual labor market

In OECD countries, the labor market features a coexistence of open-ended, permanent jobs subject to strict employment protection and fixed-term, temporary jobs. This paper studies a search-and-matching model with risk-averse workers and dynamic employment contracts subject to limited commitment. In equilibrium, permanent and temporary jobs coexist when the match quality is sufficiently dispersed: firing costs generate insurance gains implying that permanent contracts are optimal for high-quality matches. Consistent with recent empirical evidence, quantitative analysis of the model shows that temporary contracts crowd out permanent jobs and do not generate employment gains.

A Ladder For Success? An Exploratory Study on the Engineers’ Dual Labor Market in Start-up

A Ladder For Success? An Exploratory Study on the Engineers’ Dual Labor Market in Start-up

OPPORTUNITIES FOR SSW NO.2 RESIDENCY STATUS: A CASE STUDY OF CHINESE MIGRANT WORKERS IN JAPAN

Approaching five years since the issuance of unlimited residency status for foreign workers in the 3K job sector, the acquisition of Specified Skilled Worker (SSW) No.2 status in Japan remains considerably below the government's anticipated target. This research aims to analyze the opportunities of SSW No.2 residency status for foreign workers, focusing on the case study of Chinese migrant workers from the dual labor market theory perspective. The research employs a qualitative approach with data collection conducted through literature sources. The findings reveal that, thus far, SSW No.2 status is predominantly held by Chinese migrant workers. However, the opportunities for foreign workers to obtain this status are notably limited due to a complex and challenging acquisition process. Employment in the secondary market accompanying this status requires foreign workers with skills equivalent to local workers. Aside from the benefit of bringing one's family, this status seems to offer no other long-term appeal. An urgent reevaluation of the procedures for obtaining SSW No.2 status is deemed necessary as a long-term solution to address the labor crisis in Japan.

Labor Market Reforms and Youth Unemployment

Purpose: The general purpose of the study was to examine labor market reforms and youth employment.
 Methodology: The study adopted a desktop research methodology. Desk research refers to secondary data or that which can be collected without fieldwork. Desk research is basically involved in collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories. Thus, the study relied on already published studies, reports and statistics. This secondary data was easily accessed through the online journals and library.
 Findings: The findings reveal that there exists a contextual and methodological gap relating to labor market reforms and youth employment. The study illuminated the intricate relationship between labor market reforms and youth unemployment, revealing both opportunities and challenges in tackling this issue. Analyzing empirical evidence from various studies provided insights into the effectiveness of different reform measures across different contexts. While some reforms, such as flexibility promotion and investment in human capital, showed promise in enhancing youth employment, others had mixed results. Future research directions include exploring interactions between labor reforms and macroeconomic factors and conducting longitudinal studies. Overall, the study emphasized the importance of nuanced reform approaches for inclusive economic growth, requiring collaboration among stakeholders and ongoing research for evidence-based policymaking.
 Unique Contribution to Theory, Practice and Policy: The Dual Labor Market theory, Human Capital theory and the Institutional theory may be used to anchor future studies on labor market reforms and youth unemployment. The study provided a comprehensive set of recommendations to address the challenges identified. These recommendations included adopting a multifaceted approach to labor market reforms, prioritizing investments in education and skills development, and fostering collaboration between stakeholders. The study emphasized the importance of active labor market policies (ALMPs), continuous monitoring and evaluation of reforms, and addressing structural barriers to youth employment. Additionally, policymakers were urged to prioritize youth entrepreneurship, enhance collaboration and knowledge sharing, and promote inclusive decision-making processes. Overall, the study offered practical strategies for policymakers, contributed to theory by highlighting the importance of evidence-based policymaking and stakeholder engagement, and informed future policy efforts to tackle youth unemployment effectively.
 Keywords: Labor Market, Reforms, Youth, Unemployment, Employment Policies, Economic Policy, Labor Force Participation

Labour Market Dualisation and Social Protection in South Korea: Searching for a New Social Contract and Growth Model

Labour Market Dualisation and Social Protection in South Korea: Searching for a New Social Contract and Growth Model

Japan’s dual labor market and its macroeconomic characteristics

Japan’s dual labor market and its macroeconomic characteristics

Monetary Policy, the Dual Labor Market, and Consumption in Japan

Monetary Policy, the Dual Labor Market, and Consumption in Japan

Monetary Policy, the Dual Labor Market, and Consumption in Japan

Monetary Policy, the Dual Labor Market, and Consumption in Japan

Employee Trust in Management: Evidence from the Greek Private and Public Sectors

In contrast to the vast literature on trust in management, the aspect of employee trust towards managers in Greece is still under researched. This paper aims to fill this gap by exploring the factors which determine employee trust towards managers in the case of the Greek dual labor market. Primary data collected through a questionnaire survey of employees are explored in a model where employee and workplace characteristics and employee’s experiences of economic depression are predictors of employee trust towards managers. The analysis of two different samples "public sector with workplace representation" and "private sector without workplace representation" allow for inferences and conclusions about the effects of the duality of the Greek labor market on employee trust towards managers. The results indicate differences in the effects of age, workplace tenure and hours worked on employee trust in management between public sector employees (trade union members) and private sector employees (not being members).

Labor market dualization or cultural divide?: A comparative analysis of the declining support for center-left parties in Western Europe and Japan

Center-left parties in Western Europe and Japan have experienced a persistent decline in voter turnout. This study examines the factors contributing to this weakening support. Using data from the 2016 European Social Survey across 13 countries and the 2017–2018 Japanese General Social Surveys, we tested three hypotheses: labor market dualization between insiders and outsiders; divergence in policy preferences between social investment and social compensation; and a cultural divide between liberalism and authoritarianism. Our findings provide little support for the labor market dualization and policy preference divergence hypotheses in both Western Europe and Japan. The third hypothesis, concerning a cultural divide in attitudes toward immigration, is supported only in Western Europe. Conversely, Japan is an anomaly because of the absence of a substantial left-liberal constituency. The scarcity of liberal values among Japan's sociocultural professionals suggests that center-left parties have underdeveloped core constituencies.

Unions and temporary workers’ wages in Spain: Testing solidarity in the good times and in the bad times

The labour market dualisation theory claims that labour unions bargain against the interests of temporary workers and that they foster inequalities between temporary and permanent employees. Conversely, the industrial relations literature argues that unions commonly follow solidaristic strategies towards outsiders. This study contributes to the literature by analysing unions’ associations with temporary workers’ hourly wages and the wage gap between permanent and temporary workers in Spain: one of the most prominent examples of labour market dualisation. By analysing cross-sectional surveys, unions’ influence through works councils, collective agreements and union density are studied during a period of economic growth (2006–2007) and a period of recession (2008–2010). Results show that there is generally no association between these three institutions and wage differences between permanent and temporary workers. The associations with temporary workers’ wages are insignificant or positive during both the period of economic growth and the period of recession.

Employment Protection in Dual Labor Markets: Any Amplification of Macroeconomic Shocks?

Abstract This paper studies the effects of labor market duality in terms of employment legislation protection (EPL) on labor market volatilities. Modeling contractual heterogeneity through a gap in EPL of temporary and permanent workers (weakly protected temporary/highly protected permanent contracts), I simulate both supply and demand shocks in a New Keynesian model with unemployment. I find that unemployment fluctuations follow an inverted U-shape over the magnitude of the EPL gap: small EPL gaps amplify, while large EPL gaps dampen the reaction of unemployment. In a subsequent empirical analysis, I find that the model’s predictions are consistent with panel data for a large set of OECD countries. Uncovering the non-linear course of unemployment volatility helps reconcile previous divergent research results.

Optimal monetary policy in developing countries: The role of informality

In this paper, I analyze optimal monetary policy in developing countries whose labor markets are characterized by the presence of a large informal sector. I develop a closed economy model with nominal price and wage rigidities, search and matching frictions, and a dual labor market: a formal one characterized by matching frictions and nominal wage rigidities, and an informal one where wages are fully flexible. Under this framework, a trade-off between price and wage inflation emerges. I find that informality increases the response of price and wage inflation to aggregate productivity shocks. As a result, the presence of an informal sector increases the inefficient fluctuations of labor market variables, such as unemployment, labor market tightness, and formal hiring rate. I find that optimal policy with informality features significant deviations from price stability in response to aggregate productivity shocks.