National Labor Market Institutions Research Articles

Skill Specificity on High-Skill Online Gig Platforms: Same as in Traditional Labour Markets?

Abstract Political economists and labour sociologists alike have studied how the skill specificity of workers can be explained, as it significantly affects workers’ performance. However, the emergence of the gig economy may substantially change skill hiring and specificity in online labour markets because gig workers do not need formal educational credentials to offer their services. Instead, skills are “unbundled” from occupations, and platforms provide alternative ways to signal competencies, for example, via their rating and review systems. To shed light on the applicability of existing theories to explain the skill profiles of gig workers, we examine what predicts the skills hired in the online gig economy. Based on multilevel ordinal logistic regression analyses of 2336 gig worker profiles, we show that—as in traditional labour markets—gig workers with a vocational degree and longer online work experience are hired for more specific skills. However, national labour market institutions and educational systems affect the gig workers’ skill specificity in the opposite direction than in traditional labour markets. Our findings thus suggest that online gig platforms allow workers to overcome restrictions imposed by national institutions as they are hired for those skills in the online gig economy that are institutionally less facilitated in their home labour markets.

Rising between-workplace inequalities in high-income countries

It is well documented that earnings inequalities have risen in many high-income countries. Less clear are the linkages between rising income inequality and workplace dynamics, how within- and between-workplace inequality varies across countries, and to what extent these inequalities are moderated by national labor market institutions. In order to describe changes in the initial between- and within-firm market income distribution we analyze administrative records for 2,000,000,000+ job years nested within 50,000,000+ workplace years for 14 high-income countries in North America, Scandinavia, Continental and Eastern Europe, the Middle East, and East Asia. We find that countries vary a great deal in their levels and trends in earnings inequality but that the between-workplace share of wage inequality is growing in almost all countries examined and is in no country declining. We also find that earnings inequalities and the share of between-workplace inequalities are lower and grew less strongly in countries with stronger institutional employment protections and rose faster when these labor market protections weakened. Our findings suggest that firm-level restructuring and increasing wage inequalities between workplaces are more central contributors to rising income inequality than previously recognized.

The limits of differentiation: capitalist diversity and labour mobility as drivers of Brexit

Differentiation is an institutional response to internal heterogeneity within the European Union. Its success as a stabilization strategy for the EU reaches its limits when faced with the tensions between the EU’s common rules and the diversity of national capitalisms in Europe. The article focuses on one such tension, namely between the EU’s rules on freedom of movement and national labour market institutions, illustrating this tension by analysing the case of the UK. The article argues that the socio-economic effect of migration was felt principally in the impact on skill formation and in the changing factor inputs of British businesses. It argues that these effects contributed to the vote for Brexit. The centrality of freedom of movement to our understandings of EU citizenship and to the integrated nature of the European common market makes it very unlikely that differentiation will be pursued as a response to the tensions arising from intra-EU labour mobility. This article argues that unless differentiation is considered in the area of the “four freedoms”, the tensions produced by the diversity of European capitalism may lead to more disintegration in the future.

The Transition to the Knowledge Economy, Labor Market Institutions, and Income Inequality in Advanced Democracies

AbstractThe transition from Fordism to the knowledge economy in the world’s advanced democracies was underpinned by the revolution in information and communications technology (ict). The introduction and rapid diffusion ofictpushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their own talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; income in the Anglo-Saxon countries remains particularly unequally distributed. To shed new light on this puzzle, the authors carry out a panel data analysis of eighteenoecdcountries between 1970 and 2007. Their analysis stands apart from the existing empirical literature by taking a comparative perspective. The article examines the extent to which the relationship between the knowledge economy and income inequality is influenced by national labor market institutions. The authors find that the expansion of knowledge employment is positively associated with both the 90/10 wage ratio and the income share of the top 1 percent, but that these effects are mitigated by the presence of strong labor market institutions, such as coordinated wage bargaining, strict employment protection legislation, high union density, and high collective bargaining coverage. The authors provide robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy.

Team formation processes in new ventures

While entrepreneurship research theorizing about the team formation in start-up ventures exists, such studies mostly focus on different outcomes of team formation, for example the number of employees. Questions about how team formation processes unfold and the factors, such as labor-market institutions, influencing their evolvement remain unanswered. To address this research gap, we analyze the venture creation processes of 344 ventures in Germany and the USA, offering particularly typical examples of countries with regulated and deregulated labor-market institutions respectively. Based on optimal matching techniques, we illustrate how team formation processes differ over time in terms of founder and employee involvement and the hiring of service providers. Furthermore, we use binary logistic regressions to identify the extent to which national labor-market institutions account for these differences.

How Does the Preference to Work in Family Firms Depend on National Labor Market Institutions?

Family firms need to attract talented non-family employees to stay competitive. We argue that the role of the image of family firms as employers and the preference to work in family firms depend on the specific labor market context. Using a multi-level, cross-country dataset of 12,150 individuals in 40 countries, we find that hiring and firing practices, the degree of employer-employee cooperation, and the flexibility of wage determination influence the individual prefer-ence for working in family firms. Our paper contributes to prior research by introducing a labor market institutions perspective and has practical implications for family firms seeking to hire new employees.

Regional Labor Market Performance in Europe

The labor market effects of the recent financial and economic crisis are rather heterogeneous across countries and regions. Such differences in labor market performance among industrialized countries are an issue of ongoing research. The objective of this article is to analyze labor market disparities among European regions and to provide evidence on the factors behind these differences. Whereas previous research focused on the effects of national labor market institutions, we also take structural characteristics of regions into account and investigate differences in labor demand responsiveness and their potential determinants. The data set covers the Nomenclature des unités territoriales statistiques 2 regions in the EU15 for the period 1980 to 2008. We employ an error correction model that is combined with spatial residual correlation. Our findings point to substantially distinct wage and output elasticities of employment among European countries and regions. Moreover, the rate of adjustment to disequilibrium is subject to significant variation across units of observation. There is robust evidence that labor market institutions affect the adjustment speed of regional labor markets and the wage elasticity of employment. Moreover, the findings suggest that some characteristics of regional labor markets matter as well. However, corresponding results are less robust compared with the evidence on labor market institutions.

Older Worker in National Contexts: A Japan-US Comparison

National contexts are crucial determinants of older worker labor force participation. This paper clarifies the main differences between the national contexts surrounding older workers in Japan and the United States. These two countries commonly represent large-scale, industrialized, and mature economies with increasing demographic pressures to prolong the working lives of older adults. Despite the similarities, differences are found between these two national contexts in at least four major areas: (1) the level of demographic pressure to increase older worker labor supply; (2) national labor market institutions affecting employment security in later life; (3) the role of government in promoting older persons’ labor force participation; and (4) the labor force compositions (specifically, the fraction of older workers who are self-employed). Labor force participation rates among older workers are substantially higher for Japan than for the United States. Differences in each of the four areas discussed in this paper help to explain why workers in Japan remain in the labor force longer than do those in the United States.

Determinants of Executive Incentive Pay in Europe

In this paper we study possible determinants of the use of incentive pay for managers in European companies. Data from 5,000 firms in 15 countries are used to analyze the degree to which incentive pay is associated with national embeddedness, local labour market institutions, ownership, and internationalization of markets. We find that companies in countries with high scores on power distance and individualism tend to use incentive schemes for managers more frequently than companies with lower scores on these cultural dimensions. Centralized wage bargaining and unionization at the firm level tend to reduce the prevalence of such schemes. Incentive pay is less common in state-owned companies than in privately owned firms. The findings also reveal that the more global the market in which a firm operates, the greater the probability that it will implement incentive pay elements for its managers. Our results suggest that unions, national labour market institutions and social and cultural norms serve as buffers against the introduction of US-style compensation systems. _______________________________________________________________________________________ Denne artikkelen er lastet ned fra www.idunn.no. Reproduksjon eller annen videreformidling av artikkelen er ikke tillatt uten avtale med rettighetsforvalter. (PUBLISHER NOT AVAILABLE) , 1-14

Being Unemployed: Masculinity, Change Competence and Identity

The paper looks into experiences of redundancies of steelworkers in the UK and in Germany. It analyses how workers coped with redundancy and what helped them in professional re-orientation. While the politics of national labour market institutions influenced by the European Union’ policies claim that only training can improve workers’ employability and thus their chances to find new employment, this paper takes a look at the broader context in which employability is gained. Employability we learn from the experiences of steelworkers is not about qualifications alone but about change competence, gender and identity, it is about social structures in working life and private life. Especially the ability to accept a change in the gender order, and to distant oneself to perceive the employment world as the only ways to claim for its own masculinity seems to be a pre-condition for employability in case of steelworkers. Participation in social life beyond the working life, a better work-life balance and a reconciliation of work and family life is needed to improve employability. This inclusive conception of employability calls for a wider understanding of the narrow definition of employability as introduced by the European Commission in relation to labour market change. The answer lies as much outside the workplace as within. The paper is based on biographical research with steelworkers in Germany and the UK and it uses Bourdieu’s field analysis as a theoretical framework.

Does globalization lead to a rat race of national labor-market institutions?

Since just around 30 years we observe that the labor?s share of the national income decreases in most countries. In this paper, we introduce an endogenous overlapping generation growth model with an institutional setting of the labor market to show that the changes of the labor-market institutions are one main reason for the decrease of the labor?s share. These changes are mainly caused by the increasing globalization resulting in open capital markets and as a consequence in a competition between countries with respect to the labor-market institutions. In the long run, all will suffer. The only ways to stop this rat race are capital controls or international agreements on the labormarket institutions.

Wage Subsidies and International Trade: When Does Policy Coordination Pay?

National labour market institutions interact across national boundaries when product markets are global. Labour market policies can thus entail spill-overs, which suggests that there are benefits from international policy coordination. This paper studies the effects of wage subsidies in an international duopoly model with unionised labour markets. The authors document both positive and negative spill-over effects and discuss the benefits and costs from international policy coordination both for the case of symmetric and asymmetric labour market institutions. The results suggest that institutional differences could sign responsible for the slow speed at which labour market policy coordination has progressed so far.

Human Capital Externalities in Western Germany

Using panel data and employing instrumental variables we show that regional wage differences across German regions are partly attributable to localized human capital externalities. This finding is stable across different indicators for regional aggregate education and robust to agglomeration, wage curve, price level and amenity effects. A comparison of our results with Moretti's findings for the USA suggests that national labour market institutions influence the distribution of wage gains from aggregate regional education among workers of different educational backgrounds. An analysis by sector reveals that human capital externalities are generally more pronounced in manufacturing than in the service sector. Externalités des ressources humaines en Allemagne de l'Ouest Résumé En utilisant des données pluridimensionnelles et en faisant usage de variables instrumentales, nous sommes en mesure de démontrer que les différences salariales régionales dans les différentes régions d'Allemagne sont attribuables, en partie, à des externalités en ressources humaines localisées. Cette conclusion est stable dans les différents indices pour l’éducation globale à l’échelon régional, et solide sur le plan de l'agglomération, des courbes salariales, des niveaux de prix, et des facteurs d'agrément. Une comparaison entre nos résultats et les conclusions de Moretti, pour les États-Unis, indique que les institutions nationales du marché du travail influent sur la distribution des gains salariaux découlant de l’éducation régionale globale parmi des travailleurs provenant de différents milieux éducatifs. Une analyse par secteur révèle que les externalités de ressources humaines sont généralement plus prononcées dans le secteur industriel que dans le secteur tertiaire. Factores exógenos del capital humano en Alemania Occidental Resumen Utilizando datos de panel y empleando variables instrumentales, demostramos que las diferencias salariales interregionales alemanas pueden atribuirse en parte a factores exógenos de capital humano confinados. Esta conclusión es estable entre los diferentes indicadores del acumulado regional de educación y consistente ante los efectos de la aglomeración, curva salarial, nivel de precios y servicios públicos. Una comparación de nuestros resultados con las conclusiones de Moretti relativas a los EE.UU., sugiere que las instituciones asociadas con el mercado laboral nacional ejercen influencia sobre la distribución de las ganancias salariales del acumulado de educación regional entre los trabajadores de los diferentes niveles de estudio. Un análisis por sector revela que los factores exógenos de capital humano son, en términos generales, más pronunciados en el sector de producción que en el de servicios.

Growth, unemployment and labour market institutions: evidence from a cross-section of EU regions

The responsiveness of unemployment to growth is an issue of ongoing political and academic interest. Economic growth is supposed to be the key to increase labour demand and reduce unemployment. Departing from Okun's law, most research on the unemployment intensity of growth has focused on national disparities and the role of labour market institutions. Empirical evidence at the regional level is scarce. We investigate differences in regional labour market responsiveness and their potential determinants for a cross section of European regions. The data set covers the NUTS 2 regions in the EU15 for the period 1980 to 2002. Following a spatial modelling approach interaction among neighbouring labour markets is taken into account. Our findings point to substantial differences in labour market effects of output growth among European countries and regions. Both national labour market institutions and regional characteristics, such as structural change explain a significant part of these disparities.

Delivering Flexibility: Contrasting Patterns in the French and the UK Food Processing Industry

AbstractThis article provides a comparative analysis of changes in numerical and functional labour flexibility in the French and the UK food processing industry. Based upon case study data, it explores the interaction between competitive pressures and institutional and regulatory structures and their impact on workplace practices. The findings indicate that, faced with a similar competitive environment, firms in both countries have sought to increase labour flexibility. However, the predominant forms of flexibility vary across the two countries, partly reflecting the characteristics of national labour market institutions. Numerical flexibility dominates in the UK, with high levels of paid overtime and temporary agency work. In contrast, French workplaces rely more on internal functional flexibility while also achieving numerical flexibility through seasonal variations in work schedules and a wide range of short‐term employment contracts.

National Labor Market Institutions and the EU Integration Process

Giuseppe Bertola (Universita di Torino and EUI) February 14, 2004 This paper outlines theoretical insights regarding the motivation and effects of labor market institutions, and reviews empirical studies of relevant evidence from European and other countries’ historical experience. Institutional interference with

Beyond National Institutions: Labor Taxes and Regional Unemployment in Italy

By focusing on the Italian experience, we ask whether the relationship between labour taxes and unemployment varies across regions. In spite of similar national labour market institutions, we show that this relationship is significantly stronger in the highly industrialised North than in the underdeveloped South, where unemployment is much higher. An important source of variation in the regional responsiveness of unemployment originates from the fact that regional gross wages in the North increase more than in the South in response to a hike in labour taxes. Regional wage setting affects regional employment (and unemployment) both directly and indirectly, via its impact on regional profits and the capital stock.

National Labour Market Institutions and the European Economic and Monetary Integration Process

AbstractThis article investigates the role of national labour market institutions for the chances of successful transition to Economic and Monetary Union (EMU) in Europe, as well as for its viability. The conclusions are rather pessimistic. Although overlooked by the Maastricht Treaty, the need for real convergence (convergence of unemployment rates) is emphasized as a major condition for success. However, current labour market institutions in the EU make it quite unlikely that this condition will be fulfilled. We show that the implementation of the Maastricht programme may instead turn into an obstacle to monetary unification.