scholarly journals The partisan politics of employment protection legislation: Social democrats, Christian democrats, and the conditioning effect of unemployment

2021 ◽  
pp. 1-20
Author(s):  
Reimut Zohlnhöfer ◽  
Linda Voigt
Keyword(s):  
Labour Market ◽  
Golden Age ◽  
Temporary Employment ◽  
Employment Protection ◽  
Partisan Politics ◽  
Employment Protection Legislation ◽  
Social Democrats ◽  
Regular Employment ◽  
Protection Legislation ◽  
The Government

Abstract Political parties are likely to hold differing views about employment protection legislation (EPL). While pro-welfare parties could support EPL, pro-market parties might focus on labour market deregulation. In this paper, we investigate empirically whether partisan politics, especially the government participation of Social democrats and Christian democrats, matter for EPL in 21 established OECD countries from 1985 to 2019. We show that during the golden age of the welfare state, the level of EPL was much higher where Social and Christian democrats dominated the government than elsewhere. After the golden age and under conditions of high unemployment, these unconditional effects mostly disappeared. Instead, the level of unemployment conditions partisan differences. Christian democrats liberalize EPL for regular employment significantly less than other parties under high levels of unemployment. In contrast, Social democrats defend high levels of EPL for regular and temporary employment when unemployment is low. Against expectations, they even liberalize employment protection for labour market insiders more than other parties at very high levels of unemployment.

scholarly journals Temporary Contracts, Employment Trajectories and Dualisation: A Comparison of Norway and Sweden

2021 ◽  
pp. 095001702110314
Author(s):  
Tomas Berglund ◽  
Roy A Nielsen ◽  
Olof Reichenberg ◽  
Jørgen Svalund
Keyword(s):  
Labour Market ◽  
Labour Force ◽  
Temporary Employment ◽  
Employment Protection ◽  
Employment Protection Legislation ◽  
Permanent Employment ◽  
Employment Trajectories ◽  
Dead End ◽  
Protection Legislation ◽  
Strict Regulation

This study compares the labour market trajectories of the temporary employed in Norway with those in Sweden. Sweden’s employment protection legislation gap between the strict protection of permanent employment and the loose regulation of temporary employment has widened in recent decades, while Norway has maintained balanced and strict regulation of both employment types. The study asserts that the two countries differ concerning the distribution of trajectories, leading to permanent employment and trajectories that do not create firmer labour market attachment. Using sequence analysis to analyse two-year panels of the labour force survey for 1997–2011, several different trajectories are discerned in the two countries. The bridge trajectories dominate in Norway, while dead-end trajectories are more common in Sweden. Moreover, the bridge trajectories are selected to stronger categories (mid-aged and higher educated) in Sweden than in Norway. The results are discussed from the perspective of labour market dualisation.

scholarly journals Importance of Employment Protection and Types of Employment Contracts for Elasticity of Employment in the OECD Countries

2014 ◽  
Vol 17 (1) ◽  
pp. 21-44
Author(s):  
Eugeniusz Kwiatkowski ◽  
Przemysław Włodarczyk
Keyword(s):  
Labour Market ◽  
Economic Crisis ◽  
Oecd Countries ◽  
Employment Protection ◽  
Employment Protection Legislation ◽  
Real Wages ◽  
Market Institutions ◽  
Employment Contracts ◽  
Protection Legislation ◽  
The Impact

This article presents the impact of the global crisis on employment in the OECD countries, and in particular is an attempt to explain why the impact is of a different scope in particular countries. Particular attention has been paid to the question of the role played by labour market institutions (such as employment protection legislation and fixed-term employment). The global economic crisis has influenced the situation in the labour markets of OECD countries, causing declines in employment and increases in unemployment. Changes in the level of employment in individual countries varied. Between 2007-2012 declines in production took place in the majority of OECD countries. Declines in real wages were also observed in those countries. On the other hand, in the period of 2005-2012 relatively small changes in labour market institutions occurred. With respect to both the stringency of employment protection legislation, as well as the share of fixed-term employment, there were no clearly visible trends in the data during the period of economic crisis. The econometric verification of theoretical hypotheses was performed using annual data from the 2005-2012 period for 26 OECD countries, and it shows that GDP and real wages were statistically significant determinants of employment size in the analyzed period. The study also confirmed the hypothesis of the existence of a non-linear (U-shaped) relationship between employment elasticity with respect to GDP and the level of stringency of employment protection legislation, as well as the share of fixed-term employment in the total number of employment contracts. The results show that the smallest declines in employment during a crisis might be expected in countries where the level of EPL is close to 2, and the share of fixed-term employment in the total number of employment contracts is close to 18%.

scholarly journals Labour market flexibilization and income distribution in Europe

2021 ◽  
Vol 68 (2) ◽  
pp. 167-185
Author(s):  
Philips Arestis ◽  
Jesús Ferreiro ◽  
Carmen Gómez
Keyword(s):  
Income Distribution ◽  
Labour Market ◽  
Positive Impact ◽  
Employment Protection ◽  
Employment Protection Legislation ◽  
Temporary Workers ◽  
Real Wages ◽  
Income Share ◽  
Labour Income ◽  
Protection Legislation

This paper analyses the role played by the flexibilization of labour markets on functional income distribution. Specifically, we analyse whether employment protection legislation affects the evolution of labour income share, measured by the size of compensation of employees as a percentage of GDP, the sum of wages and salaries as a percentage of GDP and the size of the adjusted wage share, in twenty European economies. Our study?s results show that the evolution of labour income share is explained by the economic growth, the growth of employment and unemployment rates, and the growth of real wages. Regarding the role played by the flexibility of the labour market, and specifically of the employment protection legislation, only employment protection for temporary workers has a significant impact on the evolution of labour shares. Our results show that stricter provisions on the use of fixed-term and temporary agency contracts have a positive impact on the growth of labour shares.

scholarly journals Knockin’ on heaven’s door? Reframing the debate on temporary employment and wages: evidence from Europe

2019 ◽  
Author(s):  
Daniela Bellani ◽  
Giulio Bosio
Keyword(s):  
Dynamic System ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Age Groups ◽  
Temporary Employment ◽  
Employment Protection ◽  
Employment Protection Legislation ◽  
Institutional Settings ◽  
Protection Legislation ◽  
Permanent Workers

Abstract This article reframes the debate on the consequences of flexibilization in European labour markets focusing on the unexplored impact of temporary employment on occupational wages for permanent workers. Exploiting the variation in the temps’ density within occupation and age groups across European countries between 2003 and 2010, we find that temporary contracts negatively affect occupational average wages for insiders’ workers. These results are still robust using a dynamic system based on generalized method of moments (GMM-SYS) to account for potential endogeneity issues. We also explore the existence of heterogeneity across different occupational clusters and institutional settings. Our estimates indicate that the knock-on effect is large in countries with low employment protection legislation and it is driven by occupations characterized by untechnical work logics.

Quiet Politics of Employment Protection Legislation? Partisan Politics, Electoral Competition, and the Regulatory Welfare State

2020 ◽  
Vol 691 (1) ◽  
pp. 206-222
Author(s):  
Linda Voigt ◽  
Reimut Zohlnhöfer
Keyword(s):  
Political Parties ◽  
Welfare State ◽  
Electoral Competition ◽  
Party Competition ◽  
Employment Protection ◽  
Partisan Politics ◽  
Employment Protection Legislation ◽  
Political Debate ◽  
Protection Legislation ◽  
Established Democracies

Political parties and party competition have been important factors in the expansion and retrenchment of the fiscal welfare state, but researchers have argued that regulatory welfare is not part of political debate among parties. We explore this claim theoretically, and then empirically examine it in the case of employment protection legislation (EPL) in twenty-one established democracies since 1985. EPL is a mature and potentially salient instrument of the regulatory welfare state that has experienced substantial retrenchment. We test three prominent mechanisms of how electoral competition conditions partisan effects: the composition of Left parties’ electorates, the strength of pro-EPL parties, and the emphasis put on social justice by pro-EPL parties. We find that the partisan politics of EPL is conditioned by electoral competition under only very specific circumstances, namely when blame sharing becomes possible in coalitions between EPL supporters.

scholarly journals Complementarities between Labour Market Institutions and their Causal Impact on Youth Labour Market Outcomes

2020 ◽  
Vol 20 (3) ◽  
Author(s):  
Niall O’Higgins ◽  
Giovanni Pica
Keyword(s):  
Labour Market ◽  
Employment Protection ◽  
Employment Protection Legislation ◽  
Policy Reforms ◽  
Market Institutions ◽  
Market Outcomes ◽  
Labour Market Institutions ◽  
Protection Legislation ◽  
Labour Market Outcomes ◽  
The Impact

AbstractWe analyse theoretically and empirically the effects on young people’s labour market outcomes of two specific labour market institutions and their interaction: employment protection legislation and active labour market policy. The paper examines recent policy reforms in Italy focussing on the impact of the 2012 Fornero reforms of employment protection legislation as well as the initial impact of the EU-wide Youth Guarantee scheme introduced in Italy in March 2014. The paper then examines how these two policy reforms interacted. The analysis first confirms the finding that the Fornero reform increased permanent hires particularly amongst the very youngest workers; it then goes on to find that the YG was indeed successful in increasing the hires of young people, although this operated through a statistically significant increase in female hires on temporary contracts. Third, it finds some evidence of a dampening effect of the YG on EPL reforms as predicted by theory.

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