Fischer, Justina A.V. and Somogyi, Frank (2012): Globalization and protection of employment.
Download (315Kb) | Preview
Unionists and politicians frequently claim that globalization lowers employment protection of workers. This paper tests this hypothesis in a panel of 28 OECD countries from 1985 to 2003, differentiating between three dimensions of globalization and two labor market segments. While overall globalization is shown to loosen protection of the regularly employed, it increases regulation in the segment of limited-term contracts. We find economic and political globalization to drive deregulation for the regularly employed, while political and social integration appear responsible for the better protection of workers in atypical employment, outweighing the negative effect of economic integration. We offer political economy arguments as explanations for these differential effects on labor market legislation.
|Item Type:||MPRA Paper|
|Original Title:||Globalization and protection of employment|
|Keywords:||Globalization; International trade; Employment protection; Labor standards|
|Subjects:||F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions
F - International Economics > F1 - Trade > F15 - Economic Integration
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J68 - Public Policy
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C33 - Models with Panel Data; Longitudinal Data; Spatial Time Series
|Depositing User:||Justina AV Fischer|
|Date Deposited:||13. Jun 2012 13:18|
|Last Modified:||26. Feb 2013 03:54|
Aidt, T. S., Gassebner, M., 2010. Do autocratic states trade less? World Bank Economic Review 24 (1), 38–76.
Beck, T., Clarke, G., Groff, A., Keefer, P., Walsh, P., 2001. New tools in comparative political economy: The database of political institutions. World Bank Economic Review 15 (1), 165–176.
Bhagwati, J., Srinivasan, T. N., 1995. Trade and the environment: Does environmental diversity detract form the case for free trade? In: Bhagwati, J., Hudec, R. E. (Eds.), Fair Trade and Harmonization: Prerequisites for Free Trade? Cambridge: MIT Press, pp. 159–223.
Bjørnskov, C., 2008. The growth-inequality association: Government ideology matters. Journal of Development Economics 87 (2), 300–308.
Blau, F. D., Kahn, L. M., 1996. International differences in male wage inequality: Institutions versus market forces. Journal of Political Economy 104 (4), 791–836.
Brown, D. K., 2000. International trade and core labour standards: A survey of the recent literature. OECD Labour Market and Social Policy Occasional Papers 43, OECD, Directorate for Employment, Labour and Social Affairs.
Busse, M., 2004. The determinants of core labour standards: The case of developing countries. Economics Letters 83 (2), 211–217.
Busse, M., Spielmann, C., 2006. Gender inequality and trade. Review of International Economics 14 (3), 362–379.
Cigno, A., Rosati, F. C., Guarcello, L., 2002. Does globalization increase child labor? World Development 30 (9), 1579–1589.
Dewit, G., Görg, H., Montagna, C., 2009. Should I stay or should I go? Foreign direct investment, employment protection and domestic anchorage. Review of World Economics (Weltwirtschaftliches Archiv) 145 (1), 93–110.
Dreher, A., 2006. Does globalization affect growth? Evidence from a new index of globalization. Applied Economics 38 (10), 1091–1110.
Dreher, A., Gaston, N., 2005. Has globalisation really had no effect on unions? Kyklos 60, 165–186.
Fischer, J. A., 2012. The choice of domestic policies in a globalized economy. MPRA Paper 36990, University Library of Munich, Germany.
Fortin, N. M., Lemieux, T., 1997. Institutional changes and rising wage inequality: Is there a linkage? Journal of Economic Perspectives 11 (2), 75–96.
Franco, A., Winqvist, K., 2002. At the margins of the labor market? Women and men in temporary jobs in Europe. Statistics in Focus 13.
Gemmell, N., Kneller, R., Sanz, I., 2008. Foreign investment, international trade and the size and structure of public expenditures. European Journal of Political Economy 24, 151–171.
Golden, M., 2000. Economic integration and industrial relations: Is increasing openness bad for labor? Working Paper 1.62, University of Berkeley, Center for German and European Studies.
ILO, 2009. Rules of the Game: A Brief Introduction to International Labour Standards (Revised edition 2009). International Labour Organization, Geneva.
Krueger, A., 1996. Observations on international labor standards and trade. NBER Working Papers 5632, National Bureau of Economic Research.
Kucera, D., 2002. Core labour standards and foreign direct investment. International Labour Review 141, 3–36.
Lamo, A., Pérez, J. J., Schuknecht, L., 2008. Public and private sector wages, co-movement and causality. OECD Working Paper Series 963, OECD.
Mayer, W., Riezman, R. G., 1987. Endogenous choice of trade policy instruments. Journal of International Economics 23 (3-4), 377 – 381.
OECD, 2000. International trade and core labour standards. Organisation for Economic Cooperation and Development, Paris.
OECD, 2004. OECD Employment Outlook 2004. Organisation for Economic Co-operation and Development, Paris.
OECD, 2009. Economic outlook: Annual and quarterly data. Organisation for Economic Cooperation and Development, Paris.
Petersen, N., 2009. Rational choice or deliberation? Customary international law between coordination and constitutionalization. Journal of Institutional and Theoretical Economics 165 (1), 71–85.
Protte, B., 2011. Does fleet street shape politics? How newspaper reporting on globalization changes the support for unemployment insurance. mimeo.
Rodrik, D., 1996. Labor standards in international trade: Do they matter and what do we do about them? In: Council, O. D. (Ed.), Emerging Agenda for Global Trade: High Stakes for Developing Countries. Lawrence, Robert Z., Dani Rodrik and John Whalley, Washington, DC, p. 35–79.
Shelburne, R. C., 2001. An explanation of the international variation in the prevalence of child labour. The World Economy 24 (3), 359–378.
Sinn, H.-W., 2001. Social dumping in the transformation process. NBER Working Papers 8364, National Bureau of Economic Research.
Statistisches Bundesamt, 2009. Niedrigeinkommen und Erwerbstätigkeit: Begleitmaterial zum Pressegespr¨ach am 19. August 2009 in Frankfurt am Main.
Stein, A., 1980. The politics of linkage. Worlds Politics 33, 62–81.
Stern, R. M., 2003. Labor standards and trade agreements. Working Papers 496, Research Seminar in International Economics, University of Michigan.
Tiebout, C. M., 1956. A pure theory of local expenditures. Journal of Political Economy 64 (5), 416–424.
Wallerstein, M., Western, B., 2000. Unions in decline: What has changed and why? Annual Review of Political Science 3, 355–77.
Walter, S., 2010a. Globalization and the demand-side of politics: How globalization shapes individual perceptions of labor market risk and policy preferences. mimeo.
Walter, S., 2010b. Globalization and the welfare state: Testing the microfoundations of the compensation hypothesis. International Studies Quarterly 54 (2), 403–426.
World Bank, 2009. World Development Indicators. CD-ROM edition.