What Brazil learned from labour flexibilization in the 1990s

The debt crisis of 1981–83 changed the course that Brazil's social and labour policy had followed from the 1930s to the 1970s. The social and labour protection systems built up over those five decades – in conjunction with urbanization, industrialization and the rise of wage employment – were gradually dismantled. The neo‐liberal policies adopted, however, failed to generate sufficient economic growth and brought worsening unemployment and job insecurity instead. Since the end of 2002, Brazil has been turning away from its “neo‐liberal society “project.     

Economic growth,labour flexibilization and employment quality in Colombia, 2002–11

Over the period 2002–11, the Colombian labour market saw a marked improvement in employment opportunities, accompanied by an increase in nonstandard forms of employment. The authors look at how this affected employment quality, using a composite index based on Categorical Principal Components Analysis (CATPCA). They observe a small but widespread improvement in employment quality – mainly for self‐employed women – brought about by higher earnings, increased social protection and less time‐related underemployment. However, a considerable “quality deficit” remains, which calls for policies to strengthen labour market institutions and stimulate productivity and investment.     

Photographs of young generations on the Dutch labour market

In the light of the decline of “standard” employment relationships in many countries and its particular effect on young people, this article provides a detailed analysis of the labour market trajectories of early-career workers in the Netherlands between 1985 and 2014, adopting the approach of the sequence analysis of life-course events. Using two indicators for instability (entropy and turbulence), the authors find that cohorts that entered the labour market after 2000, and particularly in 2008, experience greater employment status instability despite the flexicurity policies applied. Transitions into stable employment are the exception rather than the rule.     

The labour market flexibility debate in India: Re‐examining the case for signing voluntary contracts

A major focus of India's ongoing policy debate over labour market flexibilization has been the statutory requirement that firms employing 100 or more workers cannot dismiss employees without prior government permission. The case for repealing that requirement (or greatly increasing the workforce threshold) is notably underpinned by Basu, Fields and Debgupta (2009). Here, the author challenges their particular theoretical argument for hiring and firing at will based on the voluntary signing of contracts, demonstrating that their general policy conclusion is logically unsustainable even within the framework of that model. The case for labour market flexibilization through voluntary contracting thus remains unfounded.     

Shifting the Beveridge curve: What affects labour market matching?

This article explores short‐run determinants of the matching between labour demand and supply by identifying shifts in the Beveridge curves for 12 OECD countries between 2000Q1 and 2013Q4. Using three complementary methodologies (visual examination, cointegration techniques and non‐linear estimations), we find that labour force growth and employment protection legislation reduce the likelihood of outward shifts, and the higher the share of employees with intermediate levels of education and the long‐term unemployment, the more difficult the matching process. Active labour market policies (such as incentives for start‐ups or job‐sharing programmes) could facilitate matching, while passive policies (unemployment benefits or labour taxation) make matching significantly more difficult.     

Youth earnings and labour market volatility in Europe

The authors provide new evidence on youth earnings and labour market volatility, including flows into and out of employment, across Europe during the Great Recession. EU‐SILC data for the period 2004–13 reveal large disparities in volatility levels and trends across European countries. As expected, the Great Recession increased youth labour market volatility, offsetting the trends observed over the previous years of economic prosperity. A variance decomposition exercise points to greater exposure to worker turnover in southern Europe. Fixed effects regression on labour market institutions relates higher unemployment benefits and more stringent employment protection legislation to lower earnings and labour market volatility.     

The World Bank's “Employing Workers” index: Findings and critiques – A review of recent evidence

This note provides an update on the ongoing debate over the World Bank's Doing Business project with a particular focus on its “Employing Workers” index, which is intended to measure difficulty of hiring, rigidity of working hours and difficulty of firing. The authors review the findings of studies that have used this index or been influenced by it and of those that inspired its construction. They go on to examine criticisms of this instrument, highlighting both conceptual and empirical problems. Their paper concludes with suggestions for alternative approaches and future research.     

Labour market regulations and high quality employment in EU-15 countries

The elements that we usually include under the concept of “labour market institutions” exert a clear influence on the workings of the labour market. However, the assessment of labour market policies and institutions remains mostly focused on their impact on the quantity of jobs, while people’s well-being depends crucially on how good their jobs are. This paper is a modest attempt to contribute some evidence and insight to the debate on the effects that particular institutional configurations have on the generation of high-quality employment.     

Toward managed flexibility: The revival of labour inspection in the Latin world

Examining the role of labour inspection in the context of the revival of labour market regulation, the authors distinguish between the Latin model, where inspectors have authority to tailor enforcement to firms' exigencies, and the less flexible United States approach. The Latin model can reconcile regulation with economic flexibility and transform inspectors into the shock troops of a campaign for decent work. But its vulnerability to arbitrary behaviour on their part needs to be addressed through: management of organizational cultures; exposure and sys‐tematization of the tacit knowledge underpinning inspectors' judgements; and research into the relationship between labour standards and business practices.     

Assessment of a hybrid reform path: Social and labour policies in Uruguay, 1985–2005

Since Uruguay's return to democracy in 1985, a shift in economic and social policy has radically changed the country. The outcomes have been shaped by adjustment to international circumstances “by default”, stop‐go market reforms and the inconsistent pace and content of reforms. Unlike other countries in the region, Uruguay has not followed a resolutely neo‐liberal course, but rather a hybrid one. The end result has been a liberal labour regime coupled with a three‐dimensional social policy balancing the market, the old corporatist welfare State and the new welfare state targeting specific beneficiaries.     

Measuring labour absorption problems in developing countries: Limitations of the concept of unemployment

The “standard” unemployment rate is often criticized for omitting large numbers of people who are classified as employed or as not economically inactive, when in fact their situation amounts to unemployment. The author discusses the limitations of this standard definition for developing countries. After reviewing the methodological and statistical problems posed by the standard rate, he looks at the reality behind the words in contexts where the labour market is highly segmented. He shows that the standard unemployment rate underestimates excess labour supply and is a poor indicator of the Decent Work deficit, and considers its limitations in guiding economic policy.     

The cost of "doing business" and labour regulation: The case of South Africa

The "Employing Workers" indices compiled from the World Bank's Doing Business (DB) survey for 2006 presented mixed results as to the nature and extent of labour regulation in South Africa. Arguing that these measures – with their narrow focus on legislation – provide only a partial picture, the authors suggest and investigate three possible extensions to the DB framework with the aim of achieving a more realistic representation of labour regulation in practice, namely: "micro-legislation", labour market institutions and judicial interpretation. They conclude with a plea for taking account of the crucial importance of these features in the assessment of labour regulation frameworks.     

Social networks and labour market outcomes in a meritocracy

This paper examines the significance of personal contacts in job searches, in the context of Singapore's meritocratic system. I show that in certain sectors, such as the state bureaucracy, social networking brings no distinct advantages as appointments are made exclusively on the basis of the academic credentials of the candidates. Thus, personal contacts are not always useful, especially in labour markets that rely heavily on the signalling role of academic credentials to match persons to jobs and allocate rewards. In contrast, personal contacts are more useful among less qualified job searchers in the private sector.     

The relationship between youth employment and older persons' employment in 20 OECD countries

Inspired by the “lump of labour” theory, a large number of OECD countries have encouraged the expansion of early retirement policies in response to rising unemployment since the 1970s. In reality, however, youth employment is found to be positively correlated with older persons' employment, although this is simply the overall finding for all OECD countries because most studies estimate average effects. Less is known about diversity in the relationship between youth employment and the employment of older workers. In order to help fill the research gap in this area, this study explores the heterogeneity of that relationship across 20 OECD countries.     

The OECD and the world market: antecedents of deep marketization

ABSTRACT

This paper documents the commitment of the OECD from its creation in 1961 to the continuous development of the world market along liberal lines. In doing so, it details a significant effort to promote what might be called proto-strategies of deep marketization across its ‘Northern’ advanced economy membership. These were articulated at key junctures: in its earliest years, then in response to the rise of the NICs (Newly Industrialized Countries) in the 1970s, again in the context of what it diagnosed as the crisis of the welfare state in the 1980s, and in a clutch of studies in the mid-1990s that anticipated and welcome the rise of China and other emerging economies. The argument made was always that sustainable growth in the advanced countries and the continued development of the world market as a whole could best be achieved if OECD members would abstain from protectionism, embrace competition and reform labour markets and social welfare in order to maintain and enhance their competitiveness in the global economy. Particular attention is drawn to the 1994 Jobs Study, which addressed the need for welfare and labour market reform in terms that foreshadowed the universal policies of deep marketization in evidence today.     

Off-farm labour decision of Canadian farm operators: Urbanization effects and rural labour market linkages

Understanding the factors affecting off-farm labour decisions of census-farm operators has significant implications for rural development and farm income support policy. We examine the off-farm labour decisions of Canadian farm operators using micro-level data from the 2001 Census of Agriculture combined with community level data from the 2001 Census of Population. While confirming some of the findings of previous research with respect to the effects of human capital and farm characteristics on off-farm work participation, this study shows the differential impact of those variables for operators of smaller and larger holdings. Family, community and regional characteristics appear more relevant in determining the joint decision to work off-farm and operate a smaller holding, compared to the decision to work off-farm and operate a larger farm. Results suggest that, once other factors are accounted for, proximity to urban centres does not have a positive effect on the joint decisions to participate in off-farm work and to operate a holding. This joint decision, in fact, is more related to the dynamics of the local labour market. A major implication of these findings is that while urban centers might represent an engine of growth for overall rural income through employment opportunities for the non-farm workforce, the non-farm income of farm operators is more likely to be affected by policy initiatives that address directly the dynamics of labour markets in the community where the operator lives.     

The fallacy of the lump of labour theory: Evidence for Latin America

In a context of population ageing, this article analyses the “lump of labour” theory using empirical evidence from Latin America. Instead of finding a crowding-out effect, estimations using a fixed effects model on a panel of annual data drawn from household surveys in 11 countries between 2002 and 2019 suggest a positive correlation between the employment rates of older adults and young people. Additionally, results show a positive association between the labour incomes of older and young workers. These findings could indicate that an expansion in the employment of older adults maintains economic growth and, therefore, a greater demand for labour, which could be supplied by young people.     

Regulation and the future of work: The employment relationship as an innovation facilitator

Digital transformation and the reorganization of the firm have given rise to new forms of work that diverge significantly from the standard employment relationship. Advocates of digital disruption suggest that the existing legal framework cannot accommodate “innovative” working templates and business models. This article, however, argues that labour regulation can continue to facilitate innovation, presenting the employment relationship as a flexible instrument, and standard forms of employment as the means of achieving efficiencies and cost advantages. First, they allow for the full exercise of managerial prerogative and attendant internal flexibility in workforce deployment, and, second, they constitute an effective device to deliver training and develop skills.     

Enforcement matters: The effective regulation of labour

The distinction between de jure and de facto regulation is well understood in theory, but has rarely been applied to cross‐country empirical work on the impact of labour regulation on labour market outcomes for lack of data. Policy debate has been based on measures of stringency of law, suggesting a negative correlation between labour regulation and labour market outcomes. This article provides new cross‐country measures of labour law enforcement and evidence of a negative correlation between stringency and intensity of enforcement. Previous results concerning the consequences of labour regulation and the legal origins theory no longer hold when a measure of effective labour regulation is used.