A Structural Approach to the European Labour Market

The structure of the European labour market is highly differentiated by geo-graphical area. If the 1992 integration is likely to induce short-medium term adjustment effects on employment, these will mostly affect regional labour markets. Negative adjustments will follow different distribution patterns, probably exacerbating current regional disequilibria. On the other hand, still little known are the geographical features of the European economic, social and production structures. Although many studies have recently concentrated on the analysis of local labour markets, few of them have addressed the issue of Community regions. Through multivariate and cluster analyses of structural data on regional labour markets, the paper offers a confirmation of the explanatory power of local market analysis, as applied to the European area. The structural features of each elementary area are captured by three factors only that allow the construction of a coherent classification of EEC regions in four major clusters. This classification is used to identify the “weak areas” that, after a reconsideration in unified terms of European cooperation policies, should be the object of new development interventions.     

Real versus Nominal Convergence: National Labour Markets and the European Integration Process

ABSTRACT: This paper investigates the role of national labour market characteristics for the chances of successful transition to 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 (I e convergence of real macroeconomic variables like unemployment) is emphasized as a major condition for success However current labour market characteristics in the EC make it quite unlikely that this condition will be fulfilled We show that the implementation of the Maastricht programme might turn into an obstacle to monetary unification     

基于欧洲主权债务危机背景下的金融传染分析

运用向量自回归方法(VAR)和时变多元GARCH模型(DCC-MGARCH),检验欧洲主权债务危机期间的金融传染效应。研究市场包括希腊、西班牙、爱尔兰、英国、法国、德国、美国、日本以及中国的股票市场。实证结果表明,欧洲债务危机期间各国金融市场间相关性显著上升,市场间影响程度更大、影响时间更长,存在金融传染效应;希腊是此次危机的传染源,欧洲其他国家之间的传染效应不明显;蔓延期中国股票市场也与欧洲市场存在联动性,但影响较为滞后。此外,研究发现直至2009年4月,美国次债危机的影响才基本消退。分析表明历年巨额的财政支出和较差的经济自愈能力是欧洲主权债务危机发生的主要原因。     

Public Policy toward Employee Benefits in the United States,Canada and Taiwan:Lessons for European Integration

Abstract. Most governments intervene in the labor market to promote the provision of certain merit goods such as retirement income and health insurance. As economic integration has progressed within the European Community, questions have arisen concerning the harmonization of such benefits. Using case studies from three non-EC countries—the US., Canada, and Taiwan—the authors show that benefit structures and decisions reflect institutions which are difficult to change and whose patterns do not seem to reflect a simple economic determinism. The U.S. and Canada, two similar countries with integrated product markets, have adopted very different health insurance policies, but similar pension policies. Taiwan, despite its different stage of development, has a Canadian-style health insurance system and is currently grappling with how to arrange its pensions. A key outcome of the benefit-decision process is whether entitlements are external to the firm or contingent on maintaining a specific job attachment. An important factor in modifying benefit arrangements is the degree of social concertation present in national political systems. Benefits systems are best designed or reformed when institutions permit discussion of macro pressures. EC countries, now considering harmonization of economic institutions, have the opportunity to modernize their benefit arrangements. A related paper was presented to the Ninth World Congress of the International Industrial Relations Associations and its associated Study Group on Economic Policy and Social Concertation, Sydney, Australia, August 30-September 4, 1992.     

Labour Markets and Organisational Change: Future Working Structures for an Ageing Work Force

Flexible manufacturing systems, team work with decentralisation of decision-making, integration of tasks and multiple allocation across functional barriers demand a skilled work force prepared for continuous learning and adaptation. It is common to see a younger, well-educated and trained work force as being required for such a production environment. A closer empirical look at most of the internal labour markets in this study shows that existing labour market structures do not match this image. Existing labour markets consist very often of an older (and ageing) labour force with relatively low skills and with resistance to continuous training. These structural features have, over the last ten years — despite the existence of costly early retirement measures and new entries into internal labour markets — not much improved, and in many cases have even deteriorated. While age-related exit measures have contributed to maintaining sound corporate cultures in offering socially cushioned exit options and have also prevented internal labour markets from growing older too rapidly, they have — in the “lean employment environment” of mature industrial sectors — not led to a sustained restructuring of internal labour markets. The ending of many of the age-related exit measures owing to their impact on public and company budgets could lead to a growing mismatch between the structure of demand and the structure of supply in internal labour markets. This could have negative effects on company performance and increase the probability of unemployment for workers if no proactive policies for managing the age problem are introduced. Such proactive policies might consist of appropriate age-related training, age-related flexible working time and work organisation patterns. This revised version was published online in July 2006 with corrections to the Cover Date.     

Economic Integration,International Capital Movements,and Labour Standards

Abstract. The paper develops a model where more integration initiates a movement towards the bottom of labour standards when increased integration enhances the flow of capital and so increases the marginal gain of a reduction in the strictness of standards. Moreover, a Pareto improving common international standard with higher strictness than in the Nash equilibrium can be negotiated among countries with the same preference for employed worker protection versus social efficiency. When preferences differ between countries, an agreed common or minimum strictness of labour standards will typically not be Pareto improving, but to the detriment of the country that gives less weight to the protection of employed workers. However, in this case there is also a Pareto improving solution, which raises the strictness of labour standards compared to the Nash equilibrium for both countries, but at the same time accepts different country standards reflecting their different preference.     

Trade and Labour Markets: Vertical and Regional Differentiation in Italy

The labour market misfortunes of the less skilled and rapid growth of international trade in manufactured goods with less advanced countries are linked by the paradoxical observation that trade theorists are in the forefront of those denying the importance of trade in income distribution. This paper analyses this conclusion by stressing the importance of vertical differentiation of trade flows and regional differentiation of skills in order to identify labour market effects of trade integration. Vertical and regional differentiation in trade and labour markets are analysed for a country, Italy, where these two elements seem to play a crucial role. The results show a likely displacement effect on unskilled labour due to trade flows with less advanced countries. Given the characteristics of Italian trade and labour markets, a stronger trade‐induced displacement effect on demand for unskilled labour takes place in the North of the country. Thus the vertical differentiation in Italian intra‐industry trade is a warning against understating the effect of trade on labour markets if product heterogeneity is not adequately considered. The regional differentiation of skill intensity is another warning against understating the effect of trade on labour markets whenever cross‐sectoral effects and the change in relative specialization are not adequately considered.     

Taxes and Women in the Labour Force in a Southern European Country: The Case of Portugal

On looking at the female labour supply in Europe, it is immediately noticed that there is a large variation among countries. One possible explanation for this fact is that different countries have different tax policies, leading to variations in incentive and costs. This has been investigated in papers such as that of Gustafsson (1992a,b) for countries such as Germany and Sweden. The same exercise has been performed by the present authors for a low-income, southern European country, Portugal, which has one of the highest rates of female participation (out of line with neighbouring countries). Female labour supply does not seem to be very sensitive to fiscal policies, as those policies have only a small influence on the take-home wage. This result appears to be independent of the fact that the female labour supply shows a higher elasticity to wages than that which has been reported for other countries. The present authors also show that Portuguese women contribute a much larger proportion of family earnings than do their counterparts in Sweden and Germany, and that the Portuguese fiscal system is rather neutral. Further studies with data from other countries are needed in order to shed more light on the issue of tax harmonization.     

Effects of Regional Labour Markets on Migration Flows,by Education Level

European economies display large variations in unemployment rates across regions as well as between education groups. Insufficient labour mobility is widely believed to contribute to higher regional disparities and overall unemployment, but few studies have compared mobility responses of different education groups to regional shocks. This paper employs administrative registers covering the entire Norwegian population to compute annual time series from 1994 to 2004 of migration flows and regional labour market conditions by education level for 90 travel‐to‐work areas. We find that regional disparities in unemployment rates are decreasing in education level, whereas the response of migration flows to regional unemployment shocks is increasing in education level. The results suggest that low regional mobility of low‐educated workers may contribute to higher regional disparities and higher overall unemployment among the low educated.     

Action,Reaction and Resignation: How Refugee Women and Support Organisations Respond to Labour Market Integration Challenges during the Covid-19 Pandemic

Even without the impact of a global pandemic, refugee women face obstacles to their integration into the labour market. Complex integration challenges are situated across different, yet interwoven, levels. These include restrictive policies at the institutional level, limited funding for support measures at the organisational level and a lack of skills at the individual level. Many of these are gendered and specifically affect women. Some might be further intensified by Covid-19. However, the pandemic's effect on the labour market integration of refugee women has yet to be explored.This paper examines specific challenges support organisations and refugee women have faced during the pandemic and their responses to these. Following a process perspective, we utilise a qualitative methods approach with semi-structured interviews. We collected our data in Austria, a European country that hosts numerous refugees and has an elaborate support network.Results show that the external shock of the pandemic amplified the importance of developing digital skills to support post-pandemic labour market integration. In addition, the pandemic exacerbated challenges for refugee women and support organisations. This led to ‘action’, ‘reaction’ and ‘resignation’ responses. We discuss these, and provide avenues for further research and practice.     

The myth of price convergence under economic integration: A proposed explanation for the difference in food prices across European countries

Conventional globalization theory states that regional economic integration will precede price standardization across participating countries due to the increased buying power of large retail groups and parallel imports. The resulting price corridor should merely reflect differences in logistic costs and short-term, local competitive actions. Yet, this study uses panel data from 25 European countries to examine how hefty food and beverage price differentials between regions remained constant over the last decade. Income, store productivity, and market concentration all contribute to the explanation for regional price differences. These findings suggest that, contrary to straight-line globalization theory, large European retailers’ decisions can influence price convergence and maintain important price dispersion between economically integrated countries. We provide recommendations to enhance market integration.     

Permanent Disadvantage or Gradual Integration: Explaining the Immigrant–Native Earnings Gap in Sweden

Theoretical explanations suggest that wage differentials between immigrant and native workers are generated either by differences in the acquisition of human capital or by various forms of exclusion of immigrants from fair labour market rewards. We evaluate the labour quality and labour market discrimination hypotheses by using a large sample of Swedish employees in 1995. Our findings show that labour market integration is relatively unproblematic for immigrants from Western countries, whereas immigrants from other countries, especially from Africa, Asia and Latin America, face substantial obstacles to earnings progress when entering the Swedish labour market. For the latter group of countries, extensive controls for general and country‐specific human capital reduce the earnings differentials. However, the remaining gap is of a non‐trivial magnitude. Thus, the labour quality hypothesis accounts for a part of the observed native–immigrant wage gap, but the remaining differentials can be interpreted in terms of labour market discrimination.     

THE WELFARE GAINS OF FINANCIAL LIBERALIZATION: CAPITAL ACCUMULATION AND HETEROGENEITY

Research has shown that, absent individual heterogeneity and under complete markets, the welfare impact of financial openness is quantitatively limited. Not only are inequalities in wealth and labor productivity a feature of most societies, but also financial markets suffer from many well‐known frictions. This paper demonstrates that, when households face borrowing constraints and uninsurable idiosyncratic shocks to income, the welfare implications of financial liberalization are considerable. For instance, the average increase in welfare of a typical emerging market economy that switches from a closed capital market to perfect capital mobility is equivalent to a permanent increase in average consumption of roughly 5.4%. This is about 3.9 times more than the welfare gains of the same policy under a complete markets environment without any individual heterogeneity. We show that individual heterogeneity accounts for two thirds of this additional increase in the average welfare gain; market incompleteness accounts for the remaining third. In our calibration, the median household in capital‐scarce countries is in favor of international financial integration. However, if the pivotal voter is wealthy enough then such reform might not be implemented, since richer households have a vested interest in capital market closedness.     

Labour Institutions and Economic Growth: a Survey and a “Regulationist” Approach

Abstract. The paper argues that it is detrimental to assume perfect competition and total flexibility of labour markets in order to understand the intensity and stability of growth. Whereas development theories emphasize the impact of imperfect labour markets, this is not so for modern endogenous growth theories. By contrast, the régulation approaches (in the French meaning) both theoretically and empirically suggest that the transformations in labour institutions might have played a crucial role in the post World War II boom: an unprecedented division of labour associated with long-run labour relations contracts have enhanced the genuine Fordist growth model. Furthermore, international comparisons among OECD countries suggest that job regulations and active minimum wage policies may have created some short-run disequilibria but have stimulated dynamic efficiency, via more technological and organizational innovations. Consequently, this area requires more active researches by labour economists.     

隐Markov链驱动关联性和波动性的传染分析

本文将隐Markov链对波动性和相关性的驱动分析引入DCC多元GARCH,对波动和相关分析建立起了直接的联系,进而考察次贷危机、欧洲债务危机在主要证券市场间的传染性。研究发现,高波动高相关机制为联动性提供了一种直接的表述方式,且这一机制在危机期间处于支配地位;次贷危机、欧洲债务危机具有传染性,传染期以区间的形式出现,且危机初期的市场在各机制间有较为频繁的转换,不可根据危机事件对样本进行武断地分割;同时,危机的传染在所考察的市场之间具有系统性,应对危机需要各国政策间的协调配合;另外,有证据显示美国次贷市场在2006年年中已显现出问题,有关国家贻误了深入分析和应对危机的时机。     

Matching across Space: Evidence from Finland

Abstract. This paper takes a matching approach to local labour markets in Finland. The monthly data comprise 120 Local Labour Office areas over a 12 year period between January 1991 and August 2002. The basic matching function is extended to account for spatial spillovers across borders. The role of population density in the matching process is also examined. According to the results, there is a congestion effect among job seekers in the local labour markets, which is further strengthened by spatial spillovers. The results also indicate that job seekers from neighbouring areas cause additional heterogeneity in the matching process in densely populated areas, which decreases the matching efficiency in these areas.     

Strategic planning for internationalization—The European dilemma and some possible solutions

The crux of the European dilemma in international corporate planning lies in the frequent European fate as a way-station for manufacturers that begin their commercial lives in North America and end them in the Less Developed Countries. Thus, it is the companies in middle income countries like Europe (and Japan) that are going to have to be fastest on their feet. By and large, they have neither the first markets nor the last production sites. If they wish to survive, they will have to plan to take up and cast off products. Unless, of course, we wish to go back to the negotiated interwar, no or low growth environment. Fortunately, however, there probably is no going back. The cost to consumers of protected markets would be far too high to be acceptable.     

Institutional Shifts In Inter-Municipal Service Delivery

Comparative research on inter-municipal cooperation in eight European countries shows that there is a great variety of institutional arrangements for cooperation across the different countries. Also, these arrangements tend to change over time in terms of the scope of cooperation among partners, their composition and the degree of organizational integration. This article describes and analyzes the variety of and shifts in institutional arrangements for a specific class of inter-municipal cooperation arrangements: those that are set up to provide for the joint delivery of public services. It is argued that specific arrangements are typically the outcomes of interaction between national institutional contexts, environmental factors and local preferences.     

Emigration and Immigration in Italy: Recent Trends

ABSTRACT: During the eighties Italy has evolved into being a receiver of immigration. However, the existence of large Italian communities abroad, and the persistence of exit migratory flows (although amply compensated by re-entry flows) show that the connotation of Italy as a country of emigration still persists. This paper points out the differing composition of present immigration flows to Italy compared to those of Italian migratory flows towards the more industrially advanced European countries over the past decades. The labour forces that constitute these present day immigration flows often possess medium to high educational qualifications, and are more frequently absorbed into the tertiary and agricultural markets, rather than the industrial sector. These immigrants rarely have regular, unionized occupations, and satisfy a demand for precarious, unstable labour which is in expansion in Italy, as in other countries. Furthermore, these immigration flows are directed not only towards those regions with high employment rates, but also to those with high unemployment rates. Thus, the implications are that the character of present day emigration can only be clearly understood by taking into account the highly segmented aspect of the labour market.     

Ownership concentration and market value of European banks

This paper investigates the relationship between ownership concentration and market value of European banks, and the role of the institutional environment in shaping this relationship. Using GMM dynamic estimator on a sample of European banks over a 13-year period (1993–2005) we find on average a negative effect of ownership concentration on bank value, measured by Tobin's Q. However, this effect varies across different institutional settings; while higher ownership concentration results in a lower bank value particularly in the countries belonging to German legal family, the impact of ownership concentration is positive in Scandinavia. We propose that, besides the legal protection of small investors, the differences in the impact of ownership concentration across the countries could be due to the identity of the predominant owners, i.e. financial institutions in Germany and trusts and foundations in Scandinavia. This in turn implies that restrictions of shareholdings in banks could alleviate governance problems in some countries, but lower bank valuation in others.