Labour Market Institutions and Flexibility in Italy

ABSTRACT: The paper surveys three broad categories of labor market institutions in Italy: employment protection legislation unemployment benefit systems and wage bargaining arrangements In each we the recent evolution and current state of Italian institutions are evaluated and compared With those in other major European countries     

ATTITUDES,POLICIES, AND WORK

We study whether cultural attitudes towards gender, the young, and leisure are significant determinants of the employment rates of women and of the young, and of hours worked. We do this controlling for policies, institutions and other structural characteristics of the economy which may influence labor market outcomes. We identify the effect of culture exploiting the evolution over time within country, as well as across countries, of cultural attitudes. We also address the endogeneity of attitudes, policies, and institutions, and allow for the persistent nature of labor market outcomes. We find that culture matters for women's employment rates and for hours worked. However, policies, in particular employment protection legislation and taxes, are also important and their quantitative impact substantial.     

The Quality of Industrial Relations and Labour Market Performance

Abstract. Using data from 19 industrial countries for the period 1985–2002, this paper analyses whether the quality of industrial relations affects unemployment and employment rates. To measure the quality of industrial relations, we use the results of surveys in which senior business executives characterized the industrial relations of their countries. Controlling for the impact of major labour market institutions, the business cycle, the level of economic development, unobserved country effects, as well as endogeneity, we find that cooperative industrial relations are likely to lower unemployment and to increase employment. The effects appear to be large, particularly among young people.     

A communicative planning approach to combat graduate unemployment in Saudi Arabia

Abstract

This paper introduces and critically reviews the Saudi education and unemployment situation. It sets out the specialized nature of issues regarding education and unemployment which are seldom found in other countries. The governmental efforts and subsequent results in the employment sectors are investigated to illustrate the reasons behind prevailing and expected future graduate unemployment. In addition, this paper proposes the application of a combination of a rational planning model and the concept of communicative rationality in solving the problem of graduate unemployment in Saudi Arabia. It asserts the need for comprehensive data on the nature and magnitude of unemployment, and adequate consultation with all the stakeholders including the private sector. A brief survey conducted among the graduates of King Fahd University of Petroleum &; Minerals (KFUPM) reveals that, while they are competent and easily absorbed into the market, the scenario is not the same for other educational institutions. Similar studies for other educational institutions will facilitate an understanding of the extent of coordination with the job market. A study is being conducted to enhance the creation of a link between the market demand for educational programs and programs offered by educational institutes.     

Dynamic Effects of the Minimum Wage on Informality in Colombia

Informality is a common phenomenon in developing countries and is not uncommon in industrialized societies. Although persistent aggregate rates of informal employment for a certain period of time may be indicative of low rates of employment status change among individuals, more intensive studies regarding persistent individual informal employment are needed. We used a reduced‐form dynamic pseudo panel data model approach that accounted for unobserved heterogeneity and initial conditions to present empirical evidence of the extent of persistent informality in a developing country, where education is the primary force of mitigating permanent informality. Using data from Colombia, we also provide results on the complex effect of minimum wage levels on informality. An increase in the minimum wage resulted in increased informality and increased the persistence of informality. Our results may be a basis with which to discuss the persistence of informality in other developing countries.     

财政分权体制对劳动力转移影响的实证分析

基于政府支出内生经济增长理论,探讨地级市政府财政自主程度对于服务行业分行业劳动力流动的影响,将行业劳动力变更细分为跨地区和跨行业两类指标,结合2004年至2011年中国城市统计年鉴构建的面板数据,在区分面板数据类型基础上分别采用固定效应模型或随机效应模型研究财政分权体制下这两类指标的变化。研究结果表明,在控制一系列影响因素后,地方财权的扩张只对交通、仓储及邮电、房地产和租赁商务以及服务行业劳动力流入产生正向影响,而批发零售、住宿餐饮、金融和信息行业在地方财权扩张时就业空间受到一定的挤压,导致本地劳动力流出。在跨行业的劳动力流动问题中,受地方财权扩张正向影响的行业为房地产、金融和租赁商务,其他行业则会由于地方政府财税自主权的提升造成就业萎缩;此外,地方政府财权自主程度提升会加剧地区及行业间劳动力的流动。     

Outbound Foreign Direct Investment (FDI) Motivation and Domestic Employment by Multinational Enterprises (MNEs)

This study investigates whether and how outbound foreign direct investment (FDI) boosts or reduces domestic employment by multinational enterprises (MNEs). Based on analyses of a firm-level sample of 18,252 subsidiary-year cases of Japanese MNEs in 59 countries from 1996 to 2010, the findings indicate that outbound FDI motivated by (1) market seeking for scale and scope expansion, (2) natural resource seeking, or (3) strategic asset seeking tends to serve as a “strategic complement” that enhances domestic employment by MNEs. However, outbound FDI motivated by (4) market seeking associated with declines in domestic demand or (5) labor resource seeking tends to act as a “strategic substitute” that reduces domestic employment by MNEs. The implications for theory, practice, and policymaking are discussed.     

Changing Business Models and Employee Representation in the Airline Industry: A Comparison of British Airways and Deutsche Lufthansa

In recent years, the notion of business models has gained momentum in management research. Scholars have discussed several barriers to changing business models in established firms. However, the national institutions of market economies have not yet been discussed as barriers, even though they can constrain the latitude of action of a firm's management. Based on interviews and a longitudinal content analysis, we analyse the extent to which full service carriers in two countries (British Airways in the UK and Deutsche Lufthansa in Germany) have adopted elements of a low cost model over time. Furthermore, we investigate how this process has been influenced by the differences in each national institutional context. We particularly focus on the role of the rights of employee representatives in changes in business models. Our results show that British Airways has moved its business model more in the direction of low cost carriers than Deutsche Lufthansa, although the business model of the former airline still differs significantly from that of a typical low cost carrier. We identify national institutions that potentially strengthen the position of employee representatives as a factor that can influence, and also act as a barrier to, business model change.     

Do Interactions between Finance and Labour Market Institutions Affect the Income Distribution?

This article analyses the linkages between financial development, labour market institutions and market income inequality for 18 Organisation for Economic Co‐operation and Development countries over the 1980 to 2012 period. With the help of a dynamic panel data model with an interacted term, one crucial contribution of this article is to analyse the interacted impact of labour market institutions (i.e. union density and employment protection legislation) on the one hand and financial development on the other hand on the income distribution. Our results indicate that changes in the financial/credit and labour market regulation affect the income distribution. Estimates of the marginal effects show that by increasing labour market regulation one also weakens the impact of the flexibilization in the financial/credit market on the increase in income inequality.     

How do sustainability reports from the Nordic and the Mediterranean European countries compare

This study investigates the sustainability reporting practices of companies based in the Nordic and the Mediterranean European countries for the period 2013–2015. Its purpose is to analyse to what extent, if any, are there differences in these practices. It seeks to capture the influence of national institutions and firm specific characteristics in sustainability reporting. Non-parametric statistics are used to analyse some factors which influence disclosure, namely country, industry affiliation, type of property, listing status and size. In accordance with the theoretical frame used, that of the varieties of capitalism approach, findings suggest that in general companies from Mediterranean European countries present higher levels of engagement with the Global Reporting Initiative.     

THE POLITICAL ECONOMY OF FLEXICURITY

We document the presence of a trade‐off in the labor market between the protection of jobs and the support offered to unemployed people. Different countries’ locations along this trade‐off represent stable political‐economic equilibria. We develop a model in which individuals determine the mix of job protection and support for the unemployed in a political environment. Agents are heterogeneous along two dimensions: employment status (insiders and outsiders) and skills (low and high). Unlike previous work on the political economy of labor market institutions, we emphasize the role of job protection and unemployment benefits in the wage‐setting process. A key implication of the model is that flexicurity configurations with low levels of job protection and high levels of support to the unemployed should emerge in the presence of a highly educated workforce. Panel regressions of countries’ locations along this institutional trade‐off are consistent with the implications of our model.     

Key Issues in Women’s Representation in Bureaucracy: Lessons from South Asia

This paper discusses the position of women in the civil services in South Asia (India, Pakistan, and Bangladesh). The majority of women are in lower level positions. It is rare to find women in higher and mid-level positions and in professional and administrative occupations. Despite constitutional guarantees and other governmental initiatives to remove gender discrimination from the civil services of these countries, women continue to fight against a variety of odds to attain career success. The objective of this paper is to make a comparative analysis of the factors accounting for the successful advancement of women in top positions in the civil services of these three countries, and to analyse factors that may impede women from making more progress. A cultural approach has been adopted in this study, emphasizing that the social contexts within which institutions operate shape the manner in which institutions behave and act. Based on extensive field work, the study maps female civil servants’ opinions on a number of factors that impede their career prospects in the civil service. In the conclusion, some policy recommendations are made as a way to address the issue.     

Collective Wage Agreements and Firms’ Employment Policies

This paper provides evidence on the way collective wage agreements affect the adjustment of employment, working hours and other production factors when service‐sector firms are faced with demand shocks. The estimation results indicate that collective wage agreements significantly influence firms’ employment policies. It is shown that recruitment is a widespread instrument for service firms to cope with demand fluctuations which are negatively affected by collective wage agreements. The employment of freelance workers is also negatively affected by collective wage agreements, while their effect on using short‐term employment contracts as a reaction to demand shocks is positive.     

Can the Level of Employment be Explained by GDP Growth in Transition Countries? (Theory versus the Quality of Data)

This paper presents a survey on the relationship between growth and employment in selected transition economies. The second section discusses the empirical evidence using two sets of recent data on employment and pays special attention to gender inequality in economic activity. The third section provides an overview of the literature on the causes of the behaviour of employment and output in transition countries. The fourth section tests the response of employment to GDP growth using data from 11 years and 11 countries. The main result of the paper shows that there seems to be no relationship between output growth and the level of employment in the post‐transition period for two countries: Bulgaria and Ukraine. The fact that both countries have one of the highest shares of unofficial economy in total output in the region is suggested as the main explanation behind this striking result.     

Labour‐market Institutions and Macroeconomic Shocks

Abstract. Macroeconomic shocks and labour‐market institutions jointly determine employment growth and economic performance. The effect of shocks depends on the nature of these institutions and the effect of institutional change depends on the macroeconomic environment. It follows that a given set of institutions may be appropriate in one epoch and not in another. We derive a dynamic model of labour demand in which the effect of firing costs on labour demand depends on the macroeconomic environment: when the level of macroeconomic activity is expected to drop and/or the trend rate of productivity growth is small, a rise in firing costs affects mainly (and adversely) the hiring decision and not the layoff decision. This makes firing costs harmful to employment when it may appear most appropriate. In contrast, firing costs can raise employment during periods of high growth and positive shocks. Our hypothesis is supported by empirical results using OECD data.     

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.     

Labour Market Regulation,Flexibility and Employment

ABSTRACT: Chronic unemployment and slow employment growth in some countries have led to calls for more labor-market “flexibility”. This paper defines the flexibility issue in terms of legally-mandated “severance”, a generalized employment cost linked to seniority. A mandated severance benefit can stand for a variety of programs including employer-provided employment guarantees, payments which must be made to laid-off workers, and compensation for wrongful discharge. Such a mandated cost can be seen as a payroll tax on the employer, raising the issue of tax incidence. Employers often take the view that labor costs are given and that mandated costs are simply add-ons to pre-existing cost levels. However, the literature on tax incidence suggests that a significant portion of “employer-paid” payroll taxes are shifted to labor in the form of lower wages. Such shifting should reduce the dis-employment effects attributed to severance. A model is provided of a firm upon which a severance mandate is imposed. Even at the micro level, the firm can shift some of the cost of severance to employees by lowering wages — although at the expense of higher turnover costs associated with increased quit rates. At the macro level, to the extent that firms reduce employment, there could be still further downward wage adjustments which would shift the severance burden to labor and mitigate the dis-employment effect. Ultimately, if the natural rate of unemployment is raised by severance mandates, the age-old question is raised of why wages do not fall in the face of labor surpluses. The true inflexibility to be explained, therefore, is in wage determination.     

Unemployment,Labour Institutions and Innovation

ABSTRACT: This contribution endorses the transactional trilogy of institutional economics in order to suggest a theoretical framework for re-examining the relationships between unemployment, labour institutions, and technological and organisational innovation. Labour institutions are usually called into question in the debates on European unemployment. Although the advocates of the biased technological change thesis defend it in order to improve the employment of unskilled workers, this article argues that a deregulation of the labour market may in fact generate losses of dynamic efficiency with respect to knowledge accumulation, the organisation of production and national capabilities of innovation. In addition, the impact of technological and organisational innovation on employment partly depends on the capabilities of firms and nations to initiate institutional learning, regarding bargaining, managerial and rationing transactions.     

A Quantitative Analysis of the Effects of Postsecondary Institution Conversions from Not-For-Profit to For-Profit

This study highlights the changes that have occurred at postsecondary institutions after conversion from not-for-profit to for-profit control. Using Delta Cost Project Data and a pre-post study design with a control group of not-for-profit institutions that did not convert, comparisons are drawn. The findings suggest that institutions that convert experience greater enrollment growth, a decline in fulltime employment levels per full time equivalent (FTE) student, no change in average expenses per FTE student, a decrease in total revenue, a decrease in Pell Grants received, a decrease in tuition and fees revenue, and a decline in average subsidy per student post conversion. These findings are critical to the creation of informed policy decisions regarding institutional conversions.     

Earnings‐related Severance Pay

Abstract. In an efficiency wage economy, lump‐sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings‐related, mandated severance pay will have ambiguous employment effects if effort can be varied continuously. A substitution of the earnings‐related for the lump‐sum component reduces employment. Thus, the prevalent form of severance payments in OECD countries might have less advantageous employment effects than previously conjectured.