It is widely held that labour market reform policies increase insider/outsider disparities in labour market outcomes. We seek to differentiate this assumption and to show that this presumed effect is conditional on the configuration of the bargaining system and the level of employment protection legislation (EPL). Using hierarchical models that match EU-SILC microdata with several macro indicators for 20 countries, we find that, in contexts with a high degree of bargaining centralisation and EPL, the relative low-wage risk of entrants and re-entrants from inactivity increases with commodification and deregulation. If bargaining is decentralised, however, the effects of labour market reform policies on insider/outsider disparities are marginal. We explain these findings with theoretical concerns based on the concept of closure. These predict that centralised bargaining structures and high EPL (or, rather, closed employment relationships) will systematically channel risks produced in the political framework to the periphery of the labour market. In a second step, these insights are used to explain differences in the determinants of working poverty between Germany and the UK. These explanations, in turn, are tested on the basis of a comparative analysis with the British Household Panel Study (BHPS) and the German Socio-Economic Panel Study (SOEP).
Presented by:
Marco Giesselmann (DIW/SOEP)
Date & time:
June 11, 2014 11:00 am - June 11, 2014 12:00 pm
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