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Globalization and labor market institutions: International empirical evidence

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  • Potrafke, Niklas

Abstract

A widespread concern is that labor market institutions erode in the course of globalization, which, in turn, decreases employment and wages. By using panel data and cross-sectional data, I investigate the influence of globalization on labor market regulation. I use the indicators of labor market institutions by Gwartney et al. (2012) and the KOF indices of globalization. To deal with potential reverse causality, I employ a system GMM panel estimator and use a constructed trade share as proposed by Frankel and Romer (1999) as an instrumental variable for globalization in cross-sectional models. The results do not show that globalization induced labor market deregulation.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 41 (2013)
Issue (Month): 3 ()
Pages: 829-842

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Handle: RePEc:eee:jcecon:v:41:y:2013:i:3:p:829-842

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Globalization; Labor market institutions;

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Cited by:
  1. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.
  2. Fischer, Justina A.V., 2014. "Globalized markets, globalized information, and female employment: accounting for regional differences in 30 OECD countries," MPRA Paper 55142, University Library of Munich, Germany.
  3. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," Ifo Working Paper Series Ifo Working Paper No. 181, Ifo Institute for Economic Research at the University of Munich.

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