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Globalization and Labor Market Institutions: International Empirical Evidence

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  • Niklas Potrafke

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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 crosssectional 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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Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 154.

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Date of creation: 2013
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Handle: RePEc:ces:ifowps:_154

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Keywords: Globalization; labor market institutions;

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Cited by:
  1. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," Ifo Working Paper Series, Ifo Institute for Economic Research at the University of Munich Ifo Working Paper No. 181, Ifo Institute for Economic Research at the University of Munich.
  2. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics, University of Munich, Department of Economics 19212, University of Munich, Department of Economics.
  3. 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.

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