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Work and Pay in Flexible and Rgulated Labor Market : A Generalized Perspective on Insitutional Evolution in Inequality Trends in Europe and the US

Author

Listed:
  • Thomas A. Diprete

    (Department of Sociology - Columbia University [New York])

  • Dominique Goux

    (Institut national de la statistique et des études économiques (INSEE))

  • Eric Maurin

    (PJSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Amélie Quesnel-Vallee

    (McGill University = Université McGill [Montréal, Canada])

Abstract

In recent years a "unified theory" has emerged out of labor economics, which argues that a combination of "macroeconomic shocks" and flexible labor market institutions in the U.S. has produced strong upward trends in wage inequality, while these same shocks have produced high unemployment and low employment growth in Europe as a side effect of the wage stability preserved by that continent's rigid labor market institutions. This paper takes issue with the common view that inequality trends are best explained by a model of stable institutions interacting with changing macroeconomic forces. It argues that European institutions in fact have changed, and that institutional changes which were triggered by the broader macroeconomic forces have affected the form as well as the size of inequality trends. While the U.S. has experienced rising strong skill-based wage inequality, institutional change in France has produced an upward trend in the density of insecure jobs and an increased concentration of low-skill workers in insecure jobs. These results challenge the view that low employment rates is the sole mechanism through which European labor markets have absorbed asymmetric shocks to their demand for labor.

Suggested Citation

  • Thomas A. Diprete & Dominique Goux & Eric Maurin & Amélie Quesnel-Vallee, 2006. "Work and Pay in Flexible and Rgulated Labor Market : A Generalized Perspective on Insitutional Evolution in Inequality Trends in Europe and the US," Post-Print halshs-00754640, HAL.
    • Handle: RePEc:hal:journl:halshs-00754640
    DOI: 10.1016/j.rssm.2006.04.001
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    Citations

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    Cited by:

    1. Biegert, Thomas & Kühhirt, Michael, 2018. "Taking lemons for a trial run: does type of job exit affect the risk of entering fixed-term employment in Germany?," LSE Research Online Documents on Economics 87334, London School of Economics and Political Science, LSE Library.
    2. Asaf Levanon, 2018. "Labor Market Insiders or Outsiders? A Cross-National Examination of Redistributive Preferences of the Working Poor," Societies, MDPI, vol. 8(3), pages 1-15, August.
    3. Michael Gebel, 2010. "Early career consequences of temporary employment in Germany and the UK," Work, Employment & Society, British Sociological Association, vol. 24(4), pages 641-660, December.
    4. Smirnykh, Larisa & Wörgötter, Andreas, 2019. "The importance of institutional and organizational characteristics for the use of fixed-term contracts in Russia," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 24(1), pages 89-121.

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