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Institutional Determinants of Worker Flows: A Cross-Country/Cross-Industry Approach

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  • Andrea Bassanini
  • Andrea Garnero
  • Pascal Marianna
  • Sébastien Martin

Abstract

There is little cross-country comparative evidence on the way labour market institutions shape gross job and worker flows, by and large because comparable data for many countries are scarce. By using a unique harmonised dataset on hirings and separations at the industry-level for a large majority of OECD countries, we fill this gap, by analysing the role of a number of labour and product market institutions in shaping cross-country differences in gross worker flows. In order to identify the effect of policies and institutions we consider an industry-level difference-in-difference approach. The basic premise of this approach is that the effect of a particular policy on gross job flows is greater in industries where the policy is more likely to constrain firm behaviour. We check, however, the robustness of our results using more standard cross-country/time-series estimates. The richness of the data available to us allows estimating the impact of the institutions also on the transitions from job to job, the transitions from job to nonemployment and the transitions from non-employment to jobs. We find that cross-country differences in job protection for open-ended contracts and unemployment benefits can explain a large share of crosscountry variation in gross worker flows. However, the effect of the former is essentially limited to job-tojob flows. Il y a peu de résultats comparatifs à travers les pays sur la manière dont les institutions du marché du travail façonnent les flux bruts d’emplois et de main d’oeuvre, en raison d’un manque de données comparables pour un certain nombre de pays. Cet article comble cet écart, en s’appuyant sur une base de données harmonisées sur les embauches et les cessations d‘emplois au niveau des secteurs d’activité pour un grand nombre de pays de l’OCDE, et en analysant comment un certain nombre d’institutions nationales des marchés du travail et des produits façonnent les écarts de réallocation de main d’oeuvre entre les pays. Afin d’identifier l’effet des politiques et des institutions nationales, nous considérons un modèle de différence en différences au niveau des secteurs d’activité. Le principe de base de cette méthode est que l’effet d’une certaine politique sur le flux brut d’emplois est supérieur dans les industries où cette politique est de nature à imposer une contrainte sur le comportement des entreprises. Nous vérifions, cependant, la robustesse des résultats en utilisant des estimations plus standards en coupe transversale et série temporelle. La richesse des données disponibles permet également l’estimation de l’impact des institutions sur les transitions d’un emploi à l’autre, les transitions d’un emploi au non-emploi et les transitions du nonemploi vers l’emploi. Nous trouvons que les différences inter-pays dans la protection de l’emploi pour les contrats à durée indéterminée et les prestations de chômage peuvent expliquer une large proportion des variations inter-pays des flux bruts de main d’oeuvre. Cependant, l’effet du premier est essentiellement limité aux flux d’un emploi à l’autre.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 107.

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Date of creation: 06 Jul 2010
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Handle: RePEc:oec:elsaab:107-en

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Keywords: labour market institutions; worker flows; job-to-job transitions; cross-country data;

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Cited by:
  1. Holzmann, Robert & Pouget, Yann & Vodopivec, Milan & Weber, Michael, 2011. "Severance pay programs around the world : history, rationale, status, and reforms," Social Protection Discussion Papers 62726, The World Bank.
  2. Andrea Bassanini, 2012. "Aggregate Earnings and Macroeconomic Shocks: the Role of Labour Market Policies and Institutions," Review of Economics and Institutions, Università di Perugia, vol. 3(3).
  3. Aida Caldera Sánchez & Dan Andrews, 2011. "To Move or not to Move: What Drives Residential Mobility Rates in the OECD?," OECD Economics Department Working Papers 846, OECD Publishing.
  4. Juan F. Jimeno & Carlos Thomas, 2011. "Collective bargaining, firm heterogeneity and unemployment," Banco de Espa�a Working Papers 1131, Banco de Espa�a.
  5. Clovis Kerdrain & Isabell Koske & Isabelle Wanner, 2011. "Current Account Imbalances: can Structural Reforms Help to Reduce Them?," OECD Journal: Economic Studies, OECD Publishing, vol. 2011(1), pages 1-44.
  6. Peter Gal & Alexander Hijzen & Zoltan Wolf, 2012. "The Role of Institutions and Firm Heterogeneity for Labour Market Adjustment: Cross-Country Firm-Level Evidence," OECD Social, Employment and Migration Working Papers 134, OECD Publishing.
  7. Richard Fabling & David C. Maré, 2012. "Cyclical Labour Market Adjustment in New Zealand: The Response of Firms to the Global Financial Crisis and its Implications for Workers," Working Papers 12_04, Motu Economic and Public Policy Research.
  8. Mathijs Gerritsen & Jens Høj, 2013. "The Dutch Labour Market: Preparing for the Future," OECD Economics Department Working Papers 1012, OECD Publishing.
  9. Martin, John P. & Scarpetta, Stefano, 2011. "Setting It Right: Employment Protection, Labour Reallocation and Productivity," IZA Policy Papers 27, Institute for the Study of Labor (IZA).
  10. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
  11. Clovis Kerdrain & Isabell Koske & Isabelle Wanner, 2010. "The Impact of Structural Policies on Saving, Investment and Current Accounts," OECD Economics Department Working Papers 815, OECD Publishing.

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