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Globalization and labor market institutions: International empirical evidence

  • Potrafke, Niklas

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
DOI: 10.1016/j.jce.2013.02.002
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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