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Endogenizing Labor Mobility: A Partisan Politics Explanation

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  • Qiang Zhou

Abstract

Much of the existing literature shows that factor mobility across industries has important political economic implications but that it is exogenous to the political process. This article argues that labor’s mobility across industries can be endogenous to changes of power relations due to partisan reasons. Based on a general equilibrium model, the prediction is that, when unions are decentralized, governments led by left-wing parties seek and obtain higher labor mobility than do governments led by rightist parties. However, as unions become more centralized, this distinction becomes less clear-cut. Time series cross-sectional analyses of OECD countries from 1960 to 1999 support this prediction and the endogenous labor mobility hypothesis.

Suggested Citation

  • Qiang Zhou, 2017. "Endogenizing Labor Mobility: A Partisan Politics Explanation," International Interactions, Taylor & Francis Journals, vol. 43(4), pages 688-715, July.
  • Handle: RePEc:taf:ginixx:v:43:y:2017:i:4:p:688-715
    DOI: 10.1080/03050629.2016.1222712
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    1. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, December.
    2. Lennart Erixon, 2010. "The Rehn-Meidner Model in Sweden: Its Rise, Challenges and Survival," Journal of Economic Issues, Taylor & Francis Journals, vol. 44(3), pages 677-715.
    3. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, December.
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