IDEAS home Printed from https://ideas.repec.org/p/ays/ispwps/paper1810.html
   My bibliography  Save this paper

The Determinants of Social Protection Expenditures and Labor Market Flexibility

Author

Listed:
  • Wasseem Mina

    (Department of Economics and Finance, College of Business and Economics, United Arab Emirates University)

Abstract

This paper examines the determinants of social protection expenditures empirically focusing on the influence of labor market flexibility. Using data on 55 developed and developing countries, and fixed and random effects models to account for country specific effects, the paper finds that the perception that labor market flexibility would increase demand for social expenditures is unfounded. Among the labor market flexibility indicators, linking pay to productivity reduces social protection expenditures. This result is robust to the inclusion of unemployment rate and the degree of income inequality as two social protection risks in the empirical model. It is also robust to the inclusion of more risks, proxied by the Human Development Index. Given the large country sample adopted, the paper improves our understanding of the most important determinants of social protection expenditures, and highlights the importance of labor market flexibility to government expenditure policy.

Suggested Citation

  • Wasseem Mina, 2018. "The Determinants of Social Protection Expenditures and Labor Market Flexibility," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1810, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1810
    as

    Download full text from publisher

    File URL: http://icepp.gsu.edu/files/2018/02/paper1810.1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Burks, Stephen & Carpenter, Jeffrey & Goette, Lorenz, 2009. "Performance pay and worker cooperation: Evidence from an artefactual field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 70(3), pages 458-469, June.
    2. Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 1-49.
    3. Colin C. Williams & Jan Windebank, 2015. "Evaluating competing theories of informal employment: some lessons from a 28-nation European survey," International Journal of Business and Globalisation, Inderscience Enterprises Ltd, vol. 15(1), pages 45-62.
    4. Pokorny, Kathrin, 2008. "Pay--but do not pay too much: An experimental study on the impact of incentives," Journal of Economic Behavior & Organization, Elsevier, vol. 66(2), pages 251-264, May.
    5. Cornelissen, Thomas & Heywood, John S. & Jirjahn, Uwe, 2011. "Performance pay, risk attitudes and job satisfaction," Labour Economics, Elsevier, vol. 18(2), pages 229-239, April.
    6. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    7. Holmström, Bengt, 2016. "Pay for Performance and Beyond," Nobel Prize in Economics documents 2016-4, Nobel Prize Committee.
    8. Fauziah ZEN & Mukul G. ASHER, 2015. "Social Protection in ASEAN: Challenges and Initiatives for Post-2015 Vision," Working Papers DP-2015-06, Economic Research Institute for ASEAN and East Asia (ERIA).
    9. Bengt Holmström, 2017. "Pay for Performance and Beyond," American Economic Review, American Economic Association, vol. 107(7), pages 1753-1777, July.
    10. Colin Green & John S. Heywood, 2008. "Does Performance Pay Increase Job Satisfaction?," Economica, London School of Economics and Political Science, vol. 75(300), pages 710-728, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. João Amador & Pedro G. Rodrigues, 2021. "Optimal Social Insurance: Insights from a Continuous-Time Stochastic Setup," Working Papers w202101, Banco de Portugal, Economics and Research Department.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Colin P. Green & John S. Heywood, 2016. "Don't Forget the Gravy! Are Bonuses Just Added on Top of Salaries?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 490-513, July.
    2. Mari Kangasniemi, 2012. "Job satisfaction and wage dispersion," Working Papers 278, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    3. Benjamin Artz & Colin P. Green & John S. Heywood, 2021. "Does performance pay increase alcohol and drug use?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 969-1002, July.
    4. Weiyi Zhang & Hiromasa Takahashi & Junyi Shen, 2016. "Does Physical Exercise Affect Tradeoffs between Fixed Pay and Performance-related Pay for Individuals?," Discussion Paper Series DP2016-13, Research Institute for Economics & Business Administration, Kobe University.
    5. Baktash, Mehrzad B. & Heywood, John S. & Jirjahn, Uwe, 2022. "Worker stress and performance pay: German survey evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 276-291.
    6. Bryson, Alex & Clark, Andrew E. & Freeman, Richard B. & Green, Colin P., 2016. "Share capitalism and worker wellbeing," Labour Economics, Elsevier, vol. 42(C), pages 151-158.
    7. Bradler, Christiane, 2015. "How creative are you? An experimental study on self-selection in a competitive incentive scheme for creative performance," ZEW Discussion Papers 15-021, ZEW - Leibniz Centre for European Economic Research.
    8. Keith Bender & Colin Green & John Heywood, 2012. "Piece rates and workplace injury: Does survey evidence support Adam Smith?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 569-590, January.
    9. Colin Green & John Heywood, 2012. "Don't Forget the Gravy! Are Bonuses and Time Rates Complements?," Working Papers 13424023, Lancaster University Management School, Economics Department.
    10. Cornelissen, Thomas & Heywood, John S. & Jirjahn, Uwe, 2011. "Performance pay, risk attitudes and job satisfaction," Labour Economics, Elsevier, vol. 18(2), pages 229-239, April.
    11. K. Sommerfeld, 2013. "Higher and higher? Performance pay and wage inequality in Germany," Applied Economics, Taylor & Francis Journals, vol. 45(30), pages 4236-4247, October.
    12. Kvaløy, Ola & Nieken, Petra & Schöttner, Anja, 2015. "Hidden benefits of reward: A field experiment on motivation and monetary incentives," European Economic Review, Elsevier, vol. 76(C), pages 188-199.
    13. K. Pouliakas & I. Theodossiou, 2009. "Confronting Objections To Performance Pay: The Impact Of Individual And Gain‐Sharing Incentives On Job Satisfaction," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(5), pages 662-684, November.
    14. Pupato, Germán, 2017. "Performance pay, trade and inequality," Journal of Economic Theory, Elsevier, vol. 172(C), pages 478-504.
    15. Reizer, Balázs, 2022. "Employment and Wage Consequences of Flexible Wage Components," Labour Economics, Elsevier, vol. 78(C).
    16. Roland Bénabou & Jean Tirole, 2016. "Bonus Culture: Competitive Pay, Screening, and Multitasking," Journal of Political Economy, University of Chicago Press, vol. 124(2), pages 305-370.
    17. Dalton, P.S. & Gonzalez Jimenez, V.H. & Noussair, C.N., 2015. "Paying with Self-Chosen Goals : Incentives and Gender Differences," Discussion Paper 2015-021, Tilburg University, Center for Economic Research.
    18. Bok Hoon & Daniel Parent, 2013. "Learning and the Form of Compensation," Journal of Labor Research, Springer, vol. 34(1), pages 79-98, March.
    19. Lalin Anik & Lara B Aknin & Michael I Norton & Elizabeth W Dunn & Jordi Quoidbach, 2013. "Prosocial Bonuses Increase Employee Satisfaction and Team Performance," PLOS ONE, Public Library of Science, vol. 8(9), pages 1-8, September.
    20. Petri Böckerman & Alex Bryson & Pekka Ilmakunnas, 2013. "Does high involvement management lead to higher pay?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(4), pages 861-885, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ays:ispwps:paper1810. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Benson (email available below). General contact details of provider: https://edirc.repec.org/data/ispgsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.