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Addressing Labour Market Segmentation: The Role of Labour Law

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  • Simon Deakin

Abstract

Labour market segmentation is problematic because of its links to poor job quality, inequality and discrimination, on the one hand, and inefficiency in resource allocations, on the other. Segmentation is the result of contractual ordering which is often privately efficient but socially sub-optimal. The law largely reflects the economics forces and social norms which give rise to segmentation, but can amplify and perpetuate its effects. The rise of atypical employment in some contexts and of informal employment in others is at least in part a response to the emergence of the standard employment relationship or SER as a legal model and normative benchmark for certain aspect of labour law, in particular employment protection legislation. Attempts to counter segmentation and informality by extending the scope of the SER, on the one hand, and by accepting atypical forms but aligning them more closely with the SER, on the other, have met with limited success. The most successful strategies for labour law reform are those based on an integrated policy approach in which some flexibilisation of employment protection rules is combined with complementary mechanisms for mutualising labour market risks, including collective bargaining, workplace social dialogue, work-life balance laws, work sharing arrangements, targeted fiscal reforms, and active labour market policy.

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  • Simon Deakin, 2013. "Addressing Labour Market Segmentation: The Role of Labour Law," Working Papers wp446, Centre for Business Research, University of Cambridge.
  • Handle: RePEc:cbr:cbrwps:wp446
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    3. World Bank Group, . "Paving the Way for Women’s Economic Inclusion in the Gulf Cooperation Council," World Bank Other Operational Studies, The World Bank, number 24419.
    4. Ravi Srivastava, 2019. "Emerging Dynamics of Labour Market Inequality in India: Migration, Informality, Segmentation and Social Discrimination," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(2), pages 147-171, June.
    5. Bjarke Refslund & Annette Thörnquist, 2016. "Intra-European labour migration and low-wage competition—comparing the Danish and Swedish experiences across three sectors," Industrial Relations Journal, Wiley Blackwell, vol. 47(1), pages 62-78, January.

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    More about this item

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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