IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Globalization and Labor Market Institutions: International Empirical Evidence

  • Niklas Potrafke

    ()

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 crosssectional 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.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2013/IfoWorkingPaper-154.pdf
Download Restriction: no

Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 154.

as
in new window

Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:ces:ifowps:_154
Contact details of provider: Postal:
Poschingerstrasse 5, 81679 Munich

Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Juan Botero, 2003. "The Regulation of Labor," NBER Working Papers 9756, National Bureau of Economic Research, Inc.
  2. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-45, January.
  3. Axel Dreher, 2003. "The Influence of Globalization on Taxes and Social Policy – an Empirical Analysis for OECD Countries," Public Economics 0310002, EconWPA, revised 27 Feb 2004.
  4. Rodolphe Desbordes & Céline Azémar, 2010. "Short-Run Strategies For Attracting Foreign Direct Investment," Working Papers 1005, University of Strathclyde Business School, Department of Economics.
  5. Axel Dreher & Noel Gaston, 2007. "Has Globalisation Really had no Effect on Unions?," Kyklos, Wiley Blackwell, vol. 60(2), pages 165-186, 05.
  6. Levinsohn, James, 1999. "Employment responses to international liberalization in Chile," Journal of International Economics, Elsevier, vol. 47(2), pages 321-344, April.
  7. Carsten Hefeker & Michael Neugart, 2007. "Labor Market Regulation and the Legal System," CESifo Working Paper Series 2041, CESifo Group Munich.
  8. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
  9. Wacziarg, Romain & Wallack, Jessica Seddon, 2004. "Trade liberalization and intersectoral labor movements," Journal of International Economics, Elsevier, vol. 64(2), pages 411-439, December.
  10. Günther G. Schulze & Heinrich W. Ursprung, 1999. "Globalisation of the Economy and the Nation State," The World Economy, Wiley Blackwell, vol. 22(3), pages 295-352, 05.
  11. Ronald B. Davies & Krishna Chaitanya Vadlamannati, 2011. "A race to the bottom in labour standards? An empirical investigation," Working Papers 201123, School of Economics, University College Dublin.
  12. Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "The Quality of Government," Working Paper 19452, Harvard University OpenScholar.
  13. Saint-Paul, Gilles, 2005. "Making Sense of Bolkestein-Bashing: Trade Liberalization Under Segmented Labour Markets," CEPR Discussion Papers 5100, C.E.P.R. Discussion Papers.
  14. Yann Algan & Pierre Cahuc, 2006. "Job Protection: the Macho Hypothesis?," Sciences Po publications info:hdl:2441/43usn88ugg8, Sciences Po.
  15. Hervé Boulhol, 2006. "Do capital market and trade liberalization trigger labor market deregulation ?," Cahiers de la Maison des Sciences Economiques bla06062, Université Panthéon-Sorbonne (Paris 1).
  16. William W. Olney, 2010. "A Race to the Bottom? Employment Protection and Foreign Direct Investment," Department of Economics Working Papers 2011-02, Department of Economics, Williams College, revised Aug 2013.
  17. R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
  18. Bjørnskov, Christian, 2008. "The growth-inequality association: Government ideology matters," Journal of Development Economics, Elsevier, vol. 87(2), pages 300-308, October.
  19. Philippe Aghion & Yann Algan & Pierre Cahuc & Andrei Shleifer, 2009. "Regulation and Distrust," Working Papers hal-00972819, HAL.
  20. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-45, May.
  21. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
  22. Jonas Agell, 2002. "On the Determinants of Labour Market Institutions: Rent Seeking vs. Social Insurance," German Economic Review, Verein für Socialpolitik, vol. 3(2), pages 107-135, 05.
  23. Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
  24. Noel Gaston & Gulasekaran Rajaguru, 2008. "The rise (and fall) of labour market programmes: domestic vs. global factors," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 619-648, October.
  25. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
  26. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
  27. Bergh, Andreas & Nilsson, Therese, 2010. "Good for Living? On the Relationship between Globalization and Life Expectancy," World Development, Elsevier, vol. 38(9), pages 1191-1203, September.
  28. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
  29. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
  30. Axel Dreher & Noel Gaston, 2006. "Has globalization increased inequality?," KOF Working papers 06-140, KOF Swiss Economic Institute, ETH Zurich.
  31. Arye L. Hillman, 2005. "Globalization and the political economy of international trade policy," Chapters, in: Trade Policy Reforms and Development, chapter 1 Edward Elgar Publishing.
  32. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  33. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
  34. Meinhard, S. & Potrafke, Niklas, 2012. "The Globalization-Welfare State Nexus Reconsidered," Munich Reprints in Economics 19212, University of Munich, Department of Economics.
  35. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
  36. Fischer, Justina AV & Somogyi, Frank, 2009. "Globalization and Protection of Employment," MPRA Paper 17535, University Library of Munich, Germany.
  37. Bergh, Andreas & Nilsson, Therese, 2010. "Do liberalization and globalization increase income inequality?," European Journal of Political Economy, Elsevier, vol. 26(4), pages 488-505, December.
  38. Gabriel Felbermayr & Mario Larch & Lechthaler Wolfgang, 2011. "Endogenous Labor Market Insitutions in an Open Economy," Ifo Working Paper Series Ifo Working Paper No. 108, Ifo Institute for Economic Research at the University of Munich.
  39. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Direct Investment and Relative Wages: Evidence from Mexico's Maquiladoras," NBER Working Papers 5122, National Bureau of Economic Research, Inc.
  40. Gabriel J. Felbermayr & Jasmin Gröschl, 2011. "Natural Disasters and the Effect of Trade on Income: A New Panel IV Approach," CESifo Working Paper Series 3541, CESifo Group Munich.
  41. Felbermayr, Gabriel & Hiller, Sanne & Sala, Davide, 2010. "Does immigration boost per capita income?," Munich Reprints in Economics 20582, University of Munich, Department of Economics.
  42. Arye L. Hillman, 2008. "Globalization And Social Justice," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(02), pages 173-189.
  43. Axel Dreher & Jan-Egbert Sturm & Heinrich Ursprung, 2006. "The Impact of Globalization on the Composition of Government Expenditures: Evidence from Panel Data," CESifo Working Paper Series 1755, CESifo Group Munich.
  44. Indra de Soysa & Krishna Chaitanya Vadlamannati, 2011. "Does Being Bound Together Suffocate, or Liberate? The Effects of Economic, Social, and Political Globalization on Human Rights, 1981–2005," Kyklos, Wiley Blackwell, vol. 64(1), pages 20-53, 02.
  45. Noel Gaston & Douglas Nelson, 2004. "Structural Change and the Labor-market Effects of Globalization," Review of International Economics, Wiley Blackwell, vol. 12(5), pages 769-792, November.
  46. Hillman, Arye L, 1982. "Declining Industries and Political-Support Protectionist Motives," American Economic Review, American Economic Association, vol. 72(5), pages 1180-87, December.
  47. Marcus Neureiter & Peter Nunnenkamp, 2010. "Outsourcing Motives, Location Choice and Labour Market Implications: An Empirical Analysis for European Countries -super-," Kyklos, Wiley Blackwell, vol. 63(2), pages 206-230, 05.
  48. David Roodman, 2007. "A Note on the Theme of Too Many Instruments," Working Papers 125, Center for Global Development.
  49. Busse, Matthias, 2004. "On the determinants of core labour standards: the case of developing countries," Economics Letters, Elsevier, vol. 83(2), pages 211-217, May.
  50. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  51. Wood Júnior, Thomaz, 1995. "Workers," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 35(2), January.
  52. Häberli, Christian & Jansen, Marion & Monteiro, José-Antonio, 2012. "Regional trade agreements and domestic labour market regulation," ILO Working Papers 470016, International Labour Organization.
  53. Daniel Chiquiar, 2004. "Globalization, Regional Wage Differentials and the Stolper-Samuelson Theorem: Evidence from México," Working Papers 2004-06, Banco de México.
  54. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "International migration and the welfare state revisited," European Journal of Political Economy, Elsevier, vol. 29(C), pages 90-101.
  55. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  56. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  57. Rita Almeida, 2004. "The labor market effects of foreign-owned firms," Policy Research Working Paper Series 3300, The World Bank.
  58. Marc Piopiunik, 2013. "The Effects of Early Tracking on Student Performance: Evidence from a School Reform in Bavaria," Ifo Working Paper Series Ifo Working Paper No. 153, Ifo Institute for Economic Research at the University of Munich.
  59. Teodora Dimitrova & Anton Tchipev, 2004. "Globalization and Labour Markets Deregulation," Working Papers of the Research Group Heterogenous Labor 04-08, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
  60. Bezemer, Dirk & Jong-A-Pin, Richard, 2013. "Democracy, globalization and ethnic violence," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 108-125.
  61. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
  62. Potrafke, Niklas, 2010. "Labor market deregulation and globalization: Empirical evidence from OECD countries," Munich Reprints in Economics 19282, University of Munich, Department of Economics.
  63. Feldmann, Horst, 2009. "The unemployment effects of labor regulation around the world," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 76-90, March.
  64. David KUCERA, 2002. "Core labour standards and foreign direct investment," International Labour Review, International Labour Organization, vol. 141(1-2), pages 31-69, 03.
  65. Wood, Adrian, 1998. "Globalisation and the Rise in Labour Market Inequalities," Economic Journal, Royal Economic Society, vol. 108(450), pages 1463-82, September.
  66. Horst Feldmann, 2003. "Labor Market Regulation and Labor Market Performance: Evidence Based on Surveys among Senior Business Executives," Kyklos, Wiley Blackwell, vol. 56(4), pages 509-540, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ces:ifowps:_154. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.