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The Rise (and Fall) of Labour Market Programmes: The Role of Global and Domestic Factors


  • Noel Gaston
  • Gulasekaran Rajaguru


We study the political economy of labour market policies. First, it is shown that tax and redistributive considerations lead inside workers to prefer spending on active labour market programmes to passive spending, e.g., on unemployment benefits. We also show that greater active spending may be a feature of globalising economies. In the empirical work, panel data for OECD countries are used to examine the relationship between active and passive labour market spending, various measures of globalisation and controls relevant for analysing the political economy of labour market policies. Overall, we find that factors other than globalisation are more important determinants of labour market expenditures.

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  • Noel Gaston & Gulasekaran Rajaguru, 2004. "The Rise (and Fall) of Labour Market Programmes: The Role of Global and Domestic Factors," ISER Discussion Paper 0615, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0615

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    Cited by:

    1. Elisa BORGHI, 2010. "Trade openness and public expenditure on labor market policies," Departmental Working Papers 2010-21, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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