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A Comparative Study of the Institutional Factors Influencing Working Poverty: Focusing on Two-parent Households in Developed OECD Countries

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  • Sang-Yong Sim

Abstract

This study identified institutional factors influencing working poverty by comparing developed OECD countries. This study used the working poverty rate of two-parent families with children under 18 as the dependent variable. Pooled time-series cross-sectional regression analysis with an unbalanced panel design was performed. The supply-side factors in mixed capitalist economies are ineffective at reducing working poverty reduction. As a result, the severity of working poverty is not transitory in many developed capitalist countries. However, making rash generalizations of poverty convergence is inadvisable because working poverty varies greatly by country. This research finds the factors that help reduce working poverty reduction include work-family reconciliation spending, family cash spending, proportional representation system, left seat, cumulative left cabinet, union density, wage setting coordination, and employment protection for regular and irregular workers. Therefore, the contributory factors influencing working poverty reduction must be found in each country’s institutional context and actors’ roles. Surprisingly, contrary to popular belief, the political institution variables and labor market institution variables have a greater effect on working poverty reduction than the welfare institution variables in general. The proportional representation system, employment protection for regular workers, and unionization rate are the most powerful variables. The result indicates that the performance of socialist democratic countries based on the high-road system is being maintained at present.

Suggested Citation

  • Sang-Yong Sim, 2018. "A Comparative Study of the Institutional Factors Influencing Working Poverty: Focusing on Two-parent Households in Developed OECD Countries," LIS Working papers 676, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:676
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