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Globalization and labor market institutions: International empirical evidence

  • Potrafke, Niklas

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 cross-sectional 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.

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Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 19288.

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Date of creation: 2013
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Publication status: Published in Journal of Comparative Economics 3 41(2013): pp. 829-842
Handle: RePEc:lmu:muenar:19288
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