A Correspondence Analysis of Labour Market Institutions
The aim of the paper is to combine the systemic approach to labour market institutions with the analysis of the role played by the organisational forms of the bargaining partners, which favour coordination both inter partes and intra partes, in order to characterise the 19 countries considered. The methodology adopted is based on Multiple Correspondence Analysis and on the use of a device called doubling. The results show a clear-cut distinction between two groups of countries: the former is characterised by the absence of institutional mechanisms of coordination whereas the latter by the presence of the organisational forms. In details, the countries with regulated labour market functioning but without any control of wages at macroeconomic level have the worst long term unemployment performance. The inter partes coordination role of the government entails the choice of a specific trade-off between direct intervention in the bargaining process and fiscal policy. This trade off performs well when it is supported by intra partes coordination devices. The evidence confirms the existence of the institutional equivalence, leading to the conclusion that better unemployment performances go along with specific institutional set-ups.
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- Michael Greenacre, 2008. "Correspondence analysis of raw data," Economics Working Papers 1112, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2009.
- Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
- Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 6(4), pages 36-61, Winter.
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