Globalization and Protection of Employment

KOF Swiss Economic Institute Working Paper No. 238

59 Pages Posted: 1 Oct 2009

See all articles by Justina A. V. Fischer

Justina A. V. Fischer

Organization for Economic Co-Operation and Development (OECD); Stockholm School of Economics; University of Hohenheim

Frank Somogyi

Deutsche Bundesbank

Date Written: September 1, 2009

Abstract

Unionists and politicians frequently claim that globalization lowers employment protection of workers. This paper tests this hypothesis in a panel of 28 OECD countries from 1985 to 2003, differentiating between three dimensions of globalization and two labor market segments. While overall globalization is shown to loosen protection of the regularly employed, it increases regulation in the segment of limited-term contracts. We find the economic one to drive deregulation for the regularly employed, but the social one to be responsible for the better protection of workers in atypical employment. We offer political economy arguments as explanations for these differential effects.

Keywords: Globalization, international trade, integration, employment protection, labor standards, unions, cross-country analysis, panel data analysis

JEL Classification: C33, F15, F16, J81, J83, O57

Suggested Citation

Fischer, Justina A.V. and Somogyi, Frank, Globalization and Protection of Employment (September 1, 2009). KOF Swiss Economic Institute Working Paper No. 238. Available at SSRN: https://ssrn.com/abstract=1480715 or http://dx.doi.org/10.2139/ssrn.1480715

Justina A.V. Fischer (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Stockholm School of Economics

PO Box 6501
Stockholm, 11383
Sweden

University of Hohenheim

Fruwirthstr. 48
Stuttgart, 70599
Germany

Frank Somogyi

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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