Institutional Arrangements, Employment Performance and the Quality of Work

33 Pages Posted: 8 Dec 2009

See all articles by Werner Eichhorst

Werner Eichhorst

Institute for the Study of Labor (IZA)

Paul Marx

IZA Institute of Labor Economics

Verena Tobsch

Helmut-Schmidt-University, Institute for HRM and International Management

Abstract

The observation of highly regulated, but successful economies has given rise to the hypothesis of various viable models of labor market adaptability. The paper presents a quantitative indicator that tries to avoid a simplified flexibility-rigidity dichotomy and provides a detailed picture of the varying institutional configurations by which flexibility is achieved. In order to capture different patterns of flexibility, we differentiate between five types of flexibility which can be combined (external-numerical, internal-numerical, external-functional, Internal-functional, and wage flexibility). Following the dominant analytical perspective in comparative labor market research the indicator is limited to the institutional level (de jure variables). Besides institutional variables influencing external numerical flexibility (employment protection, unemployment benefit system and active labor market policies, taxation and wage setting) we include further institutions which can be assumed to influence adaptability (education, working-time arrangements and firm-specific vocational training).

Keywords: labor market institutions, flexibility, indicators

JEL Classification: J38, J58, J28

Suggested Citation

Eichhorst, Werner and Marx, Paul and Tobsch, Verena, Institutional Arrangements, Employment Performance and the Quality of Work. IZA Discussion Paper No. 4595. Available at SSRN: https://ssrn.com/abstract=1519231

Werner Eichhorst (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Paul Marx

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Verena Tobsch

Helmut-Schmidt-University, Institute for HRM and International Management ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

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