Economic Globalisation and Convergence in Labour Market Regulation: An Empirical Assessment

Amercian Journal of Comparative Law, July 2012, Vol 60, pp. 703-742.

40 Pages Posted: 31 Aug 2011 Last revised: 15 Nov 2012

See all articles by Peter G. Gahan

Peter G. Gahan

University of Melbourne - Department of Management and Marketing

Richard Mitchell

Monash University - Department of Business Law & Taxation

Sean Cooney

University of Melbourne - Law School

Andrew Stewart

Adelaide Law School

Brian Cooper

Monash University - Department of Management

Date Written: August 31, 2011

Abstract

A major question for the comparative analysis of industrial relations and labour market institutions has been the extent to which labour laws in different countries have converged or diverged over time. A second question is whether any convergence between labour law systems is associated with economic globalisation. Using a new measure of the ‘protective strength’ of a country’s labour market regulation (the Longitudinal Labour Regulation Index), this study compares the evolution of labour laws in six countries (Australia, France, Germany, India, the United Kingdom and the United States) for the period 1970 to 2005. We assess whether there has been a convergence in the protective strength of labour market regulation between these countries or ongoing divergences between them. In particular, we test whether there is evidence of ‘formal’ or ‘functional’ convergence, ‘weak’ or ‘strong’ convergence, ‘simple’ or ‘bipolar’ convergence, and whether convergence is associated with globalisation and economic integration between the countries included in our study. Our analyses show that over the period from 1970 to the mid-1980s the protective strength of labour laws of different countries actually diverge, but began to converge thereafter. Although we find evidence of both formal and functional convergence during this later period, this propensity has been weak, and tended to a pattern of ‘bipolar convergence’. At the same time, the data do not indicate that any of these processes of convergence were associated with ‘Americanisation’ of labour law, or a race to the bottom.

Keywords: labour law, convergence, globalization

JEL Classification: F02, F14, F15, K31, P51

Suggested Citation

Gahan, Peter G. and Mitchell, Richard James and Cooney, Sean and Stewart, Andrew and Cooper, Brian, Economic Globalisation and Convergence in Labour Market Regulation: An Empirical Assessment (August 31, 2011). Amercian Journal of Comparative Law, July 2012, Vol 60, pp. 703-742. , Available at SSRN: https://ssrn.com/abstract=1920536 or http://dx.doi.org/10.2139/ssrn.1920536

Peter G. Gahan (Contact Author)

University of Melbourne - Department of Management and Marketing ( email )

5th Floor Babel Building
Melbourne, Victoria 3010
Australia
+61390359740 (Phone)
+61393494293 (Fax)

HOME PAGE: http://www.managementmarketing.unimelb.edu.au/who/staff.cfm?StaffId=241

Richard James Mitchell

Monash University - Department of Business Law & Taxation ( email )

Caulfield Campus
Sir John Monash Drive
Caulfield East, Victoria 3084
Australia

Sean Cooney

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Andrew Stewart

Adelaide Law School ( email )

Ligertwood Building
Adelaide 5005, South Australia SA 5005
Australia

Brian Cooper

Monash University - Department of Management ( email )

Wellington Road
Clayton, Victoria 3168
Australia
+61 3 990 31233 (Phone)
+61 3 990 32718 (Fax)

HOME PAGE: http://www.buseco.monash.edu.au/mgt/staff/cooper_brian.php

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