Posted Workers: Complements or Substitutes for Local Employment? Empirical Evidence from the EU

36 Pages Posted: 2 Jul 2013 Last revised: 13 Feb 2014

See all articles by Lucia Dalla Pellegrina

Lucia Dalla Pellegrina

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Margherita Saraceno

University of Pavia - Department of Law

Date Written: July 1, 2013

Abstract

This paper investigates the effects of the intra-European posting of workers on domestic labour markets in the years 2007-2009. Instrumental variables related to migrant labour and neighbouring countries’ populations are used to address the endogeneity between posting and labour market features. Contrary to conventional wisdom, we find that an intensification of posting inflows is not likely to displace domestic workers. Instead, an increase in posting from abroad may rise both domestic labour costs and productivity. Results point toward the complementarity between domestic and posted workers, so that posting can actually improve labour efficiency and put upward pressure on labour costs.

Keywords: Posting of Workers Directive, employment, displacement, labour cost, productivity

JEL Classification: K31, K33

Suggested Citation

Dalla Pellegrina, Lucia and Saraceno, Margherita, Posted Workers: Complements or Substitutes for Local Employment? Empirical Evidence from the EU (July 1, 2013). Paolo Baffi Centre Research Paper No. 2013-136; Amsterdam Law School Research Paper No. 2013-34; Amsterdam Center for Law & Economics Working Paper No. 2013-08. Available at SSRN: https://ssrn.com/abstract=2287841 or http://dx.doi.org/10.2139/ssrn.2287841

Lucia Dalla Pellegrina (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Margherita Saraceno

University of Pavia - Department of Law ( email )

Pavia, I-27100

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