So different yet so alike: micro and macro labour market outcomes in Germany and Spain

It is well known that German and Spanish labour markets are quite different from a macro point of view. In this paper, we look at these markets through the lenses of individual unstable spells. These include all forms of atypical employment (such as temporary contracts and mini-jobs) as well as unemployment. This combined unstable state captures a fuller picture of the individual experience of volatile income and uncertain employment status than unemployment alone. We find that the survival rates of unstable spells in the two countries are much more similar than those from unemployment. This suggests that the usual focus on unemployment stocks and durations exaggerates the contrast between the two countries in terms of workers’ experience of instability. We place these findings in the context of very similar aggregate shocks in the two countries and different policy choices on labour market reforms.

Fiscal and External Deficits Nexus in GIIPS Countries: Evidence from Parametric and Nonparametric Causality Tests

This paper investigates the relationship between fiscal and external deficits in five European Union countries (Greece, Ireland, Italy, Portugal, and Spain) using quarterly data for the period 1980:1–2020:1. Literature on the relationship between these series used linear techniques, but generally reported inconclusive results. Nonlinearity has been overlooked even though fiscal policy is likely to exhibit nonlinearity due to its sensitivity to political decisions. To capture this nonlinearity behaviour, nonlinear causality techniques are applied here in addition to the usual linear techniques used in the extant literature. The results show that there is evidence of unidirectional nonlinear causality from trade balances to government deficits in Greece and Italy, and a nonlinear unidirectional causality from government deficits to trade balance in Portugal. The results also indicate evidence of a nonlinear bi-directional causality between the trade and government balances in Ireland and Spain. The policy implication of these results is that governments of these countries need to address fiscal deficits to manage their trade balances. Policies that will improve the countries’ revenue base, such as tax and labour market reforms as well as capital market reforms to engender productivity and increase competitiveness, would be beneficial.

Understanding the positions taken by moderate union confederations and centre-left parties during labour market reforms in Portugal and Spain: Why the configuration of left parties and trade union confederations matters

The insider-outsider politics approach conjectures that moderate unions and centre-left parties safeguard the interests of insiders and neglect outsiders in labour market reforms. This article challenges this hypothesis. By comparing the positions taken by centre-left parties and moderate union confederations during labour market reforms in Portugal and Spain (1975–2019), it shows that while they may indeed protect insiders, they sometimes do the opposite. To explain this, the article argues that more attention must be paid to the configuration of left parties and confederations. In Portugal, where communist and radical left parties were strong, the centre-left was afraid of losing outsiders’ electoral support, and thus it did not follow a pro-insider strategy. This was reinforced by the fact that the centre-left had to face the opposition of a strong class-oriented confederation that was not willing to commit to two-tier reforms. This was not what happened in Spain. The centre-left, supported by a union confederation, undertook a two-tier reform in 1984 because there was a different configuration of left parties and confederations. Notwithstanding, this was not a stable equilibrium because this confederation changed its position over time when it realized the negative consequences of these reforms. Henceforth, their strategy became more pro-outsider.

Dualisation as Class Conflict: The Case of Labour Market and Vocational Training in Germany

Popular accounts of labour market reforms in Western Europe have identified a process of dualisation over the last three decades, whereby service sector employ-ment has been deregulated while workers in the core manufacturing sector still en-joy high levels of employment protection and high wages. Two different labour market logics are thought to be in place between core and peripheral sectors and to co-exist in a stable equilibrium nurtured by the co-incidence of interests between capital and labour in core manufacturing sector, who jointly acted to safeguard workers in core sectors at the expense of peripheral service sectors. Building on the case studies of labour market and vocational training reform in Germany, this ar-ticle challenges this account. It is argued that processes of dualisation are best conceptualised as the contested outcome of a political conflict between capital and labour. Dualisation is not a stable equilibrium but rather the result of bargain-ing processes between employers who push for liberalization and unions who try to prevent it or - at least - mitigate it.

Youth employment trajectories and labour market reforms during the Great Recession in Europe

The Great Recession had profound consequences for the quantity and quality of work for young people in European countries. Usual labour market indicators capture only some crisis effects, highlighting the need for a more dynamic and nuanced approach. As a result, this paper adopts an innovative approach to both the analysis of the integration of young adults (aged 17-34) on to the labour market and the study of the relationship between the labour market performance and policy making. La Grande Recessione generò un forte impatto sulla quantità e la qualità del lavoro dei giovani adulti nei paesi dell’Europa. Gli indicatori convenzionali del mercato del lavoro catturano solo alcuni degli effetti prodotti dalla crisi, sollecitando un approccio dinamico più variegato. Su questa strada si muove l’articolo, adottando un approccio innovativo sia all’analisi dell’integrazione dei giovani adulti (17-34 anni) nel mercato del lavoro sia allo studio della relazione tra le condizioni occupazionali e l’attività di riforma delle politiche del lavoro.

German pension and labour market reforms and the potential rise of social inequality amongst older workers and pensioners

Policymakers in all European countries have implemented reforms aimed at delaying retirement and extending working lives mainly to mitigate financial pressure on public pay-asyou-go pension systems and to increase the supply of skilled labour. This could be a reason for an increase of older workers’ labour force participation. This increase was particularly strong in Germany. In the paper at hand, we will answer two research questions: i) how can this steep increase in German older workers’ employment rate be explained? Furthermore, and related to this: ii) have policies for longer working lives fostered inequality? We base our analysis on an extensive literature review and descriptive data analysis. We conclude that the rise of the employment rate of older workers in Germany has several causes. First, the German labour market has performed very well, so that the policy debate has shifted from unemployment to a lack of (skilled) labour. Second, there is a strong increase of female labour market participation. Third, due to cohort effects, today’s older workers are healthier and better skilled than their predecessors. Finally, the pension and labour market reforms aimed at delaying retirement had an effect. However, we also find that lowskilled and low-income workers increasingly have to delay their retirement due to financial reasons. It seems that social inequalities in the retirement transition are increasing in Germany.