The Regulation of Employment

The regulation of job security is an important, but understudied, aspect of the welfare state. This contribution reviews academic debates that aim to explain the development of job security regulations across time and countries. While earlier debates focused on dismissal protection as an issue contested between capital and labour, the varieties-of-capitalism approach has emphasized the complementarity between job security regulations and the production models in coordinated market economies. Recently, political economists have begun to discuss diverging regulatory trajectories for open-ended and temporary employment contracts. This is argued to produce ‘labour market dualism’ and conflicts within the working class between ‘insiders’ and ‘outsiders’. The labour market crisis that began in 2008 seems to have changed the politics of job security regulations in those countries that were heavily affected.

Varieties of Capitalism and labour market opportunities for the youth

In this study, we examine the extent to which socio-economic institutions shape young people’s perceptions of labour market opportunity structures and their employment attitudes (i.e. skills and retraining). Building on the varieties of capitalism approach, we expect young people (aged 18–35) in coordinated market economies (CMEs) with encompassing welfare states to regard firm- and industry-specific skills as more important than their peers in liberal market economies (LMEs). To assess this proposition, we draw on original survey data and compare young people’s employment attitudes in five European countries: the United Kingdom (UK), which represents a typical liberal market economy, and Austria, Denmark, Germany and Switzerland as representatives of coordinated market economies. To what extent do different training regimes in CMEs and LMEs shape individual attitudes towards skill formation? The empirical analysis shows that young people’s attitudes with regard to the specificity of skills and the willingness to undertake retraining differ systematically between CME and LME countries and supports our argument that the specific socio-economic institutions matter.

Transitions to the Knowledge Economy in Germany, Sweden, and the Netherlands

The advanced economies are experiencing a set of shared challenges in the transition to a new “knowledge economy” characterized by rapid technological innovation and associated with a heightened premium on higher education. Yet individual countries are charting rather different courses as they navigate this transition. This chapter examines divergent trajectories of change in three coordinated market economies—Germany, Sweden, and the Netherlands. It argues that differences in the organization of business and labor, and in the institutions that structure their interactions with each other and with the state, have produced different coalitional alignments and led these countries onto divergent paths toward the knowledge economy today.

Unconstrained Capital? Multinational companies, structural power, and collective goods provision in dual VET

Collective goods provision, most prominent in coordinated market economies, depends on certain institutional conditions that constrain employer behavior and trigger cooperation. Increased capital mobility, characterized by new exit opportunities for business and an influx of multinational companies not anchored in their new home-countries’ institutional environment, loosens those ‘beneficial constraints’. I argue that these challenges do not lead to convergence between globalized locations as the structural power of business depends on the type of firms attracted by local institutional comparative advantages. Comparing collective skill formation in two heavily globalized cantons of Switzerland, I show that a region fundamentally relying on low-tax policies sees its hands increasingly tied in the face of globalization. It must accordingly reshape collective goods provision around policies favored by business. In contrast, a location with more diverse comparative advantages is able to implement more compelling policy elements that punish uncooperative firms.

The Effect of Varieties of Capitalism on the Relationship of Institutional Gearing and Economic Growth

The ways the firm solves coordination problems with the different stakeholders (or the varieties of capitalism of nations) affect economic performance. Institutional gearing is one of the main determinants of economic growth. Nevertheless, there are no studies that analyse the effect of varieties of capitalism on the relationship of institutional gearing and economic growth. The objective of the paper is to estimate the effect of the variety of capitalism on the relationship between the institutional gearing index and other macroeconomic control variables on the GDP per capita in a group of developed and developing countries. To do that 3 panel data models were estimated: one with fixed effects and two with random effects, for 31 countries for the period 2011-2015. We used 16 Coordinated Market Economies and Liberal Market Economies and 15 Hierarchical Market Economies. The results showed the varieties of capitalism affect the relationship between institutional gearing and economic growth. In the Coordinated Market Economies and Liberal Market Economies this effect is higher than in Hierarchical Market Economies. Governments of Hierarchical Market Economies should not only apply public policies to build functional institutions, but also encourage the positive complementarities among them.

The Same but Different: Regulating Zero Hours Work in Two Liberal Market Economies

The rise in zero hours contracts in liberal market economies (LMEs) has recently received much attention with calls for regulation to protect workers. LMEs typically adopt flexible labour market policies that are less regulated than coordinated market economies (CMEs) as a competitive advantage. In this paper we examine nuanced differences in the nature and regulation of zero hours work in the United Kingdom (UK) and Ireland. With an increased diffusion of zero hours work in both countries, we examine the different responses taken by these similar LMEs to this contemporary employment issue. We examine whether, as expected in an LME context, there is weak regulation in both countries and the factors influencing this. We find subtle but important differences between regulations of zero hours contracts. We conclude by discussing the possible implications of the UK’s exit from the European Union (EU) (Brexit) for the regulation of precarious work.