The Impact of Labour Market Reform Policies on Insiders’ and Outsiders’ Low-Wage Risk

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Taking a cross-national comparative perspective, this study analyses differences in individual determinants of the low-wage risk across institutional settings. It builds on previous research that dealt with the impact of labour market deregulation and commodification on the distribution of labour market risks in advanced economies. It is widely held that such reforms have a particularly adverse effect on labour market outsiders, specifically on entrants to the labour market. We seek to differentiate this assumption and to show that this presumed effect is conditional on the configuration of the bargaining system. Using hierarchical models that match EU-SILC microdata with several macro indicators for 20 countries, we find that, in contexts with a high degree of bargaining centralisation, the relative low-wage risk of entrants and re-entrants from inactivity increases with commodification and deregulation. If bargaining is decentralised, however, the effects of labour market reform policies on insider/outsider disparities are marginal. Additionally, we show that the same still holds true if a measure of employment protection legislation (EPL) is regarded as the moderating institutional filter. We explain these findings with theoretical concerns based on the concept of closure. These predict that centralised bargaining structures and high EPL (or, rather, closed employment relationships) will systematically channel risks produced in the political framework to the periphery of the labour market. Terms of use: Documents inThis is a pre-copy-editing, author-produced PDF of an article accepted for publication in European Sociological Review following peer review. The definitive publisher-authenticated version The Impact of Labour Market Reform Policies on Insiders' and Outsiders' Low-Wage Risk / Marco Giesselmann. In: European Sociological Review 30 (2014), 5, p. 5492

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