The labor market as a social institution
... In contrast, many institutionalists, basing their ideas on contextualized efficiency and path-dependent national patterns of development, argue that national models are hard to change due to their institutional embeddedness and will persist within their national tracks (Solow 1990 Soskice 1990Soskice , 1999Schettkat 2003). However, disagreements among institutionalists remain over the causes of path-dependency. ...
... However, disagreements among institutionalists remain over the causes of path-dependency. Some institutionalists, including Solow (1990), Dore (2000), and DiMaggio and Powell (1991) emphasize the effect of informal culture and the taken-for-granted cognitive framework as causes for institutional resilience to change. On the other hand, Pierson (1994) and Esping-Andersen (1996) hold that due to embedded interests, welfare states are hard to change once they have been established. ...
By examining varieties of labor market readjustments in advanced
capitalist societies under globalization, particularly the successful social
pacts of Denmark and the Netherlands, this paper criticizes prevalent
theories including neoliberalism and neoinstitutionalism. Facing new
challenges under globalization, advanced countries have adjusted their
existing labor market regimes, neither converging toward the
Anglo-Saxon model, as the neoliberal argument predicts, nor persisting
in their national patterns, as path-dependent neoinstitutionalism predicts.
Furthermore, successful adjustments through social pacts do not
converge toward a single best form, but create new varieties of labor
market regimes through various trade-offs in the collective deliberation.
To understand these dynamic readjustments, this paper emphasizes the
new conception of "politics among reflexive agents,"in which social
agents actively reinterpret existing institutions, rather than passively
being constrained by them.
... In contrast, many institutionalists, basing their ideas on contextualized efficiency and path-dependent national patterns of development, argue that national models are hard to change due to their institutional embeddedness and will persist within their national tracks (Solow 1990 Soskice 1990Soskice , 1999Schettkat 2003). However, disagreements among institutionalists remain over the causes of path-dependency. ...
... However, disagreements among institutionalists remain over the causes of path-dependency. Some institutionalists, including Solow (1990), Dore (2000), and DiMaggio and Powell (1991) emphasize the effect of informal culture and the taken-for-granted cognitive framework as causes for institutional resilience to change. On the other hand, Pierson (1994) and Esping-Andersen (1996) hold that due to embedded interests, welfare states are hard to change once they have been established. ...
By examining varieties of labor market readjustments in advanced
capitalist societies under globalization, particularly the successful social
pacts of Denmark and the Netherlands, this paper criticizes prevalent
theories including neoliberalism and neoinstitutionalism. Facing new
challenges under globalization, advanced countries have adjusted their
existing labor market regimes, neither converging toward the
Anglo-Saxon model, as the neoliberal argument predicts, nor persisting
in their national patterns, as path-dependent neoinstitutionalism predicts.
Furthermore, successful adjustments through social pacts do not
converge toward a single best form, but create new varieties of labor
market regimes through various trade-offs in the collective deliberation.
To understand these dynamic readjustments, this paper emphasizes the
new conception of "politics among reflexive agents,"in which social
agents actively reinterpret existing institutions, rather than passively
being constrained by them.
... The analysed topic lacks of an affirmed economic literature; however, there exist several publications commissioned by international organizations, and the latter have been considered thoroughly in this study. (Solow 1990(Solow , 1998 ...
... • the one with endogenous wage and described by (34) ...
This thesis tries to modify the standard job search model with unemployment benefitinserting three different policies: the addition of a tax on the wage to fully coverthe active and passive policies on the labour market; a working hours reduction; theimplementation of an hiring incentive.This ad hoc model aims to verify whether a specific policy mix can make anexogenous reduction in working time sustainable. The first part of this thesis, indeed,describes the logic behind each choice of our structure in a descriptive way. Thereforewe focus the attention on which are the possible driving variables of a working hoursreduction model, why we prefer an exogenous variation to a market self-adjustment,which relationship there is between working hours and labour productivity and howwe have imagined the interactions between our specific policies .Then we actually develop our model. We have chosen a step-by-step modelbuilding; indeed we have added one at time our modification to the standard jobsearch model. This procedure allows to analyse separately the effects of each of ourpolices. Unfortunately the mathematical analysis revealed itself to more complexthan we expected; for this reason the actual model is available only for the tax-financed unemployment subsidy and regarding the other insertions we give onlysome intuitions.
... The paper presents an agent-based model (ABM) that investigates the effects of different "archetypes of capitalism" (on the general perspective, see Boyer, 1988, Aoki and Dosi, 1992, Hall and Soskice, 2003, Soskice, 2007 -in terms of regimes of labour governance defined by different mechanisms of wage determination, firing, labour protection and productivity sharing -upon (i) labour market regularities, and (ii) macroeconomic dynamics (long-term rates of growth, GDP fluctuations, unemployment rates, inequality etc.). 1 Indeed labour markets are characterised by rich institutional specificities reflecting the distinctive feature of labour as a quite special kind of commodity (cf. the insightful discussion in Solow, 1990). Such institutions are likely to yield significantly different patterns of labour utilization and mechanisms of wage formation. ...
... The empirical evidence on such relation is all but conclusive: in fact it implies that the "queues" of unemployed people are able to influence the monetary wage rate paid by firms. Doubts on the Phillips curve are cast from Solow (1990) to the more recent works of Blanchard et al. (2015) and others. ...
Wages are an element of cost crucially affecting the competitiveness of individual firms. But the wage bill is also a crucial element of aggregate demand. Hence it could be that more “flexible” and “fluid” labour markets, while allowing for faster inter-firm reallocation of labour, may also render the whole economic system more fragile, more prone to recession, and more volatile. In this work we investigate some conditions under which such a conjecture applies. The paper presents an agent-based model that investigates the effects of two “archetypes of capitalism” – in terms of regimes of labour governance defined by the mechanisms of wage determination, firing, labour protection and productivity gains sharing – upon (i) labour market regularities and (ii) macroeconomic dynamics (long-term rates of growth, GDP fluctuations, unemployment rates, inequality, etc.). The model is built upon the “Keynes meets Schumpeter” family of models (Dosi et al., 2010), explicitly incorporating different microfounded labour market regimes. Our results show that seemingly more rigid labour markets and labour relations are conducive to coordination successes leading to higher and smoother growth.
... Labour markets are deeply social institutions (Solow, 1990). Flanking the operation of market mechanisms, webs of institutions seek to address the inequality of the exchange relationship between employers and workers, and to sustain a degree of "economic democracy" in the face of the structural desire of capital interests to control the labour process (Braverman, 1974;Dahl, 1986). ...
... Even in a labour market characterized by insignificant trade unions, weak labour law and absence of monopoly companies, wages are not set by the mere interplay of supply and demand. Everywhere, labour productivity and thus wage setting is affected by norms, by what we perceive as fair(Solow 1990;Weil 2014).In absolute levels, there could indeed have been long-term differences. The SJ employees At least one could imagine that SJ as a state employer had special rules regarding employment. ...
... With the exception of the human capital theory, the internal labor market theory emphasizes that wage levels are closely related to the institutions within a firm (Piore 1970). Furthermore, the efficiency wage hypothesis emphasizes that a firm may provide high wages to prevent employee turnover or to motivate them to work with more effort, which can increase firm productivity and efficiency in the long run (Stiglitz 1974(Stiglitz , 1985Salop 1979;Shapiro and Stiglitz 1984;Solow 1989). Moreover, institutional economists are concerned that implicit rules remain that were formed by groups or organizations (e.g., trade unions), which can affect the wage level decision process. ...
In China, despite the drastic economic transition from a planned system to a market economy, the influences of the Communist Party of China (CPC)’s organization on firm management in both the public and private sectors are still remarkable. This study performs a meta-analysis to examine the impact of CPC membership on wage levels in China using 622 estimates extracted from 71 English and Chinese papers. The results of meta-synthesis suggest that CPC membership positively affects wage levels. They also reveal that the effect size of CPC membership is greater for state-owned enterprises, urban regions, female workers, and regular wages, as compared with privately owned enterprises, rural regions, male workers, and performance pay. The test results of publication selection bias based on the FAT-PET-PEESE approach indicate that the collected estimates contain genuine evidence of the wage premium of CPC membership, and its true impact takes a value within a range of 0.0414 to 0.0431 in terms of the partial correlation coefficient.
... This research reveals a rich diversity of employment arrangements around the world and a wide variety of distributive outcomes in wages, household income, job quality and lifetime prospects. Moreover, this theoretical tradition is premised on the ontological notion that labour markets are socially constructed, an idea accepted by some leading economists (Solow 1990), but mostly forgotten or ignored by others. This approach rejects the universalist theorising common to neoclassical economics, as well as some strands of Marxist theories from the USA. ...
... 7. In the mainstream view, institutions and imperfections matter and are incorporated in the neoclassical labour market (Solow, 1990). Nevertheless, they change only the real variables, like the equilibrium levels of unemployment and real wages, with no consequences to nominal wage and price changes. ...
... [I]t cannot be understood without taking account of the fact that participants, on both sides, have welldeveloped notions of what is fair and what is not" (Solow, 1990, 3). Note that Marshall's analysis of the main forces operating in the labour market also emphasises the importance of fairness, as Solow (1990) remarks. ...
Conventions are a type of social structure which enable human actions and help co co-ordinate economic activities. They are prior to, and the structural conditions for, actions. Conventions are the framework upon which agents rely for decision-making processes in the face of uncertainty. It is rational for agents to fall back on conventions, because in a world where knowledge is fallible and contingent, conventions provide a sort of tacit knowledge acquired by common, intersubjective experience. So far, the study of conventions has not received an integrated theoretical treatment from the economics literature. By contrast, the thesis systematises the ciscussion of conventions by consolidating the bulk of knowledge which is dispersed in a vast number of unconnected works. The thesis brings together the economics of complexity, time, and uncertainty into one integrated framework of analysis, which has not been tried before either. This theoretical setting structures and organises the ensuing arguments of the core treatment of the nature, dynamics and rationality of conventions. In preparing the foundations for the work as a whole the thesis also reviews critically many of the key concepts of conventional economics. The core of the thesis addresses the concept of conventions by integrating and developing Keynes's version of convention and Hayek's notion of social rules of conduct. In this undertaking, the idea of limited knowledge is central and the conceptions of general equilibrium and optimising procedures are foreign. The thesis investigates how conventions change. From the point of view of the capitalist firm, conventions take the form of routines. Routines are the basis for non-conventional, non-conformative action, and, therefore, for successful innovation. The way novelty arises has been explored in the works of Schumpeter (competition through innovation), Hayek (competition as a discovery procedure), Keynes (animal spirits) and the evolutionary approach of economic change (Nelson and Winter, Dosi). The thesis integrates and develops their approaches. The thesis also examines a key convention in the discourse of economics: optimising rationality. The study of the nature of conventions suggests an alternative, more comprehensive account of rationality under uncertainty, based on the ideas of Simon, Keynes and Hayek, in which optimisation procedures are seen as a special case with limited scope. A "reconstruction of the economic man" is proposed. The analytical results of the core part are then "applied" in order to uncover the conventions underlying price formation and the operation of the labour market, both in a large measure the result of normative factors.
... The World Bank stands in stark opposition to this position. It still assumes, despite longstanding intellectual arguments by Nobel-prize winning economists and developing country evidence to the contrary (Ghosh, 2016;Solow, 1990), including World Bank papers (Bhorat et al., 2017), that labour institutions distort an assumed natural state of labour market functioning. It argues that minimum wages (and other labour regulations) 'ensure that informality is appealing for all but the most productive workers before the economy grows' (World Bank, 2019: 31). ...
In a critical review of seven prominent flagship reports from five international organisations – the International Labour Organization (ILO), Organisation for Economic Co-operation and Development (OECD), United Nations Industrial Development Organization (UNIDO), United Nations Development Programme (UNDP) and World Bank – this article explores how the policy narratives set out during 2019 and early 2020 have characterised the major future of work challenges associated with new technologies and inequality. It identifies some similarities in viewpoints, including about the unevenness of job changes caused by new technologies and about the declining labour income share, a key measure of inequality. However, there are major points of differentiation. The ILO, OECD and UNDP express serious concerns about the interaction between new technologies and growing inequalities, on the one hand, and a rise in precarious work, concentration of corporate power and erosion of labour bargaining power on the other. Also, UNIDO emphasises the inequalities in technological capacities between developed and developing countries, which make it difficult for markets to distribute the gains from growth evenly. While the World Bank makes some concessions, it remains less open to real-world heterodox evidence about how labour markets function in society. The World Bank aside, there is a growing consensus that labour institutions around the world need to be reinvigorated in order to respond to the challenges facing the future of work.
... Investing in the development of human capital is an urgent research topic of a number of scientists. Formation and development of human capital theory, efficacy of investment in this asset was initially described in the scientific studies of Becker (1993), Kendrick (1976), Schultz (1971), Solow (1990), Thurow (1970), and others. The basic provisions concerning human capital are reflected in the works of List and Rasul (2010), and others. ...
Our research is devoted to the investigation of theoretical aspects of human capital formation through human potential migration redistribution and investment process. This topic was chosen because in the modern conditions human potential development becomes one of basic factors of the competitiveness and economic growing of countries. Migration redistribution becomes an effective mean of indemnification of human potential losses, gives additional possibilities to its development financing, quantitative increase and additional innovative changes in the context of information society and knowledge-based economy development. The detailed analysis of the human potential development and implementation on the global labor market, the emergence of the migration cycle, and process of human potential transformation to capital that is able to provide the socio-economic and individual effects receiving was conducted in the article. Results of this study have theoretical and practical significance. They can be used as a basis for further scientific studies in this field and can be used by state institution in the direction of strategic management of human resources through the human potential migration redistribution and investment process that implies expansion of investment instruments, market infrastructure subjects development all this may provide the reception of material or status effects as a result of human potential capitalization in the labour market.
... More favourable employment conditions are measured by the synthetic indicator which summarizes many relevant features of both labour demand and supply: the availability or, on the contrary, the lack of jobs, the nonparticipation rate, job (in)security, the incidence of irregular jobs which breaches the principle of equity that should be at the basis of labour relations (Solow, 1990), gender (in)equality in job opportunities and difficulties faced by women in balancing life and work; the incidence of long-term 14 These findings hold also when the model is estimated with OLS and the outcome variable has a cardinal meaning (4 is twice 2, 2 is twice 1 and so on). Moreover, in this case, also the «separated» category of the marital status is always negative and significant. ...
... More specifically, the attention traditionally allocated to actual labour at the shopfloor level began to be combined with greater emphasis on processes of social construction. Markets, for example, were thus treated as social constructions (Solow 1980), defining the rules of exchange specific to given occupations. Occupational identities, on one hand, and career rules and benefits, on the other hand, followed an interactive trajectory characterized by debate in the socio-economic and socio-political arenas (Pugliese 1993;Reyneri 1996). ...
After a short background indicating
the main socio-political transformations which occurred in Italy since
the Second World War and their impact on labour relations, the first part
of the chapter examines the historical foundations and the evolution of the sociology of
work in the country identifying its main themes and disciplinary specificity.
In the second part, we will confront more directly the question of inter-disciplinarity
and cross-boundary fertilization with regard to the sociology
of work in Italy. This will highlight how it is possible to be dynamic and distinctive
while confronting institutional and political change.
... In this naturalistic framework, what propels economic history? The neoclassical view emphasizes the role of technological change and population growth, as formalized in the Solow growth model (Solow 1970). Other historical changes leave little or no trace. ...
... However, for Blanchard (2018), the concept of the natural rate is compatible with imperfections. 7 In the mainstream view, institutions and imperfections matter and are incorporated in the neoclassical labour market (Solow 1990). Nevertheless, they change only the real variables, like the equilibrium levels of unemployment and real wages, with no consequences to nominal wage and price changes. ...
The aim of this paper is twofold: first, to analyze critically the mainstream empirical and theoretical attempts to keep the accelerationist Phillips curve alive; and second, to propose an alternative way of thinking about the relation between (wage and price) inflation and unemployment rate. The mainstream view, which is based on the idea of scarcity of labour and full incorporation of expectations in wages, will be criticized. And it will be shown that all the recent empirical puzzles can be better understood if we drop these neoclassical hypotheses about the functioning of the labour market and replace them by a conflict augmented Phillips curve in which inflation is a result of conflicting claims over income distribution, which are mediated by institutional arrangements and political power relations and there is no labour scarcity.
... As wages in the primary sector do not fully reflect prices, labour is displaced into the secondary sector, where competition is further intensified (Yellen, 1984). The effect is to worsen job insecurity in the secondary sector, and to induce involuntary unemployment, as workers are unable to ‗‗price themselves'' back into jobs no matter how low the wages they are prepared to accept (Solow, 1990). For employers in the primary sector, this may be a welcome side-effect of their own wage bargaining strategies, as the existence of a ‗‗reserve army'' of labour in the secondary market enhances the disciplinary threat of job loss for those in the primary sector (Bulow and Summers, 1986). ...
ABSTRACT
Casual work is increasingly becoming the norm of a global economy as companies undergo restructuring, privatization, concentration on core activities and modifications in work organization and technology. These factors certainly affect traditional employment relations and the exercise of freedom of association and collective bargaining rights inherent in them. Flexible work patterns are now becoming dominant in developing countries and this makes it more difficult to organize workers for collective representation. A fall-out of globalization in Nigeria is the increase in CWAs. Workers in this form of work arrangements are subject to insecurity and little or no protection as labour legislation can seldom be effectively applied to them. Globalization is said to provoke the deterioration of working conditions in developing countries like Nigeria. According to the International Labour Organization (ILO) statistics union membership though still significant in large work places, has decreased in almost all parts of the world in the last decade. The relevance of collective representation is not always obvious when work places are small or in activities where there is little experience of collective organization and representation of interests. These factors are leading to a widening representational gap in the world of work. Based on these assertions, this study tends to examine casual work arrangements and freedom of association in Nigeria. A labour market segmentation theory provided the conceptual framework.
Keywords: Casual workers, globalization, International Labour Organization (ILO), Freedom of association, Casual work arrangements (CWAs)
... More favourable employment conditions are measured by the synthetic indicator which summarizes many relevant features of both labour demand and supply: the availability or, on the contrary, the lack of jobs, the nonparticipation rate, job (in)security, the incidence of irregular jobs which breaches the principle of equity that should be at the basis of labour relations (Solow, 1990), gender (in)equality in job opportunities and difficulties faced by women in balancing life and work; the incidence of long-term 14 These findings hold also when the model is estimated with OLS and the outcome variable has a cardinal meaning (4 is twice 2, 2 is twice 1 and so on). Moreover, in this case, also the «separated» category of the marital status is always negative and significant. ...
The aim of this paper is to investigate the relationship between multidimensional objective well-being and people’s happiness. Differing from previous economic studies, mainly focused on the effect of production and «one-variable» measures of socio-demographic factors on happiness, we account for the multidimensional nature of people’s objective well-being by resorting to a recently-created composite index of progress. It combines ten synthetic sub-indicators, each describing a respective dimension
of objective well-being, computed by combining 57 elementary macroeconomic and social variables. Using a panel setting, our findings provide evidence of a positive and significant relationship between subjective and multidimensional objective well-being and its domains. Results suggest that improving the quality of the exogenous conditions that determine economic and social progress may contribute to enhancing the subjective well-being of individuals living in an area, which is the ultimate goal of welfare policies.
... El incen�vo será menor cuando menores sean las obligaciones legales de la contratación, las prestaciones y de la jornada de trabajo, es decir, el nivel del salario de eficiencia está condicionado por la protección legal al trabajo. 6) En presencia de desocupación involuntaria, el discurso neokeynesiano de la "equidad" (Akerlof, 1982;Blinder, 1988;Solow, 1990), según el cual el nivel del salario no �ende a bajar por "convenciones sociales" de equidad moralmente aceptada entre los trabajadores y sus contratantes, por lo cual sería inconveniente para estos úl�mos pagar un salario menor al de equidad porque -argumentan-sus trabajadores no cooperarían para adiestrar a nuevos trabajadores que aceptasen salarios más bajos, en la medida en que considerarían estar denigrando las costumbres. Sin embargo, las convenciones dependen y pueden cambiar por el buen o mal funcionamiento de la economía y, especialmente, por la capacidad de la sociedad para defender niveles estándar de moralidad social o bien ceder para aminorar los costos de los patrones. ...
... Wage expectations reflect how people make judgments on their social status (Solow, 1990). For example, expected wages demonstrate how jobseekers perceive their status in the labor market. ...
In an emerging field such as social enterprise, it is important for an organization to secure legitimacy to obtain resources and sustain its business. Specifically, when a government distributing subsidies does not have adequate information to decide which organization is trustworthy, it is the legitimacy-seeking activities of a social enterprise that determines who receives a subsidy; this, in turn, decides which organization will survive. One of the most effective ways to gain legitimacy is to explicitly emphasize in the public promotion that the organization devotes to its social mission. In the case of Work Integration Social Enterprises (WISEs), an organization emphasizes its social employment of the disadvantaged individuals. However, we argue that social enterprises’ public promotion that emphasizes social employment can lower the expected wage, job satisfaction, and organizational commitment of the employees who are hired due to their disadvantaged social status. This is because such obvious promotional messages makes the employees more keenly aware of their disadvantaged status; as a result, this reinforces their self-prejudice that they are not competitive enough in the labor market. We test our hypotheses in the context of South Korean WISEs and found general support for our arguments.
... A third approach, suggested by Robert Solow (1990), is to analyse the labour market as a social institution, and to attach the notion of fairness to a higher wage than that which would equate total demand for and supply of labour. The unemployed do not underbid this wage, in their self-interest, because at some later date they expect to benefit from it. ...
Globalization is defined in economic terms to mean freer flows of trade, foreign direct investment and finance, and liberalization of trade and investment policies. Impacts of globalization and information technology are examined in terms of growth and productivity, poverty and income distribution, and employment. Experiences of Africa, East and Southeast Asia, South Asia, and Latin America in the era of globalization are discussed. It is argued that benefits of freer trade and capital flows need to be managed carefully in order to minimise the costs and maximise gains.
... Bevegelsene i tilbud og etterspørsel, priser og lønning lar seg ikke helt forklare som følge av enkle profittmotiver. En anerkjent økonom har for eksempel foreslått at for å forstå bevegelsene i prisen på arbeidskraft, må folks ideer om rettferdighet tas hensyn til (Solow, 1990). Marx åpnet for en ny forståelse av arbeidskraften som del av kapitalgrunnlaget. ...
On the conditions for social entrepreneurship in Norway. On how to create a space in the intersection between the market, organized worklife, the welfare state and civil society. (In Norwegian).
https://www.cappelendammundervisning.no/_sosialt-entrepren%C3%B8rskap-i-norge-benedicte-br%C3%B8gger-9788202394745
The paper presents an efficiency wage model where worker effort depends on own wages relative both to wages of other workers in the firm and to similar workers in other firms. First, we show how the Solow conditions are modified if internal comparison effects are at work. Second, we discuss the effect of internal wage comparison on wage inequality within firms. Third, we study unemployment and relative wage determination within a general equilibrium model, and analyze the effect of technological change and various tax policies on equilibrium unemployment and relative wages. Finally, the short‐run effects of aggregate demand shocks are analyzed.
Résumé
Les auteurs utilisent des données sur la couverture conventionnelle dans 80 pays pour évaluer l'apport des mécanismes d'extension des conventions collectives en tant que moyen d'instaurer des normes sociales et des conditions d'emploi minimales. Ce mode de réglementation, qui dépend des autorités publiques, a pour spécificité de reposer sur des compromis négociés par des organisations indépendantes, autonomes et représentatives. Il présente de ce fait certains avantages du contrat, en plus des caractéristiques des textes de loi. Particulièrement souple et adaptable, il permet de couvrir des travailleurs vulnérables, qui seraient privés de protection autrement.
Resumen
A partir de datos sobre cobertura de la negociación colectiva en 80 países, los autores analizan las ventajas de la extensión de los convenios colectivos como herramienta política para preservar unos mínimos en cuanto a condiciones de trabajo y empleo. Como instrumento regulador, la peculiaridad de un convenio de eficacia general es que se fundamenta en el acuerdo entre organizaciones independientes, autónomas y representativas, pero es emitido por las autoridades públicas, lo que le confiere tanto las ventajas de un contrato como las de un estatuto. La extensión puede así amparar a trabajadores vulnerables que, de otro modo, quedarían desprotegidos, sin menoscabar la adaptabilidad de esta modalidad reglamentadora.
This chapter asks what can be said on the determinants of wages in a non-neoclassical perspective. It starts by arguing that the previous chapters imply that the neoclassical labour demand curve is not an acceptable notion (Keynes’s arguments in its support are shown to be unconvincing); then a spontaneous tendency of markets to produce full employment cannot be assumed to exist, and one must accept the general existence of unemployment. Then a fundamental question is, why wages do not decrease in spite of the presence of excess labour supply. The chapter discusses the explanations offered by the main current theories of the working of labour markets: search theory, implicit contracts, insider–outsider theory, efficiency wages, models of trade unions, the Solow–Hahn approach. Even when not undermined by a necessary reliance on the neoclassical labour demand curve, these theories are found to underestimate the importance of conflict, and of class solidarity and collective action; a classical answer to why wages don’t decrease appears clear although not yet formalized—much work remains to be done. Anyway downward wage rigidity does not explain the level of wages, so the chapter poses this question and examines the main non-neoclassical theories of the long-run evolution of real wages: the Cambridge approach, the Kaleckian approach, the Marx–Goodwin approach, the Pivetti approach. The online Appendix explains the notions of Stahl–Rubinstein bargaining and of generalized Nash bargaining used in the chapter; then it reports further comments by De Francesco on the Solow–Hahn approach, with some additional comments of my own.
A sociological analysis of the factors of integration of young generations into active economic life is based on a study of the values of young people in relation to employment and professional growth. The information society has two key parameters that influence the construction of the trajectory of educational, professional, labor or entrepreneurial activity — the significant role of knowledge in creating value and the digital space as a source of information and the place for individuals to fulfill themselves in society and the social and professional community. A theoretical analysis of labor socialization allows researchers to move on to the results of empirical studies carried out with the participation of authors in 2017 and 2019-2020. The data obtained are evaluative in nature and allow authors to draw conclusions about the influence of the media space on young people entering working age taking decisions on choosing a profession and a form of economic activity, planning employment and career growth.
Using data on collective bargaining coverage for 80 countries, the authors analyse the merits of using the extension of collective agreements as a policy tool for creating a floor for conditions of work and employment. Issued by public authorities, this regulatory instrument is distinctive in that it is based on agreement between independent, autonomous and representative organizations. This gives it some of the advantages of a contract as well as those of a statute. The extension of collective agreements by public authorities can provide coverage for vulnerable workers who may not otherwise have access to social protection, while offering a highly responsive form of regulation that can be adapted to particular circumstances.
This article aims at participating in the discussion about the effects of globalization on labour
market institutions. Most surveys show that globalisation brings about a greater flexibility in the
organization of labour, higher wage dispersion and social dumping. According to these surveys,
globalisation has two basic outcomes. First of all, it sharpens the risk of layoff for the low-skilled
workers, as labour market requires more qualified employees and product and process innovations,
in order to face the world competition. Second, globalisation provokes a huge institutional change
in the labour market. Namely, the increased capital mobility sparks off a re-allocation of resources,
amplified by the trade integration, towards countries where Trade Unions are less powerful and
taxation is lower. Actually, shareholders may decide where to invest and where to locate firms;
therefore they have gained a strong bargaining power: policy makers may mitigate the threat of
relocation or instead encourage labour market deregulation in order to avoid capital flight. Finally,
the economic and financial crisis, in 2008, reinforced the political consensus on labour market
deregulation and since then, European Union has been forcing Member States to modify those
regimes considered too rigid, justifying their policy suggestion with the idea that deregulation
fosters employment and productivity.
Applying the approach known as “Grounded Theory” we analyse ad hoc data, in order to find out
whether or not key changes in the labour market institutions have taken place. In addition, we aim
at finding out which is the role of institutional context in shaping the reform of the labour market.
Finally, some policy suggestions are provided.
This chapter argues that modern readers can benefit from studying the classics today, because the classical approach to studying an economic system in motion under a cumulative process of division of labour offers a superior starting point for analysing salient properties of capitalist market economies. While modern mainstream economics has adopted, but variously narrowed some of the ideas contained especially in the works of Adam Smith and less so in the works of David Ricardo and Karl Marx, its historical development involved a growing distance and even opposition to the concerns, methods and analytical approaches of the classical economists. This implied a remarkable loss of the huge analytical potentialities offered by the classical economists.
Economic theory and institutional approaches lack a close connection. Efforts to develop an analysis of institutions within a neo-classical framework have shown serious limitations. A stronger relationship could be developed with classical and post-Keynesian economics, that provides the conditions for developing a unified theoretical framework in which to place the economic analysis of social institutions.
Resumo De acordo com a visão tradicional do processo de formação de preços, estes resultam das interações entre oferta e demanda. Um preço de equilíbrio é aquele no qual as quantidades demandadas se igualam às quantidades ofertadas. O sistema de preços fornece um mecanismo por meio do qual mudanças nas condições de oferta e demanda condicionam a eficiência alocativa dos recursos. No entanto, em grande medida, os preços não são determinados no mercado pela oferta e demanda nessa acepção estrita, mas por outros fatores como poder, estruturas de mercado, convenções, regras, rotinas etc. O propósito deste artigo é investigar o papel e a influência de uma variedade de instituições no processo de formação de preços, com particular ênfase nas convenções.
This chapter is concerned with the important question of how and to what extent great economists such as J.M. Keynes, F. H. Knight, J.R. Hicks, P. A. Samuelson, Y. Takata, and M. Morishima have been intermingled with each other. Our discussion focuses on the two key concepts in the labor market—involuntary unemployment and “involuntary employment.” On the one hand, there are so many persons in the street who are willing to work at the existing wages but cannot find jobs because of a shortage of the effective demand as a whole. This is clearly the issue of involuntary unemployment, which has been energetically tackled by J. M. Keynes and his followers since the 1930s. On the other hand, since the 1990s, there also have emerged so many people who must work unwillingly for their survivals at the minimal level of wages. This is a new issue of “involuntary employment” or “non-regular workers,” which has recently been investigated by Nobuaki Takahashi, a rising Japanese economist. Although the Takahashi approach is an attractive one, it nevertheless seems to remain at the embryo stage, thus requiring further developments in many ways. The second Keynes would urgently be needed.
Purpose. The aim of the paper is analysing the current Italian active labour market policies system, both on the side of the governance model, and of that of the strategies and interventions promoted in order to sustain transitions in the labour market. Design/ methodology/ approach. The paper presents a theoretical analysis of the juridical and institutional framework of active labour market policies in the light of the transitional labour market theory. Findings. The recent Italian labour market reforms, by focusing (partially and late) on the paradigm of flexicurity, seem to neglect central questions. If one should appreciate the attempt to reform and rationalize the employment services network and to create a foundation for the development of active labour market policies, the concrete institutional solutions arranged are to be questioned. Research limitations/implications. The paper presents some theoretical considerations in order to suggest new research paths. Research findings show the need for empirical studies focused on analysing models and systems already established in different territories, resulting from a combination of factors like: institutional traditions; the legislative framework; decentralised collective bargaining, agreements, covenants, pacts and informal networks for the matching between labour and demand supply in specific sectors or contexts. Originality/ value. The paper tries to shed light on dimensions which have been neglected till now, both on the side of the role and participation of different stakeholders, and on that of the measures and interventions to be prioritised in order to meet the new great transformation of work on-going. Paper type. Issue paper. © 2018 E-Journal of International and Comparative Labour Studies.All right reserved.
This chapter seeks to look at the underlying framework of the New Consensus models, providing a Post-Keynesian critique. In the light of this critique, the model is reformulated, with its basic structure intact, but with alternative post-Keynesian specifications of the Phillips curve being considered. It is shown that such modifications, either allow a long run trade-off between the rate of inflation and the level of output, the rate of capacity utilization and, therefore, unemployment, or, in our preferred specification, changes in output and capacity have no implications for inflation over a large range of capacity utilization.
Based on the observation of economic reality, this book provides for the foundations of a new structure of national payment systems. Specifically, to this end, a rigorous accounting for money transactions, savings, and invested profit is suggested, with a major aim to settle sustainable lending levels. Profit lies at the heart of economic activities. Indeed, companies, from small to large, seek net gains to remunerate shareholders and to increase their assets. Yet, economists are far from sharing a common theory of profit. Using mathematical tools and a discursive approach, this book contributes to the debates in such regard, in the attempt to provide new answers to old economic issues. What is macroeconomic profit? Is there any relationship between wages, lending, and profit? This book is an accesible resource for economists and financial experts as well as global economics students, researchers, academics and historians alike. It will challenge policy-makers and professionals and lead them on a thought-provoking journey through the realm of macroeconomics.
Often, resource and development economists do not explicitly analyze institutions, with their energies devoted to using econometrics and microeconomic models, even though they may think that institutions are important. They can use three strategies to further institutional analysis in resource and development econometrics: (1) recognizing institutional variables, (2) using multilevel thinking and estimation, and (3) drawing causal graphs. I illustrate each strategy with examples from three past studies, by others and myself: (a) biomass extraction from Ranthambore National Park, (b) air pollution in Goa, and (c) carbon and forest livelihoods across countries.
This volume looks at how accumulation in postcolonial capitalism blurs the boundaries of space, institutions, forms, financial regimes, labour processes, and economic segments on one hand, and creates zones and corridors on the other. It draws our attention to the peculiar but structurally necessary coexistence of both primitive and virtual modes of accumulation in the postcolony. From these two major inquiries it develops a new understanding of postcolonial capitalism. The case studies from India and Sri Lanka discuss the production of urban spaces of capital extraction, institutionalization of postcolonial finance capital, gendering of work forms, establishment of new forms of labour, formation of and changes in caste and racial identities and networks, and securitization—and thereby confirm that no study of contemporary capitalism is complete without thoroughly addressing the postcolonial condition.
By challenging the established dualities between citizenship-based civil society and welfare-based political society, exploring critically the question of colonial and postcolonial difference, and foregrounding the material processes of accumulation against the culturalism of postcolonial studies, this volume redefines postcolonial studies in South Asia and beyond. It is invaluable reading for students and scholars of South Asian studies, sociology, cultural and critical anthropology, critical and praxis studies, and political science.
In this chapter I attempt to show how money—capital—and its transporter—the market—have strayed into social environments in which they are not well suited, with the result that they create considerable havoc both for the economy and for the social environments in which they lodge. Money in this way adulterates social organizations by perverting the grounds of cooperative social life. By infusing organizations with competitive struggle, finance markets undermine the conditions for making social contracts. The underlying premise is not that people are corrupt and greedy, although this may be a consequence of these unprecedentedly novel arrangements. A more certain consequence has been prevailing social unease about jobs and earnings, insurance and savings, and the stability of work organizations.
The concepts of employment and unemployment are most easily defined for a developed capitalist economy that has a market for wage labour. Employment is defined as working for at least one hour a week for some payment, either for a wage or for profit, or commission, or without pay in a family business. However, this definition usually excludes people (mainly women) who provide unpaid household services. Unemployment is defined in terms of not being employed while being available and looking for work. In less developed countries, where wage labour is not a predominant form of employment, the concept of unemployment becomes ‘fuzzy’: the line between employment in the informal sector (selling cigarettes on the street corners) and unemployment is not clearly defined (Turnham 1993). In most economies people may not ‘look for work’ when there are no obvious vacancies available and drop out of the labour force (i.e. the participation rate varies). Since the concept of unemployment may not be well defined labour economists sometimes use the concept of employment-population ratios (or the not-employed to population ratio).
The field of labor economics is involved with the study of the labor market, including the determinants of employment, unemployment, and wages. The labor market developed as societies moved from feudal to capitalist processes. The development of capitalism in turn led to powerful capitalist owners and an industrial workforce that was concentrated in factories. Conditions of work became, by present Western standards, dirty, demanding, and dangerous. As a result, workers organized unions and began to demand better pay and working conditions, and they set up political organizations like the Labour Party in the United Kingdom. Over the years, organized labor managed to achieve many of their goals, as legislation was introduced in many countries to provide minimum wages, poverty relief, unemployment benefits, and pensions, and to ensure safe working conditions.
An unorthodox inquiry into quality in recent U.S. presidencies, in business leadership, in management education, in Adam Smith's ethics, and Pythagorean mathematics
This theoretical chapter begins with a short review of the existing literature in economics and sociology on how societies cope with demographic change. Then demographic means of coping with demographic problems are discussed in terms of family policy and migration. As most effects of demographic change cannot be countered by demographic coping—at least in the short term—a systematic theory of non-demographic coping with demographic change is developed. This theory focuses (a) on the process of problem framing, (b) the development of coping strategies, (c) the institutionalisation of adaptability and (d) mentalities as the longue durée of coping. The general concept is specified by an analysis of labour market flexibility and the division of labour in public sectors that have been confronted with demographic change. We theorise on the basis of a realistic model of problems, which are constituted by a discrepancy in the resources available to a social unit and the aspirations it develops. A second element, coping attempts, is characteristic of coping strategies that follow a similar but not completely congruent logic: The coping strategy of expansion tries to regain resources by shifting the focus to new areas of activity either by following a plan or by improvising collectively. The coping strategy of reduction seeks to readapt aspirations either by reducing activities or by switching identity, which can be carried out by cultivating diversity. The coping strategy of reorganisation either replaces people or changes structures. The coping strategy of threat rigidity is characterised by non-reaction.
The institutional wage-setting mechanism is aimed at establishing minimum contractual wages but firms can then add supplementary wage premia according to specific circumstances. This paper focuses on whether firms, in addition to the minimum wage, reward distinctive competencies, and if so, which competencies. To answer this question, we first distinguish between skills and competencies, and then separate competencies into the threshold level and the distinctive level. Second, we decompose competencies into two cluster groups, respectively soft and technical competencies, and then classify the latter into two domains relating to digital and non-digital technical competencies. The digital domain consists of two components, namely, technologies based on rules and algorithm execution, and technologies for pattern recognition and complex communication. Drawing on over 3600 interviews with a stratified sample of Italian employees and controlling for a wide array of covariates, we estimate a five simultaneous equation system via 3SLS in conjunction with the bootstrap method. The results show that a positive relationship between wage premia and distinctive competencies emerges only in 3 out of the 4 competency components, precisely, soft competencies, non-digital technical competencies and the digital technologies component for pattern recognition and complex communication.
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