04 September 2012

US health care - can it get any worse?

The US health care system ranks worst on all possible dimensions...
Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally, 2010 Update June 23, 2010
Authors: Karen Davis, Ph.D., Cathy Schoen, M.S., and Kristof Stremikis, M.P.P.
Access here

06 August 2012

Akerlof's lemons were rejected 3 times...before getting the Nobel

Akerlof's article excerpt:
"By June of 1967 the paper was ready and I sent it to The American Economic Review for publication. I was spending the academic year 1967-68 in India. Fairly shortly into my stay there, I received my first rejection letter from The American Economic Review. The editor explained that the Review did not publish papers on subjects of such triviality. In a case, perhaps, of life reproducing art, no referee reports were included.

Michael Farrell, an editor of The Review of Economic Studies, had visited Berkeley in 1966-67, and had urged me to submit "Lemons" to The Review, but he had also been quite explicit in giving no guarantees. I submitted "Lemons" there, which was again rejected on the grounds that the The Review did not publish papers on topics of such triviality.

The next rejection was more interesting. I sent "Lemons" to the Journal of Political Economy, which sent me two referee reports, carefully argued as to why I was incorrect. After all, eggs of different grades were sorted and sold (I do not believe that this is just my memory confusing it with my original perception of the egg-grader model), as were other agricultural commodities. If this paper was correct, then no goods could be traded (an exaggeration of the claims of the paper). Besides — and this was the killer — if this paper was correct, economics would be different.

I may have despaired, but I did not give up. I sent the paper off to the Quarterly Journal of Economics, where it was accepted."

04 August 2012

Privatisation, Partisanship and the IMF

Pressures to Privatize? The IMF, Globalization, and Partisanship in Latin America 
By David Doyle, Political Research Quaterly

Despite pervasive downward pressure on government policy from exogenous forces, the author argues that partisanship still exerts an effect on privatization in Latin America. When a country is indebted to the International Monetary Fund (IMF), and a government of the right is in power, scholars can expect increased levels of privatization. However, when a country is indebted to the IMF and a government of the left is in power, electoral incentives will prompt these governments to ignore IMF pressure and reduce levels of privatization. The author tests this argument on a data set of eighteen Latin American countries, between the years 1984 and 1998.

Labour market policy reaction to the crisis in Europe and the US

Southern European countries that are currently facing particularly acute labour market issues have done little in terms of additional training. Italy and Spain have seen the most important increases in spending on unemployment benefits. Only Greece has stepped up spending on employment and start up incentives.

Liberal Market Economies have raised spending on unemployment benefits (particularly strongly for Ireland) but only Ireland has slightly enhanced training. It's also striking to note the reduction in US spending on unemployment benefits between 2009 and 2010.

03 August 2012

New Politics&Society issue

Check out the following two articles
Cooperation in Unlikely Settings: The Rise of Cooperative Labor Relations Among Leading South Korean Firms
Tat Yan Kong
Politics & Society 2012;40 425-452
New Roles for the Trade Unions: Five Lines of Action for Carving Out a New Governance Regime
Peer Hull Kristensen and Robson Sø Rocha
Politics & Society 2012;40 453-479

02 August 2012

Reactions to the economic crisis

New paper by Jonas Pontusson and Damian Raess: "How (and Why) Is This Time Different? The Politics of Economic Crisis in Western Europe and the United States"

This article compares government responses to the Great Recession of 2008–2009 with government responses to recessions and other economic challenges in the period 1974–1982. We focus on five countries: France, Germany, Sweden, the United Kingdom, and the United States. Across these countries, we observe two broad shifts in crisis responses. First, governments have in the recent period eschewed heterodox crisis policies and relied more exclusively on fiscal stimulus. Second, tax cuts have become a more important component of fiscal stimulus while spending cuts have featured more prominently in governments' efforts to consolidate their fiscal position. We argue that crisis responses reflect the interests and power of domestic actors as well as external constraints and the nature of the economic problems at hand.

17 July 2012

New article on "Associational Networks and Welfare States in Argentina, Brazil, South Korea, and Taiwan"

Cheol-Sung Lee (2012)


This article investigates the structures of civic networks and their roles in steering the political choices of party and union elites regarding the retrenchment or expansion of welfare states in four recently democratized developing countries. Utilizing coaffiliation networks built upon two waves of World Values Surveys and evidence from comparative case studies for Argentina, Brazil, South Korea, and Taiwan, the study develops two explanatory factors that account for variations in welfare politics: cohesiveness and embeddedness. In Argentina and, to a lesser degree, in Taiwan, party and union leaders’ cohesive relationships, being disarticulated from the informal civic sphere, allowed them to conduct elite-driven social policy reforms from above, by launching radical neoliberal reforms (Argentina) or by developing a generous transfer-centered welfare state (Taiwan). In Brazil and South Korea, however, party and union leaders’ durable solidarity embedded in wider civic communities enabled them to resist the retrenchment of welfare states (Brazil) or implement universal social policies (South Korea) based on bottom-up mobilization of welfare demands. This article demonstrates that elites in the formal sector make markedly different political choices when confronting economic crisis and democratic competition depending upon their organizational connections in formal and informal civic networks.

British legislative process

15 June 2012

Adam Smith on employers' bargaining power

"We rarely hear, it has been said, of the combination of masters; though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject" (Smith in the wealth of nations, p 84, quoted in Manning (2003) Monopsony in Motion: Imperfect competition in Labor Markets, page 14; footnote 9)

08 June 2012

Bernanke on Economic Outlook and Policy

Chairman Casey, Vice Chairman Brady, and other members of the Committee, I appreciate this opportunity to discuss the economic outlook and economic policy.
Economic growth has continued at a moderate rate so far this year. Real gross domestic product (GDP) rose at an annual rate of about 2 percent in the first quarter after increasing at a 3 percent pace in the fourth quarter of 2011. Growth last quarter was supported by further gains in private domestic demand, which more than offset a drag from a decline in government spending. 
Read more

07 June 2012

Upcoming Summer conferences

SASE 24th Annual Conference - Global Shifts: Implications for Business, Government and Labour. June 28-30, 2012 - Massachusetts Institute of Technology, Cambridge. Program available

ILERA 16th World Congress - Beyond Borders: Governance in a Global Economy. Philadelphia, Pennsylvania, USA in 2012. Draft papers

10th Annual ESPAnet conference .September 6-8 2012, School of Social and Political Science, University of Edinburgh, Scotland. List of streams

European Trade Union proposal

02 June 2012

Neil Fligstein on Economic Sociology

The author of The Architecture of Markets says it’s important to understand social aspects of economic behaviour, particularly when times of crisis reveal shortcomings of traditional economic theory. Interview here.

01 June 2012

EU in crisis? Popular perceptions of the EU project in different Member States

A new study by the Pew Research Centre presents the results of a survey on attitudes towards the EU in different member states. While Germany remains most favourable to the EU project, this is also the case in Spain and Portugal whereas Britain, Greece and the Czech Republic have a less positive view. The ECB gets much less favourable ratings, with more than 50% being favourable only in Poland, with the most negative perceptions in Britain, Spain and Greece. Only the Germans see EU integration as conducive to economic growth. 

Two slightly surprising findings. First, Spain also (46%) retains a positive view of the effect of EU integration on the economy. Second, Greece has the highest share of the population seeing the Euro... as a good thing! This result is likely to have implications for the likelyhood of anti-Euro parties to win a majority in the next Greek legislative elections...

27 May 2012

How to Study Contemporary Capitalism?

Wolfgang Streeck (2012).


The paper argues that contemporary capitalism must be studied as a society rather than an economy, and contemporary society as capitalist society. Capitalism is defined as a specific institutionalization of economic action in the form of a specifically dynamic system of social action, with a tendency to expand into, impose itself on and consume its non-economic and non-capitalist social and institutional context, unless contained by political resistance and regulation. The paper illustrates its perspective by four brief sketches, depicting contemporary capitalism as a historically dynamic social order, a culture, a polity, and a way of life. All four examples, it is claimed, demonstrate the superiority of a longitudinal-historical approach over static cross-sectional comparisons, and of focusing on the commonalities of national versions of capitalisms rather than their “varieties”

European Journal of Sociology, Volume 53, Issue 01, April 2012 pp 1-28

09 May 2012

Flexwork newsletter - May

1. The labour markets in Finland, Germany, Latvia, Norway, and Sweden 2006-2010. Developments and challenges for the future.. (S. Klinger, E. Spitznagel, J. Alatalo, K. Berglind, H. Gustavsson, H. Kure, I. Nio, J. Salmins, V. Skuja, J. Sorbo).
Via the International Labour Market Forecasting Network, forecasters of the public employment services or comparable… read more.

2. Research Report on Non-Regular Employment: Focusing on Trends, Equal Treatment, and the Transition to Regular Employment. (Y. Asao, K. Takahashi, H. Maeura & S. Lee).
This summary is a compilation of the results of “Integrated Surveys and Research on Trends among Non-Regular… read more.

3. Berufliche Statusmobilität von Arbeitslosen nach beruflicher Weiterbildung. Ein empirischer Beitrag zur Evaluation der Förderung beruflicher Weiterbildung. (A. Deeke & M. Baas).
Für die mikroanalytische Evaluation der Förderung der beruflichen Weiterbildung (FbW) von Arbeitslosen wird… read more.

4. A Very Uneven Road: US Labor Markets in the Past 30 Years. (H. J. Holzer, M. Hlavac).
We will use data from the Current Population Surveys for over 30 years to answer these questions. The analysis will proceed… read more.

5. Resilience, Equity, and Opportunity. The World Bank’s Social Protection and Labor Strategy 2012-2022. (World Bank).
Risk and the quest for opportunity feature heavily in economic life in the 21st century. Sustained growth in many… read more.

6. Private and Public Provision of Counseling to Job-Seekers: Evidence from a Large Controlled Experiment. (L. Behaghel, B. Crépon & M. Gurgand).
Contracting out public services to private firms has ambiguous effects when quality is imperfectly observable. Using a… read more.

7. The impact of Greek labour market regulation on temporary and family employment: evidence from a new survey. (Anagnostopoulos, A. & Stanley Siebert, W.).
This paper uses an original dataset for 206 workplaces in Thessaly (Greece), to study consequences of Greece’s employment… read more.

03 May 2012

Education reduces gender inequality through its employment effect

Women’s employment, education,and the gender gap in 17 countries 

"Data from the Luxembourg Income Study show that, among married or cohabiting mothers, better educated women are more likely to be employed; gender inequality in annual earnings is thus less extreme among the well educated than among those with less education, driven largely by educated women’s higher employment" (Monthly Labor Review, April 2012, Vol. 135, Number )

02 May 2012

The Euro area now and forecasts

Subject Descriptor Units 2010 2011 2012 2013 2017
GDP, constant prices Percent change 1.868 1.441 -0.317 0.895 1.666
GDP, current prices U.S. dollars, Billions 12,155.54 13,115.13 12,586.08 12,889.21 14,358.38
GDP, deflator Index, 2000=100 120.427 122.15 124.396 126.188 134.484
Output gap Percent of potential GDP -2.361 -1.447 -2.324 -2.206 -0.262
GDP based on purchasing-power-parity (PPP) valuation of country GDP Current international dollar, Billions 10,845.70 11,236.78 11,344.64 11,619.09 13,215.41
GDP based on purchasing-power-parity (PPP) per capita GDP Current international dollarm units 32,726.92 33,785.97 34,022.67 34,765.87 39,196.87
GDP based on purchasing-power-parity (PPP) share of world total Percent 14.538 14.242 13.727 13.317 11.896
Investment Percent of GDP 19.33 19.641 19.532 19.476 19.924
Gross national savings Percent of GDP 19.803 20.017 20.303 20.462 21.05
Inflation, average consumer prices Percent change 1.624 2.718 2.019 1.648 1.806
Three-month London interbank offered rate (LIBOR) Percent 0.811 1.391 0.764 0.795 n/a
Volume of imports of goods and services Percent change 9.309 3.789 -0.478 2.189 4.283
Volume of imports of goods Percent change 10.901 4.783 -0.847 2.181 4.231
Volume of exports of goods and services Percent change 11.101 6.295 1.382 3.191 4.434
Volume of exports of goods Percent change 12.733 6.945 1.139 3.107 4.392
Terms of trade of goods and services Percent change -2.107 -2.509 -1.259 -0.106 -0.128
Terms of trade of goods Percent change -2.264 -2.476 -0.559 -0.11 -0.175
Unemployment rate Percent of total labor force 10.117 10.133 10.87 10.819 9.048
Employment Index, 2000=100 106.54 106.583 105.701 105.933 n/a
General government revenue Percent of GDP 44.693 45.233 45.869 45.965 45.934
General government total expenditure Percent of GDP 50.943 49.378 49.103 48.657 47.052
General government net lending/borrowing Percent of GDP -6.25 -4.146 -3.234 -2.692 -1.119
General government net debt Percent of GDP 65.794 68.385 70.297 71.47 69.514
General government gross debt Percent of GDP 85.657 88.101 89.964 90.992 86.891
Current account balance Percent of GDP 0.308 0.312 0.745 0.969 1.117
Imports of goods and services U.S. dollars, Billions -4,769.19 -5,526.37 -5,307.52 -5,447.27 -6,414.46
Exports of goods and services U.S. dollars, Billions 4,942.11 5,717.04 5,560.16 5,754.75 6,801.95

International Monetary Fund, World Economic Outlook Database, April 2012

24 April 2012

The crisis and national labour law reforms

Check this really interesting ETUI working paper on national labour market reforms in the context of the crisis by Clauwaert and Schömann.This shows that there have been significant reforms to industrial relations and bargaining system, individual and collective dismissal rules, as well as changes to rules on atypical contracts...

Flex Work Research Centre - New publications April

Please find below the latest reports that have been posted on the Flex Work Research website: www.flexworkresearch.org:

Part-time unemployment and optimal employment insurance. (S. Ek & B. Holmlund).
A significant fraction of the labor force consists of employed workers who are part-time unemployed (underemployed) in the… read more.

23 April 2012

The growing geographical divide in the French electorate

The strikingly good score of the extreme right candidate Le Pen and the comparatively disappointing score of the Front de Gauche headed by Melanchon hides some important geographical features of the French vote.

Using the Le Monde online tool, one can identifies places where candidates received more than a certain threshold of the vote. This reveals that Le Pen performed particularly well in the North East while Melanchon's stronghold seem to be in the South of France. Interestingly, Le Pen also did well in the South East (Diagram 1).

This North East - South West divide is also apparent for the candidates of mainstream right and left wing parties, with Hollande doing well in the South west and Sarkozy in the North East (Diagram 2).

Diagram 1: Le Pen with more than 31.4% (left diagram) and Melanchon with more than 22.9% (right diagram)

Diagram 2: Sarkozy with more than 41.9% of the votes (left diagram) and Hollande with more than 39.9% (right diagram

Endorsing "a modest proposal for ringfencing Europe"

Check out Varoufakis modest proposal for solving the crisis:
1) Debt conversion program undertaken - and initially funded - by the ECB;
2) Investment and Internal Imbalances Amelioration Program European Investment Bank (EIB), the European Investment Fund (EIF) and the ECB;
3) Single banking area with a single authority that supervises directly and recapitalises the area’s bank.

Varying Fates of Legacy Unions in New Democracies

New paper on unions in new democracies by Caraway in World politics.

Legacy unions—formerly state-backed unions that survived democratic transitions—are one of the most persistent legacies of authoritarian rule. While usually successful in maintaining their preeminent position, legacy unions have in some cases been overtaken by competing unions. Deploying a set of paired comparisons of legacy unions that entered the transition with similar legacies but experienced different fates—Indonesia with South Korea and Poland with Russia—this article examines why some legacy unions continued to dominate (Indonesia and Russia) and others did not (South Korea and Poland). The author identifies four pathways of change: endurance (Indonesia), attrition (South Korea), hegemony (Russia), and rupture (Poland). Several features of the transition context propelled legacy unions down distinct pathways of change—the widespread mobilization of workers outside of state-sponsored unions early in the transition, partisan links, and the structure of union competition.

16 April 2012


This is a gloomy start of the week for the Eurozone, with spreads rising again in the usual suspects (Spain, 4.412, and Italy, 3.997) and not so usual suspect such as France (1.334). International investors are turning away from the Euro bond market, Euro is now at 1.302 dollars, and Asian stocks falling as a result of worries over the Eurozone... 

The adverse developments in the Eurozone are not the results of insufficient fiscal austerity but rather of too much austerity. As should by now be clear, and as Krugman notes in his Insane in Spain post, the crisis in Spain is not one of fiscal irresponsibility, but is better understood as resulting from a housing bubble

11 April 2012

World ranking in Unemployment Benefit replacement rates

In times of crisis, the ability of workers who lose their jobs to retain their purchasing power has important social and economic implications. A high replacement rate (ratio of unemployment benefits a worker receives relative to the worker’s last gross earning) ensures that the negative effects of rising unemployment on aggregate demand are mitigated. It also prevents workers from falling into poverty when they lose their jobs.

The table below shows the gross replacement rate in the first year of unemployment for as many countries as is available. The data is taken from a recent IMF working paper (see end of post for full reference). I have ranked countries from highest to lowest (restricting the sample to those countries which replacement rate is superior to 0). 

10 April 2012

Rising in inequality across the OECD

Unions and democracy

Recent paper by Patrick Flavin and Benjamin Radcliff shows that (1) union members are more likely to vote than non-members and (2) people are more likely to vote in high union density countries...

Despite a large literature on voter turnout around the world, our understanding of the role of labor union membership remains muddled. In this paper, we examine the relationship between union membership and voting. Using individual level International Social Science Program (ISSP) data from thirty-two countries, we find that union members are more likely to vote and that the substantive effect rivals that of other common predictors of voting. This relationship is also largely invariant across an array of demographic factors, indicating that unions tend to be “equal opportunity mobilizers.” We also find that unions have “spillover” effects: controlling for a variety of other factors, even non-union members are more likely to turn out to vote in countries with higher union densities. In sum, we find that labor unions have a consistent political influence across a wide set of countries.

08 February 2012


Fiscal Policy: What does ‘Keynesian’ mean? (Jonathan Portes at the Social Europe Journal): On why the politicisation of the term hinders our ability to address the crisis.

EU responses to the crisis: From inadequate explanations to inefficient policy solutions?

The debt crisis saga continues, further demonstrating the inability of the European Union and its leaders to come to grip with solutions that could put an end to the devastating consequences it is having on the European Economy and by implication on workers’ welfare. In the second quarter of 2011, overall unemployment stood at 10.3% for the Eurozone while it reached a staggering 21.7% for 15-24 years old [1]. This country average hides important cross national disparities with Greece’s overall unemployment rate being at 18.8%, Ireland 14.6%, Portugal 12.8% and Spain 22.5% in September 2011 [2].

05 February 2012

Do we need the manufacturing sector?

Christina Romer argues that we don't. This is because the three arguments in favour of manufacturing - market failures, the need for jobs and more income distribution - may not be supported by the evidence, at least as far as the US is concerned.

03 January 2012

Support the Basic Income Earth Network

"About Basic Income

A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement. It is a form of minimum income guarantee that differs from those that now exist in various European countries in three important ways:

it is being paid to individuals rather than households;
it is paid irrespective of any income from other sources;
it is paid without requiring the performance of any work or the willingness to accept a job if offered.

Liberty and equality, efficiency and community, common ownership of the Earth and equal sharing in the benefits of technical progress, the flexibility of the labour market and the dignity of the poor, the fight against inhumane working conditions, against the desertification of the countryside and against interregional inequalities, the viability of cooperatives and the promotion of adult education, autonomy from bosses, husbands and bureaucrats, have all been invoked in its favour.

But it is the inability to tackle unemployment with conventional means that has led in the last decade or so to the idea being taken seriously throughout Europe by a growing number of scholars and organizations. Social policy and economic policy can no longer be conceived separately, and basic income is increasingly viewed as the only viable way of reconciling two of their respective central objectives: poverty relief and full employment.

There is a wide variety of proposals around. They differ according to the amounts involved, the source of funding, the nature and size of the reductions in other transfers, and along many other dimensions. As far as short-term proposals are concerned, however, the current discussion is focusing increasingly on so-called partial basic income schemes which would not be full substitutes for present guaranteed income schemes but would provide a low - and slowly increasing - basis to which other incomes, including the remaining social security benefits and means-tested guaranteed income supplements, could be added.

Many prominent European social scientists have now come out in favour of basic income - among them two Nobel laureates in economics. In a few countries some major politicians, including from parties in government, are also beginning to stick their necks out in support of it. At the same time, the relevant literature - on the economic, ethical, political and legal aspects - is gradually expanding and those promoting the idea, or just interested in it, in various European countries and across the world have started organizing into an active network"