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.