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The rise (and fall) of labour market programmes: domestic vs. global factors

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  • Noel Gaston
  • Gulasekaran Rajaguru

Abstract

We provide a simple model to illustrate that tax and redistributive considerations as well as increasing globalization may lead workers unexposed to the threat of unemployment to prefer government spending on active labour market programmes to passive spending, e.g., on unemployment benefits. In the empirical work, panel data for OECD countries are used to examine the relationship between active and passive labour market spending and various controls relevant for analysing the political economy of labour market policies. Overall, we find that domestic concerns, such as government indebtedness, are far more important determinants of labour market expenditures than global influences. Copyright 2008 , Oxford University Press.

Suggested Citation

  • Noel Gaston & Gulasekaran Rajaguru, 2008. "The rise (and fall) of labour market programmes: domestic vs. global factors," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 619-648, October.
    • Handle: RePEc:oup:oxecpp:v:60:y:2008:i:4:p:619-648
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    Cited by:

    1. Olaf van Vliet & Ferry Koster, 2011. "Europeanization and the political economy of active labour market policies," European Union Politics, , vol. 12(2), pages 217-239, June.
    2. Potrafke, Niklas, 2013. "Globalization and labor market institutions: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 829-842.
    3. Markus Tepe & Pieter Vanhuysse, 2013. "Parties, Unions, and Activation Strategies: The Context-Dependent Politics of Active Labor Market Policy Spending," Discussion Papers 15, Central European Labour Studies Institute (CELSI).
    4. Noel Gaston, 2008. "Understanding Australian Income Inequality: The Proper Role played by Globalisation, De-unionisation and the Terms of Trade," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(1), pages 49-66.
    5. Jörg Paetzold & Olaf Van Vliet, 2014. "EU Co-Ordination and the Convergence of Domestic Unemployment Protection Schemes," Journal of Common Market Studies, Wiley Blackwell, vol. 52(5), pages 1070-1089, September.
    6. Gaston, Noel & Rajaguru, Gulasekaran, 2013. "International migration and the welfare state revisited," European Journal of Political Economy, Elsevier, vol. 29(C), pages 90-101.
    7. Niklas Potrafke, 2010. "Labor market deregulation and globalization: empirical evidence from OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(3), pages 545-571, September.

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