IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/853.html
   My bibliography  Save this paper

Labour Market Dualism and the Heterogeneous Wage Gap for Temporary Employment. A Multilevel Study across 30 Countries

Author

Listed:
  • Sophia Fauser
  • Michael Gebel

Abstract

This study investigates the hourly wage gap between 25-55 year old temporary and permanent employees across 30 countries worldwide based on Luxembourg Income Study data from 2000–2019 supplemented by other survey data. Two-stage multilevel regressions reveal wage disadvantages for temporary workers, particularly for prime-age workers and those working in medium/high-level occupations. There is no evidence that a stronger institutional dualization in terms of stronger employment protection for permanent contracts increases the wage gap. Instead partial deregulation matters: In countries where permanent workers are strongly protected the wage gap is larger if the use of temporary contracts is deregulated. Moreover, results suggest that the larger the size of the temporary employment segment the larger the wage gap. Thus, our findings indicate that stronger institutional and structural labour market dualism amplify labour market inequality in terms of wage gaps between temporary and permanent workers.

Suggested Citation

  • Sophia Fauser & Michael Gebel, 2023. "Labour Market Dualism and the Heterogeneous Wage Gap for Temporary Employment. A Multilevel Study across 30 Countries," LIS Working papers 853, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:853
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/853.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michal Pilc, 2015. "What Determines The Reforms Of Employment Protection Legislation? A Global Perspective," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 10(4), pages 111-129, December.
    2. Lewis, Jeffrey B. & Linzer, Drew A., 2005. "Estimating Regression Models in Which the Dependent Variable Is Based on Estimates," Political Analysis, Cambridge University Press, vol. 13(4), pages 345-364.
    3. Potrafke, Niklas, 2013. "Globalization and labor market institutions: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 829-842.
    4. Assar Lindbeck & Dennis J. Snower, 1989. "The Insider-Outsider Theory of Employment and Unemployment," MIT Press Books, The MIT Press, edition 1, volume 1, number 026262074x, April.
    5. Keele, Luke & Stevenson, Randolph T. & Elwert, Felix, 2020. "The causal interpretation of estimated associations in regression models," Political Science Research and Methods, Cambridge University Press, vol. 8(1), pages 1-13, January.
    6. Brady, David & Bostic, Amie, 2015. "Paradoxes of Social Policy: Welfare Transfers, Relative Poverty, and Redistribution Preferences," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 80(2), pages 268-298.
    7. Lawrence M. Kahn, 2016. "The Structure of the Permanent Job Wage Premium: Evidence from Europe," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(1), pages 149-178, January.
    8. Simms, Melanie & Eversberg, Dennis & Dupuy, Camille & Hipp, Lena, 2018. "Organizing Young Workers Under Precarious Conditions: What Hinders or Facilitates Union Success," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 45(4), pages 420-450.
    9. Busemeyer, Marius & Kemmerling, Achim, 2020. "Dualization, stratification, liberalization, or what? An attempt to clarify the conceptual underpinnings of the dualization debate," Political Science Research and Methods, Cambridge University Press, vol. 8(2), pages 375-379, April.
    10. Klarita Gërxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, September.
    11. Paolo Barbieri & Giorgio Cutuli, 2018. "Dual Labour Market Intermediaries in Italy: How to Lay off “Lemons”—Thereby Creating a Problem of Adverse Selection," De Economist, Springer, vol. 166(4), pages 477-502, December.
    12. Rueda, David, 2005. "Insider–Outsider Politics in Industrialized Democracies: The Challenge to Social Democratic Parties," American Political Science Review, Cambridge University Press, vol. 99(1), pages 61-74, February.
    13. Franzese, Robert J., 2005. "Empirical Strategies for Various Manifestations of Multilevel Data," Political Analysis, Cambridge University Press, vol. 13(4), pages 430-446.
    14. Schwander, Hanna, 2020. "Labor market insecurity among the middle class: a cross-pressured group," Political Science Research and Methods, Cambridge University Press, vol. 8(2), pages 369-374, April.
    15. Guell, Maia, 2000. "Fixed-term contracts and unemployment: an efficiency wage analysis," LSE Research Online Documents on Economics 20181, London School of Economics and Political Science, LSE Library.
    16. Axel Dreher & Noel Gaston, 2008. "Has Globalization Increased Inequality?," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 516-536, August.
    17. Maarten L. Buis, 2012. "Stata tip 106: With or without reference," Stata Journal, StataCorp LP, vol. 12(1), pages 162-164, March.
    18. Heisig, Jan Paul & Schaeffer, Merlin & Giesecke, Johannes, 2017. "The Costs of Simplicity: Why Multilevel Models May Benefit from Accounting for Cross-Cluster Differences in the Effects of Controls," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 82(4), pages 796-827.
    19. José M Arranz & Enrique Fernández-Macías & Carlos García-Serrano, 2021. "Wage differentials and segmentation: The impact of institutions and changing economic conditions," European Journal of Industrial Relations, , vol. 27(2), pages 203-227, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Giorgio Cutuli & Alessio Tomelleri, 2023. "Returns to digital skills use, temporary employment, and trade unions in European labour markets," European Journal of Industrial Relations, , vol. 29(4), pages 393-413, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lehner, Lukas & Ramskogler, Paul & Riedl, Aleksandra, 2022. "Begging thy coworker – Labor market dualization and the slow-down of wage growth in Europe," INET Oxford Working Papers 2022-04, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    2. Aziz N. Berdiev & Brandon Gomes & James W. Saunoris, 2023. "Revisiting the nexus between globalisation and the shadow economy: Untying the influences of de jure versus de facto globalisation," The World Economy, Wiley Blackwell, vol. 46(1), pages 27-54, January.
    3. Bruno Chiarini & Antonella D'Agostino & Elisabetta Marzano & Andrea Regoli, 2017. "Housing Environmental Risk in Urban Areas: Cross Country Comparison and Policy Implications," CESifo Working Paper Series 6822, CESifo.
    4. Filippa Bono & Maria Francesca Cracolici & Miranda Cuffaro, 2017. "A Hierarchical Model for Analysing Consumption Patterns in Italy Before and During the Great Recession," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(2), pages 421-436, November.
    5. Heisig, Jan Paul & Schaeffer, Merlin, 2020. "The Educational System and the Ethnic Skills Gap among the Working-Age Population: An Analysis of 16 Western Immigration Countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6, pages 1-1.
    6. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," ifo Working Paper Series 181, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Giesecke, Johannes & Groß, Martin & Stuth, Stefan, 2020. "Occupational Closure and Wage Inequality: How Occupational Closure Effects Vary Between Workers [Wie berufliche Schließungseffekte zwischen Arbeitnehmergruppen variieren]," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 72(S1), pages 157-195.
    8. Manuel Dorado-Moreno & Antonio Sianes & César Hervás-Martínez, 2016. "From outside to hyper-globalisation: an Artificial Neural Network ordinal classifier applied to measure the extent of globalisation," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 549-576, March.
    9. Giray Gozgor & Priya Ranjan, 2017. "Globalisation, inequality and redistribution: Theory and evidence," The World Economy, Wiley Blackwell, vol. 40(12), pages 2704-2751, December.
    10. Björn Kauder & Niklas Potrafke, 2015. "Globalization and social justice in OECD countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 353-376, May.
    11. Janna Besamusca, 2020. "The short or long end of the stick? Mothers’ social position and self‐employment status from a comparative perspective," Gender, Work and Organization, Wiley Blackwell, vol. 27(6), pages 1285-1307, November.
    12. Heisig, Jan Paul & Gesthuizen, Maurice & Solga, Heike, 2019. "Lack of skills or formal qualifications? New evidence on cross-country differences in the labor market disadvantage of less-educated adults," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 83, pages 1-20.
    13. Ruth Barton & Élodie Béthoux & Camille Dupuy & Anna Ilsøe & Patrice Jalette & Mélanie Laroche & Steen Erik Navrbjerg & Trine Pernille Larsen, 2021. "Understanding the dynamics of inequity in collective bargaining: evidence from Australia, Canada, Denmark and France," Transfer: European Review of Labour and Research, , vol. 27(1), pages 113-128, February.
    14. Navarro, María & D'Agostino, Antonella & Neri, Laura, 2020. "The effect of urbanization on subjective well-being: Explaining cross-regional differences," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    15. Stephanie Meinhard & Niklas Potrafke, 2012. "The Globalization–Welfare State Nexus Reconsidered," Review of International Economics, Wiley Blackwell, vol. 20(2), pages 271-287, May.
    16. Huber, John D. & Stanig, Piero, 2011. "Church-state separation and redistribution," Journal of Public Economics, Elsevier, vol. 95(7), pages 828-836.
    17. Niklas Potrafke, 2019. "The globalisation–welfare state nexus: Evidence from Asia," The World Economy, Wiley Blackwell, vol. 42(3), pages 959-974, March.
    18. Amie Bostic & Allen Hyde, 2023. "Social Spending, Poverty, and Immigration: A Systematic Analysis of Welfare State Effectiveness and Nativity in 24 Upper- and Middle-Income Democracies," LIS Working papers 858, LIS Cross-National Data Center in Luxembourg.
    19. Sonja Scheuring, 2020. "The Effect of Fixed-Term Employment on Well-Being: Disentangling the Micro-Mechanisms and the Moderating Role of Social Cohesion," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 152(1), pages 91-115, November.
    20. Florian Dorn & Christoph Schinke, 2018. "Top income shares in OECD countries: The role of government ideology and globalisation," The World Economy, Wiley Blackwell, vol. 41(9), pages 2491-2527, September.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:853. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.