Download ppt - Labour Market Flexibility and Sectoral Productivity: A Comparative Study John Grahl London Metropolitan University [email protected] Labour Market

Labour Market Flexibility and

Sectoral Productivity:

A Comparative Study

John GrahlLondon Metropolitan University

[email protected]

Labour Market Flexibility ResearchSeminar, London, 15 December 2004

Labour Market Flexibility Research Seminar, 15 December 2004

Overview of presentation

• Introduction• Data Sets• Regression results• Interpreting the Results• Other considerations• Conclusion


Introduction:

• Big sectoral differences in employment forms

• - which may differ across countries• Do these sectoral differences impact on

sectoral performance?• Are such impacts similar across countries?


Productivity Data

British Underperformers:Textiles

Wood products

Activities auxiliary to financial intermediation

Furniture and miscellaneous manufacturing

Mineral oil refining, coke and nuclear fuel

Financial Intermediation

Research

Printing and publishing

Computer and related activities


Productivity Data

• British High Performers• Inland Transport• Mining• Motor Vehicle Maintenance, Sale and Repair• Leather and Footwear• Other Community and Social Services• Scientific and other instruments• Construction• Electricity, Gas and Water Supply


Employment data: ELFS

• Gender• Age (under 15; 15-24; 25-54; 55-64; 65 or over)• Education (lower secondary; upper secondary; third

level)• Employment Status (employee; family worker; self-

employed)• Employment duration (permanent; temporary;

contract worker)• Working hours (full-time; part-time)


Regressions

Performed by countryTwo outliers: electronic equipment and office equipmentData 1994-2001Dependent variable: sector productivity (level or growth)Independent variables:•Employment variables•Year dummies•Control: labour-shedding


Results

• Employment variables have little explanatory power

• But mostly significant• Male gender, Prime age, Educational

status positively associated with productivity

• Self-employment, part-time work, temporary work negatively associated with productivity


Results: exceptions

•Temporary work and productivity level (France)•Part-time work and productivity growth (Sweden, excluding outliers)•Temporary work and productivity growth (Sweden, excluding outliers)•Self-employment and productivity growth (Britain, excluding outliers)


Other Exceptions

• Gender effects different in Sweden from those in the other three countries

• Anomalous results for education in Britain

• Absence of usual strong “prime-age” effect in Germany.


Interpretation• Direct effects: often implausible (except

perhaps educational status?)• Reverse causation – for example,

gender?• Various types of crowding and

segmentation effect?• For the outliers – little concern with

labour productivity because TFP so dependent on technology


Interpretation: Limitations

• No economy-wide effects• 1994-2001• Workers not sectors• No productivity model


Other Considerations 1

• Germany: build a high-employment

low productivity service sector – concern is total wage costs, not productivity

• France: concern is that Aubry law has gone too far

• Sweden: concern over employment has led to deregulation of temporary contracts


Other Considerations 2

• British concern with labour productivity may be abating

• Is this result of supply or demand factors?

• Self-employment positively associated with productivity growth in Britain

• Positive privatisation effects – inland transport, utilities?

Source: ######


Concluding remarks

• Generally negative results for “flexible” forms of employment

• Not necessarily to be seen as impact of employment form on productivity – could be segmentation/crowding processes

• But likely to call these forms into question.