Poverty and labour market institutions in Europe

Liotti, Giorgio; Canale, Rosaria Rita

doi:10.2298/pan2003277l

Cited by 10 publications

(4 citation statements)

References 23 publications

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“…Also, most studies use cross-sectional data. To the best of my knowledge, the only exceptions are the studies by Brady et al (2013), who analyse state-level changes in in-work poverty in the US, and the study by Liotti and Rita (2020), who provide a macro-level analyses of 15 European countries.…”

Section: Previous Research On Predictors Of In-work Povertymentioning

confidence: 99%

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No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

Brülle

2023

Preprint

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The paper studies effects of social policies on in-work poverty risks, distinguishing between measures that either intervene in labour market processes -- i.e. predistribution policies -- or redistribute incomes towards those with low incomes. I argue that effects of different policies can be expected to vary across household contexts, due to the fact that the link between individual employment outcomes and in-work poverty is moderated by household type. The analyses uses data from EU-SILC and macro-level indicators from various sources to estimate general as well as household-type-specific effects using longitudinal methods. Results emphasize that labour market interventions and redistributive transfers impact in-work poverty risks through different mechanisms and also reveal important differences between specific policies: minimum wages contribute to reducing low-wage risks, whereas effects on in-work poverty are small and mainly restricted to single households where labour market outcomes and household income closely align. In contrast, there is a robust negative effect of strict employment protection legislation across almost all household types on in-work poverty, which is consistent with the positive role this measure plays for supporting higher earnings. With respect to redistributional policies, both unemployment benefits and benefits to low earners reduce poverty due to their contribution to public poverty-reduction. However, whereas unemployment benefits mainly reduce in-work poverty among couple households, benefits to low earners are the most effective measure to contribute to lower poverty risks among employed single parents.

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Section: Previous Research On Predictors Of In-work Povertymentioning

confidence: 99%

“…Furthermore, one cross-national study indicates no signicant eect of EPL (Brady et al 2010). Finally, using longitudinal methods, one study nds that an index of labour market regulation increases in-work poverty, and that this eect is even amplied in times of economic crisis (Liotti and Rita 2020).…”

Section: Previous Research On Predictors Of In-work Povertymentioning

confidence: 99%

No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

Brülle

2023

Preprint

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“…The study by Hasan et al (2006) showed empirically that solid commitment to the rule of law and policies that facilitate the creation of new enterprises (through less restrictive regulations) are more relevant for growth and poverty reduction than the nature of the political system in the country. Liotti and Canale (2020) found robust evidence that labor market regulation, namely greater flexibility, is positively correlated with greater poverty among employed people in 15 European countries over the 2005–2016 period. Vollmer and Ziegler (2009) argued that due to higher redistributive concerns linked to the population's needs, democracies should produce a higher human development level—taken as a measure of poverty—than autocracy.…”

Section: Poverty Social Spending Institutional and Political Environm...mentioning

confidence: 99%

Is social spending pro‐poor in developing countries? The role of governance and political freedom

Mimoun

Raies

2022

Poverty & Public Policy

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This article extends the existing literature on the social spending‐poverty nexus by testing the proposition that the quality of governance and the political freedom status determine social spending effectiveness in developing countries (DCs). Our analysis helps explain the surprising result documented in prior studies, of no clear evidence that higher social spending, especially on education and health, translates to a significant reduction in poverty in DCs. Using unbalanced panel data of a large sample of DCs covering the period 1980–2019, we demonstrated that the impact of public spending on poverty is significantly reduced in countries that have a poor quality of governance and in those with relatively few political freedoms. This result is robust to a change in the poverty indicator and type, and the estimator used in regression models. This finding implies that improving the efficacy of social spending through improving governance and political freedom is as crucial as increasing the scale of this spending in the poverty alleviation strategy of DCs, especially those with limited public resources. Our empirical analysis also revealed other novel results about the socioeconomic factors most likely to explain poverty in DCs.

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“…Following this approach, a rising number of studies conclude that the reforms in the labour market that have tried to make it more flexible have had microeconomic and macroeconomic negative consequences, like a higher labour segmentation, a deterioration in the job quality, unsustainable increase in the household consumption and borrowing, a more inegalitarian personal income distribution, the generation of disincentives to innovation and physical and human capital accumulation, negative impact on productivity growth, higher poverty rates, etc. (Alfred Kleinknecht et al 2013;Jason Heyes and Paul Lewis 2015;Mireia Damiani, Fabrizio Pompei, and Andrea Ricci 2016;Tomás Gutierrez-Barbarrusa 2016;Tridico 2017;Brancaccio, Garbellini, and Giammetti 2018;OECD 2018;Liotti and Rosario Rita Canale 2020).…”

Section: Labour Flexibility and Income Inequalitymentioning

confidence: 99%

Labour market flexibilization and income distribution in Europe

2021

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This paper analyses the role played by the flexibilization of labour markets on functional income distribution. Specifically, we analyse whether employment protection legislation affects the evolution of labour income share, measured by the size of compensation of employees as a percentage of GDP, the sum of wages and salaries as a percentage of GDP and the size of the adjusted wage share, in twenty European economies. Our study?s results show that the evolution of labour income share is explained by the economic growth, the growth of employment and unemployment rates, and the growth of real wages. Regarding the role played by the flexibility of the labour market, and specifically of the employment protection legislation, only employment protection for temporary workers has a significant impact on the evolution of labour shares. Our results show that stricter provisions on the use of fixed-term and temporary agency contracts have a positive impact on the growth of labour shares.

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Poverty and labour market institutions in Europe

Cited by 10 publications

References 23 publications

No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

Is social spending pro‐poor in developing countries? The role of governance and political freedom

Labour market flexibilization and income distribution in Europe

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