Labour market policies and institutions

An important part of today's labour economics has been increasingly concerned with the issue of labour market institutions/regulations, their interactions and their impact on different economic and labour market outcomes. Labour market regulations actually include labour market institutions as well as part of labour market policies: they cover wage setting institutions, mandatory social benefits, the unemployment insurance system, as well as different aspects of labour legislation (law on minimum wage, employment protection legislation, and the enforcement of the legislation). Labour market policies (LMP), on the other hand, comprise all kinds of regulative policies that influence the interaction between labour supply and demand. They consist of polices that provide income replacement (usually called passive labour market policies) as well as labour market integration measures available to unemployed or those threatened by unemployment.

Key research areas relate to:

  • Role and relevance of labour market regulations in emerging and developing countries: in many low income countries, labour regulations appear to be ill-designed to facilitate the development process. What type of social protection can be provided?
  • Relationship between labour market regulations and informalities: What is the impact of labour market regulations and institutions on informalization in developing countries? Which LM regulation may impact on the supply side to move from informal to formal economy?
  • What is the role of ALMPs and how can they be designed to have the most positive effect on labour markets in different regional context?
  • What are the (pre)conditions for having flexicurity system in place: is flexicurity valid only for high income countries?
  • How can the policy mixed be better targeted to address the different needs of vulnerable groups? How to reduce the dichotomy between more protected workers (insiders) and the more precarious ones (outsiders)?
Further research within this field should also include efforts on the measurement side and follow-up to the discussion and attention on the Employing Workers Index of the DB Report.

Key resources

  1. The Doing Business indicators : measurement issues and political implications

    01 May 2007

    Economic and Labour Market Paper 2007/6

  2. Active labour market policies around the world. Coping with the consequences of globalization. (Second edition)

    30 April 2008

    This revised and updated edition provides an authoritative account of how active labour market policies (ALMPs) can help make globalization work better in the interest of workers around the world.

  3. The employment effects of North-South trade and technological change

    01 June 2008

    Employment Working Paper No. 22

  4. Security in labour markets : combining flexibility with security for decent work

    01 October 2007

    Economic and Labour Market Paper 2007/12

  5. Labour market regulation and economic performance : a critical review of arguments and some plausible lessons for India

    01 January 2008

    Economic and Labour Market Paper 2008/1

  6. In defence of labour market institutions. Cultivating justice in the developing world

    21 February 2008

    Though labour market regulations have been blamed for the poor economic performance of many developing countries, the evidence on which this argument rests is weak. Rather than constraining economic development, labour market institutions, including the laws that regulate the labour market, are important for both economic growth as well as the well-being of the workforce. Through a survey of different labour market institutions in developing countries, this volume reaffirms the importance of labour market institutions in this era of globalization.

  7. Flexicurity: A relevant approach in Central and Eastern Europe

    25 January 2007

    This book argues, with case studies contributed by outstanding national experts, that the flexicurity approach is the most relevant for Central and Eastern European countries and suggests appropriate reforms of economic policy, institutional framework of the labour market, labour market policy and education and social policies in this region.

  8. Is Asia adopting flexicurity? : A survey of employment policies in six countries

    01 May 2008

    Economic and Labour Market Paper 2008/4

  9. The global employment challenge

    01 May 2008

    This volume offers an in-depth analysis of the state of employment in the world today, providing a detailed and comprehensive picture of the serious challenges faced by today's policy-makers...

  10. L'intermédiation sur le marché du travail dans les pays du Maghreb. Etude comparative entre l'Algérie, le Maroc et la Tunisie

    09 February 2006

    Au cours de ces dernières années, l'Algérie, le Maroc et la Tunisie ont connu d'importantes mutations de leur situation de l'emploi, avec notamment l'arrivée chaque année sur le marché du travail d'un nombre considérable de jeunes, l'essor de l'activité des femmes et l'accroissement des licenciements résultant des restructurations économiques, en particulier dans le secteur public. Ce livre analyse en les comparant, les politiques et institutions du marché du travail de ces trois pays, et fait des recommandations en vue d'en améliorer le fonctionnement. Il conclut en particulier à la nécessité de renforcer le rôle des partenaires sociaux, à l'intérêt d'élaborer des plans d'action nationaux pour l'emploi, ainsi qu'au besoin d'améliorer la gouvernance des politiques de l'emploi.