Project: Globalisation, Labour Markets, and the Welfare State

The project focuses on the interaction between the welfare state (WS), globalisation and labour market institutions in determining a country’s aggregate performance. Current research on these issues tends to suffer from a ‘micro/macro dichotomy’ that is only too common in economics. On the one hand, the effects of welfare state policies on labour markets have often been studied at a microeconomic level. On the other hand, many studies of the economy-wide labour market effects of globalisation focus on adjustments that occur across industrial sectors. This project aims to overcome this dichotomy. Evidence suggests that countries’ aggregate performance is very much influenced by microeconomic adjustments that occur at the industry level across individual firms and workers. The premise of our research is that only by capturing nuanced interactions between the microeconomic and macroeconomic adjustments that result from globalisation shall we be able to gain a better understanding of the role of welfare state policies in countering the labour market and income inequality effects of globalisation, thus addressing some of today’s most pressing policy dilemmas. Specifically, we conjecture that intra-industry adjustments at the micro level, such as market share reallocations resulting in changes in the distribution of firms’ productivities and labour market matching processes, are important in shaping the aggregate effects of the interaction between globalisation and welfare states. Methodologically, the project will consist of both theoretical and empirical work. Theoretical models will help identify the channels through which WS policies affect microeconomic and macroeconomic adjustments to globalisation. Empirical comparative analyses will both assess the theory’s testable hypotheses and identify important stylised facts from inter-country comparative analysis. Our results will advance research on WS futures and shed light on the relative effectiveness of different WS models in countering the labour market and income inequality effects of globalisation and on whether WS policies can contribute to explaining inter-country differences in aggregate labour market outcomes and productivity.

Acronym	GLOBLABWS (Reference Number: 462-14-121)
Duration	01/04/2015 - 31/03/2018
Project Topic	welfare state futures
Project Results (after finalisation)	not available yet
Website	visit project website
Network	WSF
Call	NORFACE Welfare State Futures

Project partner

Number	Name	Role	Country
1	University of Aberdeen	Coordinator	United Kingdom
2	Kiel Institute for World Economics	Partner	Germany
3	Lund University	Partner	Sweden