Open AccessLabour market flexibilization and income distribution in Europe
Author(s) -
Philip Arestis,
Jesús Ferreiro,
Carmen Gómez
Publication year - 2021
Publication title -
panoeconomicus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.289
H-Index - 14
eISSN - 2217-2386
pISSN - 1452-595X
DOI - 10.2298/pan2102167a
Subject(s) - employment protection legislation , economics , unemployment , labour economics , distribution (mathematics) , wage share , labour market flexibility , legislation , wage , flexibility (engineering) , income distribution , compensation (psychology) , agency (philosophy) , wage growth , efficiency wage , macroeconomics , inequality , psychology , mathematical analysis , philosophy , mathematics , management , epistemology , political science , psychoanalysis , law
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.