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WeLaR workshop on labour market institutions and risks features 10 papers 

The workshop “Labour market institutions and risks” provided an outstanding platform for WeLaR scholars and other labour economists to share recent research on topics such as innovation, gender disparities, vulnerabilities, and labour market dynamics.

Organised by WeLaR researchers Cristiano Perugini and Fabrizio Pompei from the University of Perugia’s Department of Economics, the event took place on 28 June 2024 and featured 10 presentations. Participants also had the opportunity to reflect on how the workshop’s findings could influence policy changes.

The first session focused on the role of innovations in the labour market. Kenta Ikeuchi (RIETI)presented the paper “Innovative capital and rent-sharing: Employees’ characteristics, employers’ heterogeneity and rent-sharing in Japan”. Co-authored by Fukao Kyoji, Cristiano Perugini, and Fabrizio Pompei, the paper explores the employer-specific factors that lead to differences in profit-sharing with workers. The authors found that a 1% increase in a company’s earnings, measured by the value added per employee, results in a 0.1% wage increase for regular Japanese workers. Additionally, larger, older, and more internationalised companies investing in digital technologies were more likely to share their profits with workers. Next, Sem Vandekerckhove  (KU Leuven) presented the findings of the WeLaR research paper “Bargaining models, the quality of work and rent-sharing in the era of digitalisation”. This study examined whether technological change pushes employees towards atypical employment, such as part-time and fixed-term contracts, negatively affecting their financial security. The study found that digitalisation does not adversely impact employment conditions, and stronger wage coordination is associated with a lower incidence of fixed-term contracts. The session concluded with Katsufumi Fukuda (Chukyo University) presenting “Technological Choice between nonautomation and automation and labour income share”.

The second session focused on gender gaps and featured two presentations. Seamus McGuinness (ESRI) discussed the paper “The impact of a minimum wage increase on hours worked: heterogeneous effects by gender and sector,” co-written with Paul Redmond. The authors found that in Ireland, a 10% increase in the minimum wage led to a one-hour reduction in weekly working time, with a more significant decline in the manufacturing, food, and accommodation sectors. Interestingly, women’s working hours were not affected, while men experienced a decrease of 1.5 hours per week. The wage increase was sufficient to offset the negative impact of fewer hours worked. Next, Piotr Lewandowski (IBS) presented the paper “Job tasks, working hours, and the gender pay gap”, co-written with Sarra Ben Yahmed and Marta Palczyńska. The paper demonstrates that shorter working hours lead to more routine-intensive tasks, which are associated with lower earnings. This in turn contributes to the gender pay gap within occupations, because women tend to be less flexible and work shorter hours. However, the researchers found that the differences in task allocation between men and women based on hours worked explain only a small part of the earnings gap between highly skilled men and women.

The session on vulnerabilities began with Sandra Leitner (wiiw) discussing the WeLaR paper “Offshoring, technological change and the quality of work in the EU: On the mediating role of trade unions”, co-authored with Laetitia Hauret, Ursula Holtgrewe and Ludivine Martin. The authors analysed the impact of three factors: types of technological change (robotisation and various ICT assets), offshoring practices, and the mitigating role of trade unions on job quality measured by the proliferation of temporary contracts and involuntary part-time work. The findings indicate that technological change and offshoring increase the likelihood of atypical employment in the EU, although the effects vary by sector and over time.

Wojciech Szymczak (IBS) followed with a presentation “Technology, trade unions, and atypical employment,” which found that adoption of industrial robots significantly increases the share of workers in involuntary atypical employment. He also showed that while the effect of technology on atypical employment varies widely across EU countries, trade unions play a crucial role in mitigating this negative impact. The session concluded with Fabrizio Pompei (University of Perugia) discussing the WeLaR paper “Labour and product market regulations and vulnerability”, which shows that in the context of accelerating automation, changes in labour law that overly protect workers or excessively deregulate labour markets may do more harm than good for Europe’s youngest employees.

The session on labour market flows featured two presentations. Maria Cristina D’Aguanno (University of Modena-Reggio Emilia) discussed the paper “Individual and household drivers of in-work poverty in the EU”, which she co-wrote with Anne-Catherine Guio and Philippe Van Kerm. The paper explores the connection between employment conditions and poverty status, and identifies the determinants of in-work poverty. Fabio Lamperti (University of Perugia) presented the WeLaR paper “Aggregate megatrends and the risk of labour market exclusion across Europe”, co-written with Davide Castellani. Lamperti highlighted that unemployment, and its duration are persistently higher among middle-aged and less-educated individuals. The paper found that four megatrends – digitalisation, climate change, demographic shifts, and globalisation have little or no effect on long-term unemployment and inactivity, with individual and labour-market characteristics playing a more significant role.

The workshop concluded with a debate on the potential policy implications of the findings presented throughout the day. Ursula Holtgrewe (ZSI) moderated the discussion, encouraging participants to identify the most important insights from both policy and scientific perspectives. The debate clustered around such topics as data and indicators, vulnerabilities and mitigating policies, the role of trade unions, the effects of technology, and reflections on the four megatrends, their variations, and contextual influences.

 

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