Globalisation, Labour Markets, and the Welfare State

• Applicant: Professor Holger Görg, Ph.D.
• Subject Area: Economic Theory ; Economic Policy, Applied Economics
• Term: from 2014 to 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 260338231

This pan-European collaborative project aims to study the interaction between the welfare state (WS), globalization, and labour markets in determining a country s aggregate performance. We shall first study how the WS shapes the effects of globalisation on individual labour market outcomes, with a focus on the role of competitive selection between firms and labour market matching processes. This will provide the foundations for the second part of the project that will examine the implications of a country s WS policies on its aggregate employment and productivity.Methodologically, the project will consist of both theoretical and empirical work. Theoretical models will help identify the channels through which WS policies affect microeconomic adjustments to globalisation and, through these, macroeconomic performance. 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. The project is central to the theme Rethinking the Economics of the Welfare State, by enhancing understanding of how micro-adjustments to globalization and WS policies affect macroeconomic performance. It also cuts across the Inequality, Diversity and the Welfare State theme, by highlighting the role of important dimensions of inequality in labour markets in shaping the effectiveness and sustainability of WS programmes.

• DFG Programme: Research Grants
• International Connection: Sweden, United Kingdom
• Participating Persons: Professorin Catia Montagna, Ph.D.; Professor Fredrik Sjöholm, Ph.D.