Labour market outcomes of different institutional regimes: Evidence from the OECD countries

Abstract

The rise of populism has been widely ascribed, at least in part, to an inability of national systems to generate decent employment or, indeed, stem its decline. This article explores the basis and nature of variations in labour market outcomes of different institutional regimes. For this comparative institutional analysis, we build indexes of labour market outcomes in the OECD countries, measuring actual cross-country variations and encompassing a much wider range of evidence in terms of countries and time periods covered than previous studies. We show that in terms of job availability and wages, the liberal market economies (LMEs) have advantages, but once involuntary part-time employment and wage inequality are considered, labour market outcomes appear superior in the continental European countries and the Scandinavia social democracies. However, any advantages of the LMEs appear to be diminishing since the global financial crisis. Compared with other regimes, Southern European and transitional economies have lower level of job availability and wage rates but are comparable in other aspects of the labour market.