Patterns of non-employment: labor market institutions and employment performance of social groups

a Working Paper (Number 145) by Thomas Biegert published by the Mannheim Center for European Social Research

Abstract

Increasing labour market participation to a high level is seen as a necessary means for international economic competitiveness and sustainable financing of the welfare state. One of the major goals of labour market research is, therefore, to explore why certain social groups are less likely to be employed.

While most research focuses on the determinants of unemployment, this study includes also inactive persons, thus examining the total non-employed population. The paper argues that labour market institutions interact with individual characteristics and resources, thereby shaping nationally specific patterns of non-employment. Following a social structural approach, it analyses the institutional effects on individual employment performance in 14 countries using the European Labour Force Survey.

Non-employment patterns are disaggregated by gender, age group and educational level.

Institutional arrangements are modelled by including macroeconomic indicators into pooled cross-sectional models with country, country-education level, country-age group, and year fixed-effects.

Results not only indicate the important role of the institutional context in forming absolute levels of non-employment, the observed group differences also underline that labour market institutions shape the social composition of non-employment. Furthermore, institutional arrangements commonly associated with inactivity have an impact on overall non-employment. The evidence for institutional interactions supports the need for developing comprehensive models of national employment régimes.

Full text (PDF 41pp)

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