Essays on labour market dualisation in Western Europe: active labour market policies, temporary work regulation and inequality

European labour markets are increasingly divided between insiders in full-time permanent employment and outsiders in precarious work or unemployment. Using quantitative as well as qualitative methods, this thesis investigates the determinants and consequences of labour market policies that target these outsiders in three separate papers. The first paper looks at Active Labour Market Policies (ALMPs) that target the unemployed. It shows that left and right-wing parties choose different types of ALMPs depending on the policy and the welfare regime in which the party is located. These findings reconcile the conflicting theoretical expectations from the Power Resource approach and the insider-outsider theory. The second paper considers the regulation and protection of the temporary work sector. It solves the puzzle of temporary re-regulation in France, which contrasts with most other European countries that have deregulated temporary work. Permanent workers are adversely affected by the expansion of temporary work in France because of general skills and low wage coordination. The interests of temporary and permanent workers for re-regulation therefore overlap in France and left governments have an incentive to re-regulate the sector. The third paper then investigates what determines inequality between median and bottom income workers. It shows that non-inclusive economic coordination increases inequality in the absence of compensating institutions such as minimum wage regulation. The deregulation of temporary work as well as spending on employment incentives and rehabilitation also has adverse effects on inequality. Thus, policies that target outsiders have important economic effects on the rest of the workforce. Three broader contributions can be identified. First, welfare state policies may not always be in the interests of labour, so left parties may not always promote them. Second, the interests of insiders and outsiders are not necessarily at odds. Third, economic coordination may not be conducive to egalitarianism where it is not inclusive.

Recovering the counterfactual wage distribution with selective return migration

This paper recovers the distribution of wages for Mexican-born workers living in the U.S. if no return migration of Mexican-born workers occurred. Because migrants self-select in the decision to return, the overarching problem addressed by this study is the use of an estimator that also accounts for selection on unobservables. I find that Mexican returnees are middle- to high-wage earners at all levels of educational attainment. Taking into account self-selection in return migration, wages would be approximately 7.7% higher at the median and 4.5% higher at the mean. Owing to positive self-selection, the immigrant-native wage gap would, therefore, partially close if there was no return migration.

Bt cotton, pesticides, labour and health - A case study of smallholder farmers in the Makhathini Flats, Republic of South Africa

This paper describes some of the results of a detailed farm-level survey of 32 small-scale cotton farmers in the Makhathini Flats region of South Africa. The aim was to assess and measure some of the impacts (especially in terms of savings in pesticide and labour as well as benefits to human health) attributable to the use of insect-tolerant Bt cotton. The study reveals a direct cost benefit for Bt growers of SAR416 ($51) per hectare per season due to a reduction in the number of insecticide applications. Cost savings emerged in the form of lower requirements for pesticide, but also important were reduced requirements for water and labour. The reduction in the number of sprays was particularly beneficial to women who do some spraying and children who collect water and assist in spraying. The increasing adoption rate of Bt cotton appears to have a health benefit measured in terms of reported rates of accidental insecticide poisoning. These appear to be declining as the uptake of Bt cotton increases. However, the understanding of refugia and their management by local farmers are deficient and need improving. Finally, Bt cotton growers emerge as more resilient in absorbing price fluctuations.