A tale of oversimplification and deregulation: the mainstream approach to labour market segmentation and the recent responses to the crisis in European countries. WP C.S.D.L.E. “Massimo D’Antona”.INT – 102/2013

After advocating flexibilization of non-standard work contracts for many years, some European and international institutions and several policy makers now indicate the standard employment relationship and its regulation as a cause of segmentation between the labour market of "guaranteed" insiders, employed under permanent contracts with effective protection against unfair dismissal, and the market of the “not-guaranteed” outsiders, working with non-standard contracts. Reforms of employment legislation are therefore being promoted and approved in different countries, allegedly aiming to balance the legal protection afforded to standard and non-standard workers. This article firstly argues that this approach is flawed as it oversimplifies reasons of segmentation as it concentrates on an “insiders-outsiders” discourse that cannot easily be transplanted in continental Europe. After reviewing current legislative changes in Italy, Spain and Portugal, it is then argued that lawmakers are focused on “deregulation” rather than “balancing protection” when approving recent reforms. Finally, the mainstream approach to segmentation and some of its derivative proposals, such as calls to introduce a “single permanent contract”, are called into question, as they seem to neglect the essential role of job protection in underpinning the effectiveness of fundamental and constitutional rights at the workplace.

The Market for Tractors in the EU: Price Differences and Convergence. Factor Markets Working Documents No. 35, February 2013

This study evaluates the degree of segmentation of the market for agricultural machinery and equipment in the EU. We focus on agricultural tractors, the most common and biggest investment in machinery and equipment in the agricultural sector. By using country price data for individual tractor models, we test the law of one price, i.e. the existence of a common price for tractors across EU member states. We find that significant price differences exist, yet unlike most other studies we find that large price deviations are penalised within a short time. The study also shows that transport costs are an important source of price differences, as domestic production leads to lower prices on the domestic market and as price convergence is negatively correlated with distance. Finally, price differences should not solely be understood from a geographical perspective, as evidence supports the idea that farmers’ buying power is significant in explaining price differences within countries.