GlobLabWS: Globalisation, Labour Markets, and the Welfare State

In an age of high public debts and ever-growing international competition, the welfare state is often portrayed as generating a culture of welfare dependency and is ultimately seen as unsustainable. Against this background, GlobLabWS aimed to explore the role of the welfare state in shaping the relationship between globalisation and labour markets and in affecting a country’s economic performance and ability to respond to exogenous shocks. 

Results

Results from the research show that many conventional views arise from narrow theoretical premises that fail to capture the complexity of the processes at work. Globalisation and participation in the global production chain affect workforce structure, with increased importance of more skilled occupations and degree of mismatch between workers’ skills and those demanded by firms, e.g. over-education. The welfare state plays an important role in mediating these effects. Comparison among welfare state systems suggests that Nordic countries perform better in terms of aggregate labour market outcomes than countries with less generous welfare states and more flexible labour markets.

The results of GlobLabWS are central to current socio-economic debates on the effectiveness and sustainability of welfare state institutions and provide policy makers with deeper understanding of the key trade-offs entailed by different policy scenarios. The project showed that globalization has relatively large distributional consequences. Benefits tend to be skewed towards high skilled workers at the expense of low/middle skilled groups. This warrants the need for ‘enabling welfare state’ systems that support workers’ movements between occupations, a prerequisite also to secure an acceptance for the economic benefits globalisation can bring at an aggregate level. GlobLabWS provided useful suggestions as to the key features of an enabling welfare state. The project showed that much is to be gained from the experiences of countries, such as Denmark, that combine good productivity and export performance with generous active and passive labour market policies.

More information can be found on the GlobLabWS website.