Outsiders are gradually getting inside labour markets

Subject

Insider labour markets

Significance

Ten years after the global financial crisis, unemployment remains high in many countries but has reached new lows elsewhere. Differentiating the experiences are the institutions, laws and norms in which employment is embedded, particularly the protection granted to ‘insiders’ -- incumbent workers protected by high labour turnover costs. The distinction between insiders and outsiders is gaining prominence in the policy recommendations of international organisations.

Impacts

• Technological change and more open markets will continue to exacerbate the unpredictability of jobs and livelihoods.
• Labour constraints are a political response to layoffs but at the cost of less flexibility; the imbalance is being rectified.
• Countries with the most rigid labour markets will continue to experience high unemployment, particularly among the young.