engleski

Economic Implications Of Labour Market Organizaton

Labour is an essential and specific resource to a firm. The framework for any labour contract is set by the individual country’s regulation, i.e. its labour market institutional mechanism design. Our research problem is concentrated onto the objection of a growing discrepancy between firms’ needs and employment contracts as they are actually implemented under current regulation. The foremost economic question at hand is whether the labour market and firm’s regulatory institutional mechanism design is commensurate with the specific firm’s needs and the needs of the economy of that particular country. During the 20th century, employment regulation was mostly tightened under the excuse of greater worker protection consequently reducing the freedom of contract between employers and employees. Firms needed and asked for exactly the opposite: more flexible employment contracts. Employment regulation is an essential part of the legal business framework since it governs employment relationships and sets the span of contract flexibility, thereby influencing international competitiveness of a firm and the economy as well. We conjecture the less flexible working arrangements are the less beneficial is the employment environment as firms are more procrastinated by regulation. We investigate regulatory practices of selected European Union countries (Austria, Croatia, Finland, and Ireland) regarding labour market issues and its consequences. Labour market flexibility is a composite indicator of selected factors conjectured to ultimately influence the economic performance of nations. Our aim is to identify factors influencing labour market flexibility and the selected output variables such as employment, productivity, and others.

labour economics, employment regulation, labour flexibility, labour market organisation

This paper has been financially supported by the University of Rijeka, for the project ZP UNIRI 10/17