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Immigrants: Economic Performance

Five issues have dominated labor market research about immigrants: (a) the determinants of immigrants’ economic gains, (b) whether native-born residents gain or lose, (c) the changing labor market wages and skills of immigrants, (d) life-cycle assimilation of immigrants, and (e) generational progress. Despite extensive research, they remain controversial. The vast bulk of existing empirical research describes the American experience, but according to Zimmerman ( 1995 ) the less plentiful research on European migration does suggest that the wage and employment effects of immigration on European natives are similar to the USA. Consequently, while the conceptual issues that I discuss transcend national boundaries, I will rely in this article on empirical research findings from the USA.

Empirical Strategies in Labor Economics

Joshua D. Angrist, Alan B. Krueger, in Handbook of Labor Economics , 1999

2.1 The range of causal questions

The most challenging empirical questions in economics involve “what if” statements about counterfactual outcomes. Classic examples of “what if” questions in labor market research concern the effects of career decisions like college attendance, union membership, and military service. Interest in these questions is motivated by immediate policy concerns, theoretical considerations, and problems facing individual decision makers. For example, policy makers would like to know whether military cutbacks will reduce the earnings of minority men who have traditionally seen military service as a major career opportunity. Additionally, many new high school graduates would like to know what the consequences of serving in the military are likely to be for them. Finally, the theory of on- the-job training generates predictions about the relationship between time spent serving in the military and civilian earnings.

Regardless of the motivation for studying the effects of career decisions, the causal relationships at the heart of these questions involve comparisons of counterfactual states of the world. Someone – the government, an individual decision maker, or an academic economist – would like to know what outcomes would have been observed if a variable were manipulated or changed in some way. Lewis’s (1986) study of the effects of union wage effects gives a concise description of this type of inference problem (p. 2): “At any given date and set of working conditions, there is for each worker a pair of wage figures, one for unionized status and the other for non-union status”. Differences in these two potential outcomes define the causal effects of interest in Lewis’s work, which uses regression to estimate the average gap between them. 3

At first glance, the idea of unobserved potential outcomes seems straightforward, but in practice it is not always clear exactly how to define a counterfactual world. In the case of union status, for example, the counterfactual is likely to be ambiguous. Is the effect defined relative to a world where unionization rates are what they are now, a world where everyone is unionized, a world where everyone in the worker’s firm or industry is unionized, or a world where no one is unionized? Simple micro-economic analysis suggests that the answers to these questions differ. This point is at the heart of Lewis’s (1986) distinction between union wage gaps, which refers to causal effects on individuals, and wage gains, which refers to comparisons of equilibria in a world with and without unions. In practice, however, the problem of ambiguous counterfactuals is typically resolved by focusing on the consequences of hypothetical manipulations in the world as is, i.e., assuming there are no general equilibrium effects. 4

Even if ambiguities in the definition of counterfactual states can be resolved, it is still difiicult to learn about differences in counterfactual outcomes because the outcome of one scenario is all that is ever observed for any one unit of observation (e.g., a person, state, or firm). Given this basic difficulty, how do researchers learn about counterfactual states of the world in practice? In many fields, and especially in medical research, the prevailing view is that the best evidence about counterfactuals is generated by randomized trials because randomization ensures that outcomes in the control group really do capture the counterfactual for a treatment group. Thus, Federal guidelines for a new drag application require that efficacy and safety be assessed by randomly assigning the drug being studied or a placebo to treatment and control groups ( Center for Drug Evaluation and Research, 1988 ). Leamer (1982) suggested that the absence of randomization is the main reason why econometric research often appears less convincing than research in other more experimental sciences. Randomized trials are certainly rarer in economics than in medical research, but labor economists are increasingly likely to use randomization to study the effects of labor market interventions ( Passell, 1992 ). In fact, a recent survey of economists by Fuchs et al. (1998) finds that most labor economists place more credence in studies of the effect of government training programs on participants’ income if the research design entails random assignment than if the research design is based on structural modeling.

Unfortunately, economists rarely have the opportunity to randomize variables like educational attainment, immigration, or minimum wages. Empirical researchers must therefore rely on observational studies that typically fail to generate the same force of evidence as a randomized experiment. But the object of an observational study, like an experimental study, can still be to make comparisons that provide evidence about causal effects. Observational studies attempt to accomplish this by controlling for observable differences between comparison groups using regression or matching techniques, using pre-post comparisons on the same units of observation to reduce bias from unobserved differences, and by using instrumental variables as a source of quasi-experimental variation. Randomized trials form a conceptual benchmark for assessing the success or failure of observational study designs that make use of these ideas, even when it is clear that it may be impossible or at least impractical to study some questions using random assignment. In almost every observational study, it makes sense to ask whether the research design is a good “natural experiment.” 5

A sampling of causal questions that economists have studied without benefit of a randomized experiment appears in Table 2 , which characterizes a few observational studies grouped according to the source of variation used to make causal inferences about a single “causing variable.” The distinction between causing variables and control variables in Table 2 is one difference between the discussion in this chapter and traditional econometric texts, which tend to treat all variables symmetrically. The combination of a clearly labeled source of identifying variation in a causal variable and the use of a particular econometric technique to exploit this information is what we call an identification strategy. Studies were selected for Table 2 primarily because the source or type of variation that is being used to make causal statements is clearly labeled. The four approaches to identification described in the table are: Control for Confounding Variables, Fixed-effects and Differences-in-differences, Instrumental Variables, and Regression Discontinuity methods. This taxonomy provides an outline for the next section.

Table 2 . Identification strategies in observational studies a

Type of identifying information	Outcome variable	Causing variable	Estimator	Reference
I. Control for confounding variables
Control for ability and family background	Wages	Years of schooling	Regression	See Table 3
Control for past outcomes	Employment	Training programs	Regression and matching	Card and Sullivan (1988)
Earnings	Propensity score matching	Dehejia and Wahba (1995)
Propensity score matching	Heckman et al. (1997)
Control for military selection criteria	Earnings	Veteran status	Regression and matching	Angrist (1998)
II. Fixed-ejfects and differences-in-dijferences
Panel data/individual changes in status	Wages	Union status	Differencing/analysis of covariance	Freeman (1984)
Earnings	Training programs	Differences-in-differences	Ashenfelter and Card (1985)
The Mariel Boatlift	Employment of natives	Numbers of immigrants	Differences-in-differences	Card (1990)
Changes in state laws or rales	Injury duration	Workers’ Compensation benefit	Differences-in-differences	Meyer et al. (1995)
Unemployment Duration	Unemployment Insurance benefit	Differences-in-differences Hazard models	Solon (1985)
Change in Federal law	Employment	Anti-discrimination policy	Differences-in-differences	Heckman and Payner (1989)
Twin comparisons	Income	Years of schooling	Differencing	Behrman et al. (1980) ; Taubman (1976)
Earnings	Differencing/IV	Ashenfelter and Krueger (1994)
III. Instrumental variables
Twin births	Schooling	Fertility Teen fertility	2SLS	Rozensweig and Wolpin (1980) , Bronars and Grogger (1994)
Twin births	Labor supply	Fertility	Angrist and Evans (1998)
Sibling-sex composition
Year of birth	Wages	Years of schooling	2SLS	Hausman and Taylor (1981)
Quarter of birth	Angrist and Krueger (1991)
Draft lottery	Earnings	Veteran status	Two-sample IV	Angrist (1990)
Year of birth	Imbens and van der Klaauw (1995)
IV. Regression-disconlinuity methods
Financial aid thresholds	College enrollment	Financial aid	2SLS	van der Klaauw (1996)
Class-size maximum	Test scores	Class size	2SLS	Angrist and Lavy (1998)
Social Security Notch	Labor force participation	Social Security benefits	OLS	Krueger and Pischke (1992)

Search, Economics of

Abstract

The economics of search study the implications of frictions for individual behavior and market performance, due usually to imperfect information about exchange possibilities. This article reviews labor-market research in this area. Individuals search for a job offer by choosing a reservation wage and accepting jobs that pay above that wage. Firms create jobs to maximize profit. The probability of realizing a match is derived from an aggregate matching function that gives the number of jobs formed in terms of the search efforts of firms and workers. Because of monopoly rents implied by frictions, wages are determined either by bargaining or by take-it-or-leave- it offers posted by firms. Bargaining models share the surplus and give rise to a single wage for homogeneous labor that in general does not allocate jobs efficiently. Wage posting can give rise to a single wage equal to the worker’s reservation wage if the worker can only observe one wage offer at a time, or to the efficient allocation if posted wages can be observed but there are job queues, or to a distribution of wage offers if employed workers can sample more than one firm at a time. Job destruction is due either to job-specific shocks or to technological obsolescence.

Economic Panel Data

1 Introduction

A panel (or longitudinal or temporal cross-sectional) data set is one which follows a number of individuals over time, and thus provides multiple observations on each individual in the sample. Prominent examples are the University of Michigan’s Panel Study of Income Dynamics, the National Longitudinal Surveys of Labor Market Experience, and National Longitudinal Survey of Youth in the US and the Social Economic Panel, the Expenditure Index Panel of Intromart, and the Labor Mobility Survey from the Organization of Strategic Labor Market Research in the Netherlands. These labor market data samples contain thousands of individuals and variables followed over a number of years. In addition, panel data are also common in marketing studies, biomedical sciences, and financial market analysis, etc.

The increasing popularity of panel studies is partly a consequence of more cost effective ways of developing and maintaining panels (e.g., Mátyás and Sevestre 1996 ). More importantly, panel data offers many more possibilities for exploring analytical and substantive issues than purely cross-sectional or time series data. However, new data sources also raise new issues. This entry reviews the major advantages and limitations of panel data in the context of specific econometric methodologies. Section 2 gives an overview of the major advantages of the informational content of panel data. Section 3 reviews typical specifications for the linear models. Section 4 discusses issues of nonlinear models. Section 5 considers the implication of sample attrition and sample selection. Conclusions are in Sect. 6 .

Education and Employment

Education dissociates the learner physically from work in order to prepare in a rational way for coping with diversity of work and life tasks. Education has a qualifying function and a status-distributive function for economy and society and is among various factors determining graduates’ careers. Imperfect links between education and employment are due to limits in the identification of job requirements, occupational dynamics, indeterminate work tasks of the highly qualified workforce, planning gaps, diverse curricular concepts, and growing importance of lifelong education, whereby diverse value judgments come into play. Research on the relationships between education and employment is strongly influenced by a few economic paradigms, notably the human capital approach. But various other areas of research are relevant as well: labor market research, vocational education, educational sociology, sociology and history of the professional, sociology of mobility, etc. Past analyses of educational attainment excluded various modes of vocational training. Recent studies including apprenticeship systems observe an increase of the completion rate of upper secondary education from about 60 percent in 1970 to about 80 percent in the late 1990s. Higher education expansion nothwithstanding, the graduation ratio remained below 20 percent on average in industrial societies. Higher education graduates earn twice as much as compulsory school leavers on average in Europe, and investment in education surpasses the interests rates of business capital in the majority of industrial societies. Public debates had put a stronger emphasis on the vertical than horizontal ‘match’ between education and employment. A trend towards higher levels of education than necessarily required by the employment system is obvious, but terms such as ‘overeducation’ neglect the frequent and innovative use of competences, even if the position does not necessarily require a graduate. In the 1970s, concern grew about unemployment and precarious employment of youth. The higher the educational attainment, the lower is the risk of becoming unemployed. As youth unemployment is relatively low in countries with apprenticeship training systems, the German approach was most popular in the late 1970s. In the 1980s, the Japanese model of a combination of general vocational education and initial in-company on-the-job training was most widely appreciated, while in the 1990s, a search for new mixes and the appreciation of diverse models prevailed. Transition from education to employment, a recent focus of attention, is now viewed as a process taking up to 10 years of search, additional learning, etc. Transition processes and their results are not merely differently determined by varied educational approaches, but also by factors such as credentialism, impact of sociobiographic background, measures of conseling and placement, and by efforts on the part of graduates to improve their employment prospect through diligent search, smart tactics, and the demonstration of talents not rewarded in education. Education became the singly most important determinant of career in the nineteenth and twentieth centuries. Available research, however, suggests that other factors should not be underrated and that education increasingly becomes a precondition of career success in the process of educational expansion.

Education and Employment

The Professional Relevance of Education

Education dissociates the learner physically from work in early years of the life course in order to prepare in a rational way for coping with diversity of work and life tasks. Education has a qualifying function and a status-distributive function for economy and society and is among various factors determining graduates’ careers. Imperfect links between education and employment are due to limits in the identification of job requirements, occupational dynamics, indeterminate work tasks of the highly qualified workforce, planning gaps, diverse curricular concepts, and growing importance of lifelong education, whereby diverse value judgments come into play. Research on the relationships between education and employment is strongly influenced by a few economic paradigms, notably the human capital approach. But various other areas of research are relevant as well: labor market research, vocational education, educational sociology, sociology, and history of the professional, sociology of mobility, etc.

Views vary as regards the extent to which expansion of education was stimulated by a growing demand for highly qualified labor or the extent to which educational expansion itself triggered initially an absorption of more highly trained persons on the labor market and subsequently notions of increased demand. Over the decades, unemployment rates were lower in most economically advanced countries the higher the level of educational attainment was. Higher education graduates continued to earn on average of these countries twice as much as compulsory school leavers, and investment in education surpassed the interest rates of business capital in the majority of industrial societies.

Public debates had put a stronger emphasis on the vertical than horizontal ‘match’ between education and employment. A trend toward higher levels of education than necessarily required by the employment system is obvious, but terms such as ‘overeducation’ neglect the frequent and innovative use of competencies, even if the position does not necessarily require a graduate. In the 1970s, concern grew about unemployment and precarious employment of youth. The higher the educational attainment, the lower is the risk of becoming unemployed. As youth unemployment is relatively low in countries with apprenticeship training systems, the German approach was most popular in the late 1970s. In the 1980s, the Japanese model of a combination of general vocational education and initial in-company on-the-job training was most widely appreciated, while since the 1990s, a search for new mixes and the appreciation of diverse models prevails (see Cedefop, 2009 ). Transition from education to employment, a focus of attention since the 1990s, is now viewed as a process taking up to 10 years of search, additional learning, etc. Transition processes and their results are not merely differently determined by varied educational approaches, but also by factors such as credentialism, impact of sociobiographic background, measures of counseling and placement, and by efforts on the part of graduates to improve their employment prospect through diligent search, smart tactics, and the demonstration of talents not rewarded in education. Education became singly the most important determinant of career in the nineteenth and twentieth centuries. Available research, however, suggests that other factors should not be underrated and that education increasingly becomes a precondition of career success in the process of educational expansion, and income differences might be based to a decreasing extent on level of educational attainment once a knowledge society is realized with more than half of the population having attained tertiary education ( OECD, 1997 ).

Schooling is a social mechanism which, as a rule, dissociates the learner physically for a certain life period from the regular world of work and other life spheres. This is undertaken in order to prepare learners in a more rational manner for coping successfully with the diversity of work and other life tasks through explanations, rules, general reasoning strategies, etc. The more efficient the industrial society or postindustrial knowledge society became in producing wealth, the more the education system and generated competencies contributing to the production of goods and services expanded. Regarding the world of work, education has:

A qualifying (in the French and German connotation) function of fostering the cognitive and possibly affective and senso-motoric capabilities which might be useful to cope with job tasks.

A status-distributive function: the level of ‘educational attainment’ determines to a certain extent the monetary resources and the social recognition which will be available to individuals in their subsequent life; for education is a powerful factor – and has increasingly become so over the nineteenth and twentieth centuries – in opening up or closing access to prestigious occupations and providing the means for professional achievement and thus to remuneration and socioeconomic status.

These basic functions are undisputed. However, it is generally assumed that education is bound to be imperfect in preparing for the world of work, partly because rational learning through dissociation from practice has its price in less direct preparation for occupational tasks and because education is expected to serve broader functions. Also, other factors contribute to professional success, e.g., sociobiographic background, genetically determined abilities, specific dynamics of credentials, processes of transfer from education to employment, and finally lifelong learning and personal development. Thus views vary as regards the actual ways education is and ought to be shaped as well as the actual impacts learning has and ought to have on subsequent employment and work. However, recent years were characterized by an increasing public expectation that education serve more visibly the preparation for work, as the growing popularity of the term ‘employability’ suggests (see Knight and Yorke, 2003 ).

Higher Education Research

A Theme-Focused and Practically Relevant Field

The respective key literature underscores that higher education research is a theme-focused area of research: It addresses higher education (or tertiary education), its functions, institutional settings, and social context. Here, much is in common with other areas of behavioral and social sciences that gained attention and support for its thematic focus. Actually, some activities in this domain touch upon neighbor areas of thematic research, e.g., science of science, youth research, labor market research, or research on competences.

Higher education research does not have the typical basis of legitimacy as classical disciplines within universities and other institutions of higher education. It is not viewed as having emerged from the logic of the knowledge system, but rather from practical demands for knowledge. As a consequence, it has to find ways constantly to be both, respectable as a discipline in theoretical depth, methodological quality, and breadth of field knowledge and as a provider of a valuable knowledge base for policy and practice.

Higher education research draws from a multitude of disciplines, notably education, psychology, sociology, political science, economics and business studies, law, and history.

It is linked to many interdisciplinary areas as well. For example, Clark (1984) included in his overview on research fields ‘the political view,’ ‘the organizational conception,’ and the ‘the policy perspective.’ In 1992, an encyclopedia on higher education names among ‘disciplinary perspectives on higher education’ also ‘anthropology,’ ‘linguistics and rhetorical studies,’ ‘literature,’ ‘science studies,’ and ‘women’s studies’ ( Clark and Neave, 1992 ).

Actually, various key thematic areas of higher education gain from ties to a variety of disciplines or interdisciplinary areas; e.g., research on the relationships between higher education and the world of work benefits from the knowledge of economics, sociology, and psychology as well as from interdisciplinary research on labor markets, professions, personnel management, competences, etc.

Higher education research, as many thematically defined fields as well, is disadvantaged vis-à-vis typical disciplines in various respects:

The institutional basis within the academic domain of universities often is feeble and unstable.

There are widespread claims that the theoretical and methodological advancements of behavioral and social sciences are stronger, if they are discipline-based, and that multidisciplinary areas just borrow from the disciplines and lack academic rigor.

Often, theme-based fields do not have a visible educational role in terms of separate study programs and doctoral training activities. This makes the field vulnerable as far as institutional stability and ‘self-reproduction’ of future generation of scholars are concerned.

The development of higher education research is clearly supported by practical needs. A first trend report published in the early 1970s ( Nitsch and Weller, 1970–1973 ) showed that it had been a marginal field in most countries of the world until the 1960s. It began to grow as a consequence of three developments: First, the growing belief fueled by concepts of economics education that an increase of postcompulsory education was essential for economic growth; second, a spreading conviction – reinforced by the student protests in the 1960s – that higher education was not functioning properly through incremental self-regulation and improvements, but rather faced substantial features of crisis that needed strategic responses; and third, the actual rapid expansion of higher education called many traditions into question.

The strong impact of policy and practice on higher education research is mirrored in the fact that the majority of research activities in this domain are undertaken outside academia. Moreover, research undertaken in the academic domain often is funded for practical purposes, and changes quickly thematic priorities in tune with the public discourse: Higher education research is likely to grow in areas, when respective problem awareness surface and reform efforts gain momentum, and is likely to grow overall, when sweeping broad-ranging reforms are underway, e.g., in Europe early in the twenty-first century in the wake of the so-called ‘Bologna Process.’

The practical interest in knowledge about higher education, however, does not turn out to assure consistently a solid support for research in this domain:

Academics and other representatives of higher education tend to believe generally that progress and innovation depend on the generation and interpretation of systematic knowledge. When it comes to higher education policy and practice as such, however, the belief is widespread, however, that firsthand experience and reflection on the part of the knowledgeable actors themselves are sufficient basis for wise strategic action.

Policy makers and practitioners often advocate a tailor-made information gathering expected to serve decisions (‘evidence-based’ policy based on ‘policy-based’ research). As a consequence, many of the respective analyses lack a thorough theoretical basis and methodological soundness as well as a critical questioning of conventional wisdom.

The rapid pace of changing political issues causes difficulties for higher education research in serving the reflection of these issues. Often, information is lacking when an issue surfaces; as a consequence, often poorly founded systematic information is put before. In turn, support for research often fades away when the respective theme is not anymore in the limelight of public debate, even though systematic information remains relevant as a basis of continuous improvement.

Certainly, higher education research constantly has to find ways to strike a balance between theoretical, methodological, and field knowledge consolidation like any discipline and to serve the needs of problem identification and problem solving like any applied field. The growing popularity of terms, such as ‘mode 2 research,’ ‘targeted research,’ etc., indicates that this is a typical challenge for many areas in the behavioral and social sciences.

Australia: institutional changes and workforce fragmentation

4 New issues and social debates

The debate on changing employment conditions in Australia is growing. In the 1980s, a broad consensus about the deficiencies of the previous employment regime and the need to create a more open economy underpinned the policy discussion. However, as government initiatives extended from product and financial markets to labour markets, and as the outcomes for individual workers became clearer, more disquiet has emerged.

Discussion and debate on changing employment conditions cover a range of issues, some familiar in other countries, some less familiar. The ageing society is the subject of an emerging background debate. Unemployment and joblessness is a traditional concern, linked in to policy discussion around wages policy and social security. Low-paid work is a concern for some, though others argue that earnings inequality is less significant than income inequality and that in any case low-paid workers are not necessarily in low-paid households. Concerns around non-standard employment, including in particular casual employment, working-time patterns and job quality, have been staples of labour market research and public discussion for the past ten years. This research is now voluminous, but it has had little impact so far on policy. Responses from government officials, often backed up by commentators from right-wing think tanks, have typically conceded the facts but sought to deny the policy implications, often shifting the subject either to the more flattering data on macroeconomic indicators or to attitudinal data suggesting that most workers are relatively satisfied with their jobs ( Australian Government, 2003 ).

One crucial current debate concerns productivity growth. A key rationale for neoliberal policy changes to labour regulation was the need to boost lagging productivity growth. Some economists have drawn attention to data for changes in multi-factor productivity in the mid- to late 1990s. They argue that there was a productivity surge that could be plausibly linked to labour market reforms, providing potent evidence for the value of the policy changes of the early 1990s ( Parham, 2000 ). Subsequent discussion has challenged this view, and the evidence now looks questionable: the rate of growth of multi-factor productivity has retreated in subsequent years, in spite of the continuation of labour market reforms. Critics suggest that even the growth in the earlier period is something of a statistical illusion ( Hancock, 2005 ; Quiggin, 2006 ). Quiggin (2006) argues that it is at best a temporary blip, most plausibly related to temporary factors such as recovery from the recession and unsustainable increases in work intensity. The debate on productivity extends into a discussion of the likely impact of current and prospective changes on productivity ( Burgess and Waring, 2005 ). In particular attention has been given to the impact of individual contracting on productivity, but the verdict seems to be negative ( Peetz, 2006 ).

Also important is a current debate on skill shortages. The conventional view in business circles sees evidence of large-scale shortages and overfull employment in many areas. As in the case of the debate on the ageing society, this is in turn seen as necessitating mobilization of reserves of labour. For employers concerned with skill shortages, the immediate remedy tends to be sought in immigration policy, through calls to boost immigrant numbers, to broaden the categories defined as skilled in the general skilled migration programme, and to allow easier access to temporary migrant workers. On the other hand, critics have suggested that talk of tight labour markets is often exaggerated. The notion of skill shortages is slippery ( Richardson, 2007 ). Skill shortages are real, but some can be related back to the impact of specific employer practices, including the employer retreat from training, especially apprenticeships in skilled trades, and the degradation of job quality in areas such as nursing and maintenance work ( Watson et al., 2003 ). A market approach to training has been dominant for the past ten years, but it now seems to be running up against its limits ( Hall and Lansbury, 2006 ).

One element of the debate on skill shortages concerns its possible effect as a countervailing pressure on the impact of recent changes in labour regulation. It is sometimes suggested that skill shortages could make employers ‘wary of being seen to cut conditions for fear of being unable to attract or retain good staff’ ( Stewart, 2006 , pp. 53–4). Again it is useful to be cautious. Though labour shortages are a major issue in certain trades and professions and in certain geographic areas, they may not be as widespread as is often feared. It is hard to resist the conclusion that labour and skill shortages are unevenly distributed, and skill shortages can ‘still co-exist with plentiful labour supply in low-pay labour markets’ ( Briggs and Buchanan, 2005 , p. 185). Nor is the link between skill shortages and employer caution as straightforward as is often suggested. Certainly skill is vital in giving workers some bargaining strength, and skill shortages may slow down employer initiatives. However, the key pressures on employers derive from product markets, and there is a danger that competitive advantages secured by one employer as a result of reduced wages and conditions will force other employers to follow suit ( Briggs, 2005 ).

Employer strategies have not received the attention they deserve, and in a more deregulated environment these may come even more to the fore. There is some concern that changing financial markets and the dominance of shareholder value have shaped employer strategies and pushed them too far in the direction of the pursuit of short-term gains ( Watson et al., 2003 ). This concern is growing, as financial markets again experience the return of leveraged buyouts from private equity groups.

The policy settings of the last ten years remained fixed while the federal Coalition government was fixed in office. Alternative principles and policies have been slow to emerge, but a few signs can be detected. States such as Victoria have experimented with new initiatives to restore regulatory protection. At the crucial federal level, awareness that the most recent changes do not involve deregulation but rather just different, often highly prescriptive, regulation has helped to focus interest in the possibility of different regulatory principles. Similarly, the almost-complete demise of the old system of awards has cleared the way for some new thinking. A simple defence of traditional institutions and achievements is no longer practicable or plausible. Instead, critics are obliged to put forward their ideas on alternative paths towards modernization of the employment system. Inspired by this logic, the central trade union body and the Labor Party have developed a model for a revised labour regulation system at the federal level. This would be based on a stronger floor of minimum conditions and provisions for union recognition in order to support single-employer collective bargaining, though it would still stop short of full support for multi-employer collective bargaining ( ACTU, 2006 ; Briggs, 2007 ). Some social-democratic circles have sought to develop the European ideas of transitional labour markets ( Howe, 2007 ). Similarly the Human Rights and Equal Opportunities Commission (HREOC) has sought to intervene in the work–family debate with a major report that supports the valued care–shared work model ( HREOC, 2007 ). These are important straws in the wind, though the gulf between the world of research and the world of policy is yet to be bridged.

The new federal Labor government is entering office with a policy that promises to remove the worst excesses of Work Choices ( ALP, 2007 ), for example by restoring unfair dismissal rights and by removing opportunities for employers to lower conditions through AWAs. However, it seems likely that the Labor government will retain several aspects of the regulatory framework introduced by the previous government. Much will depend on the unfolding of debate and discussion in the next few years.



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Finding rate instead, other factors influencing contemporary labor markets, the labor market will reach equilibrium when the supply of labor equals the demand for labor. Please submit your application in English by 10 March 2020 to: Dr Sandra Huber E, m14 8a1 1 labour Market Research 011 1v7h2. You’ll learn about what the labor market is, based Editorial Manager provided by Springer.

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