Effect of the integration into Global Value Chains on the employment contract in Central and Eastern European countries

• Authors: Dagmara Nikulin , Sabina Szymczak

Abstracts

EN

Research background: In the era of globalization, there is a need to address decent work deficits in Global Value Chains (GVCs). The forms of working conditions reveal a broad dispersion of contents. The literature review exposes hardly any Europe-focused research assessing the socio-economic impact of global production links and going beyond their pure economic effects assessed in terms of employment, productivity or wages. Purpose of the article: This paper investigates how involvement in GVCs affects labor standards. In particular, we assess how the integration into GVCs impacts the probability of having indefinite type of employment contract, which stands for one of the decent work indicator. Moreover, we draw individual and firm-level characteristics determining the type of employment contract. Methods: We use linked employer-employee data from the Structure of Earnings Survey merged with industry-level statistics on GVCs based on World Input-Output Database ? the sample is composed of over 5 million workers from 10 Central and Eastern European countries (CEEC) observed in 2014. The involvement into GVCs is measured using a novel approach based on the concepts of global import intensity (GII). We employ logistic regression with robust standard errors. Findings & Value added: Controlling for individual and firm-level characteristics (sex, age, education level, length of service in enterprise, size of the enterprise) we find that greater integration into GVCs increases the probability of having temporary type of employment contact, mainly in tradable sectors. However, across CEE countries the relation between GVC and employment type is mixed. In this way we expand the existing literature by reporting the effects of GVCs on labor standards in CEEC.

Keywords

EN

working conditions; Global Value Chains; well-being of workers; employment contract

• Publisher: Instytut Badań Gospodarczych
• Journal: Equilibrium. Quarterly Journal of Economics and Economic Policy
• Year: 2020
• Volume: 15
• Issue: 2
• Pages: 275-294

Dates

published

2020

Contributors

author

Dagmara Nikulin

• Gdańsk University of Technology

• https://orcid.org/0000000205344553

author

Sabina Szymczak

• Gdańsk University of Technology

• https://orcid.org/0000000186900891

References

• Aleksynska, M. (2018). Temporary employment, work quality, and job satisfaction. Journal of Comparative Economics, 46(3). doi: 10.1016/j.jce.2018. 07.004.
• Asano, H., Ito, T., & Kawaguchi, D. (2013). Why has the fraction of nonstandard workers increased? A case study of Japan. Scottish Journal of Political Economy, 60. doi: 10.1111/sjpe.12015.
• Autor, D. H., & Dorn, D. (2013). The growth of low-skill service jobs and the polarization of the US labor market. American Economic Review, 103(5). doi: 10.1257/aer.103.5.1553.
• Babos, P. (2014). Step or trap? Transition from fixed-term contracts in Central Eastern Europe. Post-Communist Economies, 26(1). doi: 10.1080/14631377 .2014.874230.
• Baranowska, A., & Gebel, M. (2010). The determinants of youth temporary employment in the enlarged Europe: do labour market institutions matter? European Societies, 12(3). doi: 10.1080/14616690903165434.
• Bardasi, E., & Francesconi, M. (2004). The impact of atypical employment on individual wellbeing: evidence from a panel of British workers. Social Science & Medicine, 58(9). doi: 10.1016/s0277-9536(03)00400-3.
• Barrientos, S., Gereffi, G., Posthuma, A., Mayer, F., & Pickles, J. (2011a). Decent work in global production networks: framing the policy debate. International Labour Review, 150(3–4). doi: 10.1111/j.1564-913X.2011.00118.x.
• Barrientos, S., Gereffi, G., & Rossi, A. (2011b). Economic and social upgrading in global production networks: a new paradigm for a changing world. International Labour Review, 150(3–4). doi: 10.1111/j.1564-913X.2011. 00119.x.
• Barrientos, S. W. (2013). ‘Labour Chains’: analysing the role of labour contractors in global production networks. Journal of Development Studies, 49(8). doi: 10.1080/00220388.2013.780040.
• Bosmans, K., Hardonk, S., De Cuyper, N., & Vanroelen, C. (2016). Explaining the relation between precarious employment and mental well-being. A qualitative study among temporary agency workers. Work. A Journal of Prevention Assessment & Rehabilitation, 53(2). doi: 10.3233/WOR-152136.
• Burgoon, B., & Raess, D. (2009). Globalization and working time: working hours and flexibility in Germany. Politics & Society, 37(4). doi: 10.1177/0032329 209349224.
• Chan, M-K. (2013). Informal workers in global horticulture and commodities value chains: a review of literature. Women in Informal Employment: Globalizing and Organizing. WIEGO Working Paper, 28
• Dawson, C., Veliziotis, M., & Hopkins, B. (2017). Temporary employment, job satisfaction and subjective well-being. Economic and Industrial Democracy, 38(1). doi: 10.1177/0143831X14559781.
• Egger, H., Kreickemeier, U., & Wrona, J. (2015). Offshoring domestic jobs. Journal of International Economics, 97(1). doi: 10.1016/j.jinteco.2015.03.010.
• Esteban-Pretel, J., Nakajima, R., & Tanaka, R. (2011). Are contingent jobs dead ends or stepping stones to regular jobs? Evidence from a structural estimation. Labour Economics, 18. doi: 10.1016/j.labeco.2010.12.010.
• Foster-McGregor, N., Stehrer, R., & de Vries, G. J. (2013). Offshoring and the skill structure of labour demand. Review of World Economics, 149(4). doi: 10.1007/s10290-013-0163-4.
• Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer. Duke CGGC (Center on Globalization, Governance & Competitiveness).
• González-Díaz, B., & Gandoy, R. (2016). Offshoring and employment structure in the EU periphery: the case of Spain. Applied Economics, 48(14). doi: 10.1080/ 00036846.2015.1096007.
• Goos, M., Manning, A., & Salomons, A. (2009). Job polarization in Europe. American Economic Review, 99(2). doi: 10.1257/aer.99.2.58.
• Görg, H., & Görlich, D. (2015). Offshoring, wages and job security of temporary workers. Review of World Economics, 151(3). doi: 10.1007/s10290-015-0220-2.
• Hipp, L., Bernhardt, J., & Allmendinger, J. (2015). Institutions and the prevalence of nonstandard employment. Socio-Economic Review, 13(2). doi: 10.1093/ser/ mwv002.
• Ibsen, C. L., & Mailand, M. (2011). Striking a balance? Flexibility and security in collective bargaining. Economic and Industrial Democracy, 32(2). doi: 10.11 77/0143831X10371695.
• ILC (2011). General survey concerning social security instruments in light of the 2008 Declaration on Social Justice for a Fair Globalization: Social security and the rule of law. Geneva: International Labour Office.
• ILO (2016). Non-standard employment around the world: understanding challenges, shaping prospects. Geneva: International Labour Organization.
• IMF (2017). World Economic Outlook. Washington, DC: International Monetary Fund. doi: 10.1093/esr/jcn046.
• Kauhanen, M., & Nätti, J. (2014). Involuntary temporary and part-time work, job quality and well-being at work. Social Indicators Research, 120(3). doi: 10.1007/s11205-014-0617-7.
• Kim, H.-H., & Lee, H. (2015). Different types of liberalization and jobs in South Korean firms. Journal of East Asian Economic Integration, 19. doi: 10.11644/ kiep.jeai.2015.19.1.291.
• Kordalska, A., & Olczyk, M. (2018). CEE trade in services: value-added versus gross terms approaches. Eastern European Economics, 56(4). doi: 10.1080/00 128775.2018.1459194.
• Lakhani, T., Kuruvilla, S., & Avgar, A. (2013). From the firm to the network: global value chains and employment relations theory. British Journal of Industrial Relations, 51(3). doi: 10.1111/bjir.12015.
• Lee, H., & Lee, J. (2015). The impact of offshoring on temporary workers: evidence on wages from South Korea. Review of World Economics, 151(3). doi: 10.1007/s10290-015-0215-z.
• Murphy, E. C., & Oesch, D. (2017). Is employment polarisation inevitable? Occupational change in Ireland and Switzerland, 1970–2010. Work, Employment and Society. doi: 10.1177/0950017017738944.
• Perugini, C., & Pompei, F. (2017). Temporary jobs, institutions, and wage inequality within education groups in Central-Eastern Europe. World Development, 92. doi: 10.1016/j.worlddev.2016.11.009.
• Pietrobelli, C., & Rabelloti, R. (2006). Global value chains. In C. Pietrobelli & R. Rabelloti (Eds.). Up- grading to compete: global value chains, clusters, and SMEs in Latin America. Washington, DC: Inter-American Development Bank.
• Pirani, E., & Salvini, S. (2015). Is temporary employment damaging to health? A longitudinal study on Italian workers. Social Science and Medicine, 124. doi: 10.1016/j.socscimed.2014.11.033.
• Plank, L., Rossi, A., & Staritz, C. (2012). Workers and social upgrading in “fast fashion”: the case of the apparel industry in Morocco and Romania. Austrian Foundation for Development Research (ÖFSE). doi: 10.1007/s10273-011-1262-2.
• Posthuma, A. (2010). Beyond “regulatory enclaves”. Challenges and opportunities to promote decent work in global production networks. In A. Posthuma & D. Nathan (Eds.). Labour in global production networks in India. New Delhi: Oxford University Press.
• Presbitero, A. F., Richiardi, M. G., & Amighini, A. A. (2015). Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing. International Economics, 142. doi: 10.1016/j.inteco.2014.07.004.
• Prosser, T. (2016). Dualization or liberalization? Investigating precarious work in eight European countries. Work, Employment and Society, 30(6). doi: 10.1177/ 0950017015609036.
• Reichelt, M. (2014). Career progression from temporary employment: how bridge and trap functions differ by task complexity. European Sociological Review, 31(5). doi: 10.1093/esr/jcv055.
• Smith, A., & Pickles, J. (2015). Global value chains and business models in the central and eastern European clothing industry. In B. Galgóczi, J. Drahokoupil, & M. Bernaciak (Eds.). Foreign investment in eastern and southern Europe after 2008. Still a lever of growth? Brusse: ETUI.
• Szymczak, S., Parteka, A., & Wolszczak-Derlacz, J. (2019). Position in global value chains: the impact on wages in Central and Eastern European Countries, GUT FME Working Papers Series A, 53.
• Tanaka, A. (2017). Foreign direct investment and temporary workers in Japan. Journal of Asian Economics, 48. doi: 10.1016/j.asieco.2016.10.004.
• Taylor, M. P. (2006). Tell me why I don’t like mondays: investigating day of the week effects on job satisfaction and psychological well‐being. Journal of the Royal Statistical Society: Series A (Statistics in Society), 169(1). doi: 10.1111/j.1467-985x.2005.00376.x.
• Timmer, M. P., Los, B., Stehrer, R., & de Vries, G. J. (2013). Fragmentation, incomes and jobs: an analysis of European competitiveness. Economic Policy, 28(76). doi: 10.1111/1468-0327.12018.
• Timmer, M. P., Los, B., Stehrer, R., & de Vries, G. J. (2016). An anatomy of the global trade slowdown based on the WIOD 2016 release. GGDC Research Memorandum.
• Venn, D. (2009). Legislation, collective bargaining and enforcement: updating the OECD employment protection indicators. OECD Social, Employment and Migration Working Papers, 89. doi: 10.1787/223334316804.
• Wang, Z., Wei, S.-J., Yu, X., & Zhu, K. (2017). Characterizing global value chains: production length and upstreamness. NBER Working Papers, 23261.

Identifiers

DOI

10.24136/eq.2020.013

Biblioteka Nauki

22444421