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[Vol.25 No.3] The Impact of Dual Labor Markets on Labor Productivity: Evidence from the OECD

Group :
Economic Research Institute (02-759-5318) 2019.09.30 4583

Author :  Koansung Choi(Hanyang Univ.), Jieun Lee(BOK), Chung Choe(Hanyang Univ.)


This paper examines the impact of a dual labor market structure on labor productivity using unbalanced panel data from 29 OECD member countries between 1990 and 2015. By applying a variety of regression models on the panel data (e.g., a pooled regression, a fixed effects model and a GMM), we explore how changes in worker-type composition among temporary, permanent and self-employed workers contribute to productivity growth. While it appears that our results differ slightly, depending on the econometric models, overall an increase in the share of permanent workers leads to a relatively higher increase in productivity growth. On the other hand, it is also seen that the effects of the share of temporary workers on labor productivity are considerably lower than that of permanent and self-employed workers. To sum it up, our findings indicate that an increase in temporary workers could have an adverse effect on labor productivity.