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VAM-Velferd, arbeid og migrasjon

EU labor immigration and the organization of work

Alternative title: Arbeidsinnvandring fra EU og organisering av arbeid

Awarded: NOK 12.0 mill.

Project Manager:

Project Number:

334266

Application Type:

Project Period:

2023 - 2027

Funding received from:

Partner countries:

The EU enlargement to Eastern European countries in 2004 was the start of a large growth in low-wage labor immigration into Norway. Labor immigration has contributed to high activity and production in important sectors like the oil sector, manufacturing and building and construction, but has also led to worry of increased wage inequality in the Norwegian labor market and problems with social dumping of immigrant workers. Parallel to these developments, there is a major reorganization of work in all OECD countries, with increased fragmentation of work through increasing use of domestic outsourcing and alternative work arrangements (OECD Employment Outlook 2021). We connect these major trends in the labor market and investigate the impact of labor immigration on firms’ use of domestic outsourcing and alternative work arrangements. Because the legal framework that concerns equal pay and equal work conditions is different for different work-arrangements like direct hirings, subcontracting, temporary agency work etc., there are economic incentives for firms to use the employment form that allows them to reduce costs the most. Key questions in the project are: How much does the supply of labor from low-wage EU countries affect domestic work-organization? How important is the growth in alternative work arrangements for the growing between-firm wage inequality and the growing inequality between different groups of workers? Does the supply of low-wage workers also affect our long-term skill-composition? Have we made ourselves dependent on labor market immigration to fill important jobs in the future? What are the possibilities to regulate labor markets to protect immigrants and native workers from some of the negative side effects of EU integration within EU- and EEA-law? How efficient is current policy in reducing the incentives for domestic outsourcing and promoting the skilling of workers?

The first part of the project analyses empirically how labor immigration affects labor market inequality through changes in the way firms organize work. First, we study how the increased immigration, following the eastward EU enlargement in 2004 affected Norwegian firms’ use of domestic outsourcing and alternative work arrangements. Second, we investigate if such (eventual) changes in the organization of work within and between firms have increased labor market inequalities, i.e., induced larger differences between groups of workers both when it comes to wage and work protection. Third, we investigate how higher availability of low-wage immigrant workers affects the firm’s investments in training own workers and by that Norway’s long-term dependency on labor immigrants to fill certain jobs. Finally, we analyze the impact of a large global shock (the Covid pandemic) that dramatically reduced labour migration, and potentially reversed some of the results for both outsourcing and human capital investments. The second part of the project analyses legally and empirically the possibilities of regulation when low-wage labor immigration changes the organization of work and labor market inequality. We will explore how rights to equal pay for equal work extends to different kinds of workers, and the possibilities that governments have of pursuing the goal of equal pay. We will also explore the boundary of rights that apply to labor immigrants depending on their labor market attachment form and as citizens of the European Economic Area. We will evaluate some of the regulation that is already in place in empirical analyses, to see if they are effective in preventing some of the negative effects of low-wage labor immigration on the organization of work. They represent two ways of targeting inequalities; one is to implement rules that apply to whole business areas, regardless of employment form, the other is to target alternative work arrangements in particular.

Publications from Cristin

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Funding scheme:

VAM-Velferd, arbeid og migrasjon