Labor Market (De)Regulation and Wage-Setting Institutions in Mediterranean Capitalism

Abstract

This chapter gives an overview of the main characteristics of the Mediterranean model of capitalism when it comes to labor market regulation and industrial relations institutions in Southern Europe. It focuses on reform dynamics and their underlying political economy. The discussion underscores that the transformations which have taken place since the 1980s in the labor market and industrial relations regulatory models of Southern European countries are the result of a common impetus for liberalization arising from the twin processes of neoliberal economic globalization and European integration. The chapter traces the main changes that have occurred since the start of the twenty-first century in state regulation, with a focus on employment protection legislation and wage-setting institutions. It also explores the political economy of reforms, explaining both commonalities and differences across Portugal, Spain, Italy, and Greece.