Summary:
This article features an analysis of the effects of financial fluctuations on crossborder and resident workers in Luxembourg and Switzerland. Causality tests are performed using five variables: the number of cross-border workers, the number of resident workers, stock market indices, financial sector’s value added, and total value added. The results show that, in both countries, cross-border workers face a more volatile evolution and are more strongly and rapidly impacted by “financial instability” than resident workers. These results can be explained by the “cushioning” role of the labor supply (and more particularly of cross-border workers) vis-a-vis financial fluctuations, by labor market segmentation, and by the interrelations between the financial sector and the real economy.
SWITCH edu-ID
Administration
