Labor market duality refers to the coexistence of temporary workers with low dismissal costs and permanent workers with high dismissal costs within the same firms. The prevalence of temporary employment is a common feature in several countries, such as Continental European countries. Further, since the 1980s, the Japanese labor market has been experiencing a substantial increase in temporary jobs. The quality of temporary jobs tends to be lower than that of permanent jobs (e.g., the former includes lesser job security, lower wages, and fewer training opportunities compared to the latter). For this reason, the causes and consequences of widespread temporary employment have both policy and academic implications. To date, most of the research on this topic has focused on the supply side of labor markets (demographic changes in workforce), macroeconomic impacts (business cycles), and labor-market institutions. However, since the majority of temporary workers tends to be involuntary, the demand-side analysis is important, as well. It has rarely been examined how market competition would affect firms’ demand for temporary and permanent labor, particularly within the context of economic globalization.

Our study attempts to fill this gap. By proposing a heterogeneous-firm trade model with a dual labor market, we examine the relations between the demand for temporary and permanent workers and economic globalization. Our model highlights intensified product market competition as a driving force behind the shift in demand from permanent to temporary workers. In addition, our model demonstrates that international outsourcing effectively reduces labor adjustment costs, which decreases the demand for permanent workers. Using industry-level data from the Japanese manufacturing sector, we empirically test the relations between the demand for temporary and permanent workers and economic globalization and find that they support most of our theoretical predictions.

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Abstract: In 1992, the United States stood at the pinnacle of world power and Americans were confident that a new era of peace and prosperity was at hand. Twenty-five years later, those hopes have been dashed. Relations with Russia and China have soured, the European Union is wobbling, democracy is in retreat, and the United States is stuck in costly and pointless wars.

The root of this dismal record is the foreign policy elite’s stubborn commitment to a strategy of “liberal hegemony.” Since the end of the Cold War, Republicans and Democrats alike have tried to use U.S. power to spread democracy, and other liberal values around the world. This strategy was doomed to fail, but its proponents elite were never held accountable and kept repeating the same mistakes. 

Donald Trump won the presidency promising to end these misguided policies, but his erratic style of governing and flawed grasp of world politics have made a bad situation worse. The best alternative is a return to a strategy of “offshore balancing,” eschewing regime change, nation-building, and other forms of global social engineering.  This long-overdue shift will require creating a foreign policy elite with a more realistic view of American power. 

Speaker Bio: Stephen M. Walt is Robert and Renée Belfer Professor of International Affairs at the Harvard Kennedy School. He is a contributing editor at Foreign Policy, co-editor of the Cornell Studies in Security Affairs, and was elected a Fellow of the American Academy of Arts and Sciences in May 200.  He received the ISA’s Distinguished Senior Scholar award in 2014.  His writings include The Origins of Alliances (1987) Revolution and War (1996), Taming American Power: The Global Response to U.S. Primacy, and The Israel Lobby and U.S. Foreign Policy (co-authored with John J. Mearsheimer, 2007).  His latest book is The Hell of Good Intentions: America’s Foreign Policy Elite and the Decline of U.S. Primacy (2018).

With the looming great power competitions, Dr. Huang will discuss the concept of “free and open Indo-Pacific,” China’s rapid expansion of economic and military sphere of influence, and a critical examination of Xi Jinping’s “Chinese Dream” agenda from Taiwan’s perspectives. He will then inform and explain Taiwan’s current national security strategy, defense policy and the military modernization directions. Lastly, Dr. Huang will address current issues across the Taiwan Strait and the prospect of presidential elections in 2020.

SPEAKER:
Dr. Alexander C. Huang, Senior Associate (Non-resident), Freeman Chair in China Studies, Center for Strategic and International Studies

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BIO:
Alexander Chieh-cheng Huang is a professor and has been director of the Institute of Strategic Studies and the Institute of American Studies at Tamkang University, Taiwan. He is also a senior associate at CSIS with the Freeman Chair in China Studies. Dr. Huang previously served in the Taiwan government as deputy minister of the Mainland Affairs Council and has worked closely with consecutive governments on foreign and security policy matters. He spent nearly 15 years in the United States before moving back to Taiwan in 2000. He was a senior fellow in the International Security Program at CSIS (1999–2000) and a visiting fellow in the Center for Northeast Asian Policy Studies at the Brookings Institution (1998–1999). In addition, he taught Chinese foreign policy and U.S. security policy at the University of Maryland at College Park (1998–2000). Between 1993 and 1998, he was a senior consultant on political and security affairs for the Taipei Economic and Cultural Representative Office in Washington, D.C. 

From Within and Without: Taiwan’s New Security Challenges

Since 2016, Beijing’s pressure campaign on Taiwan has threatened the island’s international space and domestic tranquility. Few, if any, areas of politics have gone untouched. Whether through attempts to pick off Taiwan’s diplomatic partners or lure away the island’s talent, the full range of PRC statecraft is on display. Taiwan’s political dynamics — especially the solidification of Taiwanese identity and collapse of the Kuomintang — also appear to have driven an aggressive shift in Beijing’s approach to political influence operations to include pressure on international companies. The shift in intensity and tactics raises important questions about Taiwan’s future and dealing with an increasingly powerful PRC.

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