Understanding labour hoarding A case study of Swedish firms keeping un-needed labour

Abstract

This thesis investigates the phenomena of labour hoarding in European countries. Labour hoarding is the retention of surplus employees and/or labour force during economic downturns and while it can stabilise labour demand, it can also lead to inefficiencies and increased labour costs. Using a GLS-regression analysis, the study examines the influence of economic variables (GDP, inflation) and Hofstede's cultural dimensions on labour hoarding practices across European member states. Findings indicate that inflation positively correlates with both labour productivity per person employed (LPP) and per hour worked (LPH), while the chosen GDP-variable is not significant. The inclusion of cultural variables, especially indulgence, enhances the model's explanatory power. Higher indulgence levels are associated with increased labour hoarding, as countries adjust working hours instead of reducing staff. The research offers valuable insights for policymakers to improve productivity and economic resilience in European countries.