How do tourism investments affect each pillar of decent work? Evidence from European Union countries

The travel and tourism industry is a major driver of employment, particularly for vulnerable groups. However, despite its positive contributions, the sector still faces deficits in decent work conditions and persistent concerns regarding occupational safety and health standards. Addressing these challenges requires strategic, well-regulated investment in tourism, which can catalyze economic development, promote fair labor standards, and ensure safe working environments over the long term. These dynamics were investigated using four-panel autoregressive distributed lag models for 15 European Union countries from 2002 to 2019 to assess the effects of capital investment in travel and tourism and the direct contribution of tourism to employment on each pillar of decent work, both in the short- and long-run. More specifically, this analysis comprised four distinct models: Model I examines the influence on job creation, Model II assesses the impact on social protection, Model III investigates the effects on workers’ rights, and Model IV explores the implications for social dialogue. The main results reveal that capital investment in tourism positively affects job creation in the short and long run as well as social protection and rights at work (in the long run). In contrast, tourism capital investment seems to affect social dialogue adversely. Regarding the direct contribution of tourism to employment, it positively impacts job creation and rights at work while exerting a negative influence on social protection and social dialogue, but only in the long run. The panel Granger non-causality method confirms a relationship between tourism-related indicators and each pillar of decent work.