Flexicurity and upward transitions: The magic bullet? - Per Kongshøj Madsen Centre for Labour Market Research (CARMA) Aalborg University ...
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Flexicurity and upward transitions:
The magic bullet?
Per Kongshøj Madsen
Centre for Labour Market Research (CARMA)
Aalborg University
www.carma.aau.dk
Flexicurity to the Benefit of Workers
Making Transitions Pay
Presidency Conference
4 & 5 October 2010
The mission How can all the different elements be integrated and re-inforce the flexicurity agenda?
How can all the different elements be integrated and re-inforce the flexicurity agenda ?
Overview
• The basic case for flexicurity
• Learning flexicurity?
• Barriers for flexicurity policies
• Flexicurity in times of crisis
• How can the barriers be
overcome – any good examples
out there?
The basic arguments for flexicurity • Security promotes mobility – and vice versa!
Works better with a safety net?
Do I dare?
Works better with a safety net!
Do I dare?
To a better job
To life-long learning
To caring for the
family
The basic arguments for flexicurity
• Security promotes mobility – and
vice versa!
• Workers also ask for flexibility and
employers for security
• Win-win situations can be identified
– Examples at micro level (e.g. working time flexibility
and job security)
– The Danish ”golden triangle”
The full menu
The Danish flexicurity model Source: Employment in Europe 2006, chapter 2
The basic arguments for flexicurity
• But also risks of vicious circles
(Schmid, 2009):
– Job insecurity may lower aggregate demand
– High job-to-job mobility may lower investment in
human-capitalParticipation i LLL 2007
Participation i LLL 2007
The basic arguments for flexicurity • Flexicurity and transitions –Evidence from the EU –The Nordic countries
Transition rates in Europe European Commission: Employment in Europe 2009
Transition rates in Europe European Commission: Employment in Europe 2009
Fast in – fast out Source: Berglund et al: Labour Market Mobility in Nordic Welfare States, TemaNord 2010:515 (www.nmr.dk)
And other dimensions of mobility
Long-term unemployment
LTU, 2010, 1st quarter
Source: EurostatThe outcome of flexicurity
• Flexicurity arrangements can be important
components in achieving a high level of
“institutional competitiveness”
– Flexible labour markets facilitates adaptation to changing market
conditions and globalisation
– More positive climate for active policies to support reconstruction
– “Don’t protect jobs – protect mobility”
• => Link to Lisbon Strategy and EU2020
• But not a magic bullet towards any
economic crisisLearning flexicurity? • Many options for flexicurity arrangements – more than just copying one national model or strategy • Transplantation is not possible –one size will not fit all
Conditions for transferability • Economic vulnerability exemplified by presence or absence of economic crisis – but a double edged sword, since an economic also implies lack of resources for funding flexicurity arrangements • Political institutional capacity, which is inherent in the principal policy actor’s ability to impose or negotiate change Vivien Schmidt, 2002
And more conditions … • Policy legacies and preferences, which determine the “fit” of potential policies with long-standing policies and institutions and with existing preferences • Mutual trust between the social partners and the government Vivien Schmidt, 2002
Good flexicurity practices?
• Overarching principles
• Specific checklist
• Best practices (the
toolbox..)
Madsen, PK. (2007). ' Flexicurity - Towards a Set of Common Principles?.'
International Journal of Comparative Labour Law and Industrial Relations 23(4)
s. 525-542.#1: Policy content • Principle of integrating flexibility and security: Does the policy provide both flexibility and security for the same group(s)?
Checklist #1 1. Are both the flexicurity and security elements of the strategy well defined with respect to the concrete arrangements and the instruments involved? 2. Is the interaction between the flexibility and the security elements unambiguous with respect to trade-off(s), positive interactions and vicious circles? 3. Are the distributional aspects of the strategy uncovered? 4. Are mechanisms of compensation for potential gains and losses for different groups included in the design of the strategy
#2: The political process • Principle of negotiated trade-offs: Is the policy designed and implemented through a transparent political process involving all relevant stakeholders?
Checklist #2 1. Are all relevant stakeholders (including those at the local level) taking part in the process? 2. Is the process transparent with respect to the distribution of gains and losses from the strategy? 3. Does the process involve political guarantees that ensure the implementation of the strategy over time? 4. Does the strategy mobilize and link resources from different actors?
#3: Policy outcome • Principle of sustainable employment and social cohesion: Does the policy lead to an increase in overall competitiveness and desirable changes with respect to social cohesion
Checklist #3 1. Are ex-ante policy evaluations made and monitoring activities established, which uncover long-term and societal consequences of the strategy as a whole, including its effect on institutional competitiveness? 2. How will the strategy affect the employment options (labour market transitions) and the quality of work for all groups on the labour market? 3. How will the strategy effect the distribution of welfare and living conditions in general 4. Will the strategy empower weak groups to cope with their situation both as individuals and in cooperation with others?
Barriers for flexicurity policies • Uneven distribution of gains and losses between groups – Flexploitation?
Fighting ”flexploitation”
Fighting ”flexploitation”
Barriers for flexicurity policies • Uneven distribution of gains and losses between groups – Flexploitation? • Uneven distribution of gains and losses over time
The importance of timing
Trade unions accept Love and peace
less job security in installed
exchange for…?
More dynamic labour Win-win-situation
market creates more jobs becomes commonly
acknowledgedThe importance of timing
Trade unions accept Love and peace
less job security in installed
exchange for…?
More dynamic labour Win-win-situation
market creates more jobs becomes commonly
acknowledged
Critical elements:
• Realism of causal interrelation between job (in)security and job creation
• Security arrangements (especially in the transition period) provided by
employers and Government
• Changes in the political discourseBarriers for flexicurity policies • Uneven distribution of gains and losses between groups – Flexploitation? • Uneven distribution of gains and losses over time • Requires: – Resources for redistribution – Trust – also intertemporal trust!
Flexicurity in times of crisis • Job losses make workers cling to job security
The fall in employment The decline in employment from national peak til 2009Q4. Source OECD LFS-data
Flexicurity in times of crisis • Job losses make workers cling to job security • Public deficits limits the public resources for redistribution • More uncertainty and diminishing trust • Problems also for model countries
The leader of the pack Source: Eurostat
Is loosing steam! Source: Eurostat
Any magic bullets?
Any magic bullets? • Flexicurity is no magic bullet against an economic crisis! • The revised Wilthagen matrix – in times of crisis • Examples from the conference
Flexicurity policies and the crisis
Job security Employment Income security Combination
security security (care
and work)
Numerical Temporary Worker pools Use of benefits as Mortgage support
flexibility placement in wage subsidy
(hiring and other firm or educational
firing) support
Working-time Shorter working Joint employership Part-time UB, Leave schemes
flexibility hours, Reduced working
Work-time hours
accounts
Functional Job rotation Internships in other Retraining for new Accreditation of
flexibility firms, job prior learning
(between job retraining
functions)
Wage flexibility Adjustment of Supplement wage Extra UB as Increased family
(variable pay) wages in new job compensation allowance
Source: Adapted from presentation by Ton Wilthagen at the conference on "Implementing flexicurity in times of crisis",
Prague, March 25, 2009What did we learn in Ghent? • Quality of work – also remember targets and transitions – and the complexity of a multidimensional concept! • Making transitions pay – for whom and by whom? • The political economy of indicators… and of flexicurity • The scope for development of practical tools to promote good transitions (Finland)
What did we learn in Ghent? • Importance of LLL and vocational education • The option of training rights – a road to more equal access to LLL? (France) • Neither job-focused activation or social protection act as efficient instruments for overcoming poverty and labour market segmentation • Different strategies for supporting transitions to better jobs
So there is still a lot to think about
Thank you for your attention!
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