barbier cnrs université paris 1 panthéon sorbonne ces matisse 1 flexicurity and transitional...

Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

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Flexicurity and transitional labour markets

Jean-Claude BarbierCNRS Université Paris1Centre d’économie de la Sorbonne

[email protected]

International seminar Cicero Foundation, 11-12 October, 2007, Paris


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Outline

I – ‘Transitional labour markets’ and ‘flexicurity’:

* concepts * marrying them? II - Actual ‘flexicurity’ versus putative

strategies and the political debate: the Danish and Dutch systems compared

III – Where does the gist of flexicurity lie?


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TLM and Flexicurity (1 -concepts) TLM original assumptions (Günther Schmid

and Peter Auer): the theory A) full employment is still possible B) transitions (from various statuses on the

labour market) are not (equally) secured C) in order for people to take (new) risks,

transitions should be secured collectively D) this entails a mix of socialised and

market insured risks


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TLM and Flexicurity (2 -concepts) Flexicurity, the broad view: A balance between demands for

labour/employment flexibility and claims for income/wage security

Too often implicit: the ‘balance’ is not a ‘mechanism’ nor an automatic ‘trade-off’

Real actors and real values, real politics


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Marrying TLM and ‘flexicurity’

Not an easy task: TLM theory entails sharing a (strong)

normative perspective


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Transitional labour markets

Günther Schmid’s four criteria of « good » transitions:

Freedom/autonomy Solidarity Effectiveness Efficiency


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Specification: labour market/social protection risks and rights

Freedom/autonomy

Solidarity

Effectiveness

Efficiency

(risks, rights) Balance society/individual = reciprocal engagement

High socialisation of risks/services/

redistribution

Quality full employment, quality services

cost containment, good public management


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Marrying TLM and ‘flexicurity’?

A marriage entails the clarification of certain things

Can flexicurity match TLM basic values (principles) ?


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Flexicurity = a polysemous notion

Flexicurity as a system of social arrangements (complementarities) that produce a balance [1]

Flexicurity as a strategy [2]

Flexicurity as apolitical slogan


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Flexicurity as a system [1]

Yielding a balance Identifying the balance: a sociological

task

=> identifying national cases: Denmark and the Netherlands


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Identifying ‘flexicurity’: the inductive way

- the Netherlands, Wet Flexibiliteit en Sekerheid – 1999

- Denmark with the successive Rasmussen 1 (1993-2001) and Rasmussen 2 (2002-now) governments


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Danish and Dutch definitions (1) The canonical academic definition is

by T. Wilthagen (and colleagues): « a degree of job, employment, income and

combination security that facilitates the labour market careers and biographies of workers with a relatively weak position and allows for enduring and high quality labour market participation and social inclusion, while at the same time providing a degree of numerical (both external and internal), functionaland wage flexibility that allows for labour markets’ (and individual companies’) timely and adequate adjustment to changing conditions in order to maintain and enhance competitiveness and productivity » [quoted in Employment in Europe 2006, p. 77]


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Danish and Dutch definitions (2) The canonical definition is by Per Kongshøj

Madsen (and colleagues) => ‘golden triangle’ [relatively loose

legislation on employment protection + generous social safety net for the unemployed + high (intensity) spending on ALMP]

[quoted from EiE, 2006, p. 78]

Peculiarities: other factors outside the ‘triangle’ play a role: history, macroeconomic policy

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The ambiguous definition of ‘employment protection’ [Labour Law] (OECD 2004)


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An evolving/elusive notion

Spotting differences in definitions

Flexicurity, Joint employment report, 2007 (EU)

Flexicurity should ease the transitions between different stages of working life. The internal and external components of flexicurity should mutually reinforce one another, so that at the same time the modernisation of labour law, investment in training and active labour markets, and the provision of adequate social protection and income security can take place in a context of modern work organisation. Flexicurity should also be conducive to addressing precariousness, reducing segmentation on the labour market, and combating undeclared work. The social partners have an important role to play here.


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The EU Commission’s recent definition

The Commission’s background document [20/4/07]

Flexible contractual arrangements (both from the perspective of the employer

and the employee) through modern labour laws and work organisations;

Active Labour Market Policies (ALMP) which effectively help people to cope

with rapid change, unemployment spells and transitions to new jobs;

Reliable and responsive lifelong learning (LLL) systems to ensure the continual adaptability and employability of workers;

Modern Social Security systems which provide adequate income support and

facilitate labour market mobility. This includes provisions that help people

combine work with private and family responsibilities, such as childcare.


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More..

The definition of the expert group’s interim report

Almost identical + fifth element

« it is important to add, as a kind of process variable: supportive and productive social dialogue »


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=>>Diversity of definitions

Diversity is here to stay in member states

The confusion between flexicurity as a system [1] and as a strategy [2]

=> leads to controversy


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A somehow contentious notion: political debate

Under an apparent consensus (2007 sample):- F. Müntefering: « ein Symbol » + « ein unechtes

Wort » [leichte Lösung, die es aber nicht gibt]- John Monks, ETUC (Sevilla) [au plan européen, cela

devient un menu à la carte]- Business Europe, de Buck [from a job preservation

mindset into a job creation mindset]- Polish economists [choosing the ‘American model?’

M.-J Radło, Warsaw]- Etc… Reluctance in certain ‘stakeholder’ groups


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The potential ‘fit’ between TLM and « flexicurity »

Two key elements at stake - strategies for ‘activating’ social

protection [Enhancing, Introducing systematic links between social protection and employment (labour force participation)]

- strategies for fostering the quality of jobs and preventing/decreasing segmentation and inequality


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A trade-off? Who trades what with whom?

Individual actors: interests, choices Collective actors: interests, choices,

etc. Macro-meso-micro dimensions Who benefits from what security (what

social protection)? Who benefits from what flexibility (not

only employment/labour flexibility?)


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Schmidt’s principles?

Freedom/autonomy

Solidarity

Effectiveness

Efficiency

Sociological in-depth understanding of the social arrangements


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Legitimacy of social arrangements (1)

The ‘Danish arrangement’ Universalistic approach (quality jobs) The weaker are protected Male-female difference is low long duration of unemployment

insurance Consistent « welfare reform » => mobility is high, secure and eased


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Flexibility, hire and fire

‘activating’ policiesGenerous

social protection

The « Golden triangle » and

its social conditions

Labour market: the ‘Golden triangle’

Social con-ditions

Norms, values

IR system

‘Forlig’, 1899, 1933,…


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Legitimacy of social arrangements (2)

The ‘Dutch arrangement’ Flexibility of working time Labour ‘sharing’/Women labour market

participation (lower) Social protection: Equal security for atypical

to typical (quality) Various welfare reforms Mobility and various types of flexible

employment


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Empirical commonalities

Social partners Negotiation Systemic consistency Public support = legitimacy

Consistent outcome= overall quality employment


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The French experience [‘imitating Denmark’ 2005-2006] Fragmentation of employment contracts Innovation 2005: a new contract for

small firms (Contrat nouvelle embauche – CNE) without employment protection in the first year

Innovation 2006: a similar one for the young

Inexistent negotiation => protest 2007: new reforms looming


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The gist of flexicurity

Flexicurity as a portemanteau concept controversial notion and not only easy

tradeoffs Systemic consistency Public support linked to negotiation Transitional labour market principles are

consistent with the Dutch and the Danish arrangements

Not with many others (ex: the French system as we know it)


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Appendix


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Benefits and employment: some lessons

15-64 OCDE (1999)

ER FTE B NoB/noE total

F 55.5 24.2 20.4 100

D 58.9 22.4 18.8 100

Dk 69.7 23.1 7.2 100

UK 60.7 18.9 20.4 100

USA 67.0 13.7 19.3 100


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Dimensions of social citizenshipand the TLM criteria TLM CRITERIA Freedom/autonomy

Solidarity

Effectiveness Efficiency

SOCIAL CITIZENSHIP Freedom of choice.

Participation to the formulation of programmes

Equality: ages/genders/statuses

_____________________

Generosity/duration of benefits; sanctions and conditionality

Quality full employment, quality of services


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Two recent (unfinished) French reforms Unemployment insurance

(PARE) (2001 =>)

Freedom/Solidarity Freedom of choice Participation Equality

Effectiveness/efficiency Generosity/Sanctions Quality (full

employment/services)

Resources not sufficient?

Large social debate Unequal access

Generosity improved/sanctions also

Is there an offer of quality services?

Underemployment/seg-mentation

=> Next?


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Two recent (unfinished) French reformsRMI reform (on-going)

Freedom/Solidarity Freedom of choice Participation Equality

Effectiveness/efficiency Generosity/Sanctions Quality (full

employment/services

Access to services de facto limited

Limited social debate Persisting inequalities:

the division between insured and « assisted »

Unequal access to services and to mainstream unemployment/ sanctions low

=> next?


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Activation’s legacy

=>Activation is not entirely new: ‘old activation’

The Swedish legacy : the ‘50s: labour market policies => Gøsta Rehn’s concept

Programmes across Europe and the USA: from the ‘70s

‘workfare’ (USA, from the early seventies) ‘Insertion’ (France, from 1975) ‘Aktivering’ (Denmark, 1992-94) The ‘New Deals’ in the UK (from 1997)

Activation of social protection:two ‘Beveridgean’ ideal-types

Liberal Universalistic

The « problem » (Major): targeted assistance caseloads (low flat rate benefits)

(Minor): work ethic:

(generous benefits for all)

Rules/Values Self-reliance:Versus ‘Dependency’

Market

Balance individual-society

Market and state

Solutions Incentives+sanctions

underemployment

Activation Contract /full employment

Programmes Welfare to work services+ tax credits

Services+updated benefits

Activation and existing restructuring reforms: a sketch

Restructuring

and activation

Re-com. Cost-cont. Recal. Problems

Participation to the lab. Market/work incentives

Control expenditure for working-age

New ideas, programmes, adapt to societal demands

Dk Flere i Arbejd

EfterlønAktiveringPES

Updating, work ethics/ +cost

UK Tax credits

WTW

Sickness Benefits PES Re-com (incentives)

+ cost

Germany Mini- Midi-Jobs/

Kombilohn

Early retirement Hartz IV, BAA (H III)

Fragmentation, low employment creation

France PPE, minimum incomes reform

Early retirement PES, PARE, insertion

Funding reform (social cont.)

Fragmentation, low employment creation

barbier cnrs université paris 1 panthéon sorbonne ces matisse 1 flexicurity and transitional...

Documents

panthon sorbonne ces

concepts flexicurity

eu flexicurity

actual flexicurity

gist of flexicurity

definitions slide

netherlands slide

polysemous notion flexicurity