Centre for Labour Market Research,

Aalborg University, Denmark (CARMA)

Flexicurity and

youth employment in Europe

Per Kongshøj Madsen

Centre for Labour Market Research (CARMA)

Aalborg University, Denmark

www.carma.aau.dk

Conference:

IS FLEXICURITY THE RIGHT MEDICINE FOR THE EUROPEAN YOUTH?

Copenhagen, January 10, 2012

CARMA

• Centre for Labour Market Research

• An interdisciplinary research centre at the Department

of Political Science, Aalborg University

• A staff of around 20

• Research topics: wage formation, industrial relations,

life-long learning and (comparative) labour market

policy

• Flexicurity-research

Overview

• Youth, the labour market and the

crisis

• The blend of flexibility and security:

flexicurity

• Is ”flexicurity in Danish” beneficial

to youth on the labour market?

• Which are the relevant flexicurity

policies for young peoble?

NEETs in the EU

The basics of flexicurity

• The starting point: Flexibility and security are

not contradictions, but can be mutually

supportive

The basics of flexicurity

• Why then all the fuss about flexicurity? – A new perspective on transitions and security

– Attractive to a wide range of political actors

• Against both common sense and mainstream

economic theory

• The two icons of flexicurity – Wilthagen matrix

– Danish golden triangle

The Wilthagen Matrix

Jobsecurity

(keeping your

job)

Income security

(unemployment

benefits)

Employment

security

(getting a new

job)

Combination

security

(work-life

balance)

Numerical

flexibility (hire

and fire)

Functional

flexibility

(between tasks)

Working time

flexibility

Wage flexibility

Source: T. Wilthagen & Tros (2004)

Examples of flexicurity policies

Putting countries in boxes

Jobsecurity Income

security

Employment

security

Combination

security

Numerical

flexibility (hire

and fire)

Denmark

(for decades)

Denmark

(since1990s)

Functional

flexibility

(between tasks)

Germany

Working time

flexibility Germany

(in times of

crisis)

Wage flexibility

The Danish Golden Triangle

Flexible

labour

market

Unemploy-

ment

insurance Active

LMP

The basic

Flexicurity

nexus

•Low job security

•High job-to-job mobility

•Rapid structural change

Income

security Employment

security

Educational

policy AND

MORE!.

30 %

20 % 10 %

Danish youth on the job

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Hungary

Greece

Italy

Slovakia

Spain

Belgium

Czech Republic

Poland

Portugal

France

Ireland

European Union (27 )

Slovenia

Sweden

Finland

Germany

United Kingdom

Norway

Austria

Denmark

Netherlands

2010

Employment rate

15-24 years

Percent of age group

Eurostat, LFS

Youth on the Danish labour market 1

• High employment rate – Reflects the general level of the employment

rate

– Cheap labour on a labour market with a tradition

for seniority wages

Youth on the Danish labour market 1

• High employment rate – Reflects the general level of employment

– Cheap labour on a labour market with a tradition

for seniority wages

– ALMP targeted at young persons (early

activation plus extra resources)

– Cultural values, tradition for economic og social

indepencence of the young

Leaving home

Chiuri & Boca, 2009

Leaving home

Chiuri & Boca, 2009

Youth on the Danish labour market 1

• High employment rate – Reflects the general level of employment

– Cheap labour on a labour market with a tradition

for seniority wages

– ALMP targeted at young persons (early

activation plus extra resources)

– Cultural values, tradition for economic og social

indepencence of the young

– A flexible labour market

The flexible Danish labour market

• Low level of employment protection of

insiders

• No seniority protection in dismissal

• A high level of job-to-job mobility and many

job openings

Less age segmentation on the labour market

Protection of ordinary employees 2008

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Portuga

l

Germ

any

Net

herla

nds

Swed

en

France

Finla

nd

Spain

Korea

Gre

ece

Nor

way

Austria

Poland

Belgiu

m Italy

Irela

nd

Den

mark

Uni

ted K

ingdom

Uni

ted S

tate

s

EP

L-in

dica

tor

Source:Venn, D. (2009), "Legislation, Collective Bargaining andEnforcement: Updating the OECD Employment

ProtectionIndicators", OECD Social, Employment and Migration Working Papers, No. 89, OECD publishing,

Job tenure

The Commission: Job Mobility in the European Union, 2008

A comparative analysis

• Comparing labour market mobility in the Nordic

countries and the Mediterranean countries

• Eurostat’s Labour Force Survey

• Looking at:

Employed

Inactive Unemployed

Source: Part of the GUSTO-project

financed by EU’s 7th framework

programme

From employment to

unemployment, 2008 To Unemployment Denmark *DK Finland *FI Norway *NO Sweden *SE Greece *GR Italy *IT Portugal *PT

Age

16-24 0,86 ns 1,33 ns 1,99 ns 2,14 2,01 2,33 1,66

25-34 0,96 ns 1,00 ns 1,71 ns 0,99 ns 1,73 1,84 1,53

35-44 1,10 ns 1,15 ns 1,17 ns 0,65 1,39 1,25 1,09 ns

55-63 1,78 1,72 1,26 ns 0,83 ns 0,80 0,86 1,46

45-54 (ref.) . . . . . . . . . . . . . .Gender

Male 0,69 0,85 ns 0,89 ns 1,03 ns 0,57 0,64 0,76

Female (ref.) . . . . . . . . . . . . . .

Marital status

Widowed, divorced, separated 1,33 ns 1,62 1,73 ns 1,10 ns 1,50 1,48 1,26

Single 2,24 1,85 2,64 1,73 1,77 1,49 1,31

Married . . . . . . . . . . . . . .

Education

Primary 1,53 2,96 4,55 1,98 1,81 1,66 1,66

Secondary 1,22 ns 1,84 2,20 1,88 1,36 1,10 1,15 ns

Tertiary (ref.) . . . . . . . . . . . . . .

Place of birth

Other EU 1,53 ns 1,06 ns 1,29 ns 0,78 ns 1,37 1,21 ns

Other 2,23 3,08 2,40 1,87 0,91 ns 1,31

Natives (ref) . . . . . . . . . . . .

Proffesional status

Self employed 0,60 0,19 0,39 0,68 ns 0,28 0,48 0,45

Employee (ref.) . . . . . . . . . . . . . .

Industry

Aggriculture, hunting, forestry, fishing and mining 1,05 ns 1,13 ns 1,86 ns 0,21 0,77 1,07 ns 1,30

Construction and supply 0,71 ns 1,24 ns 1,00 ns 1,04 ns 0,60 1,54 0,92 ns

Wholesale and retail trade 0,80 ns 0,81 ns 0,85 ns 0,72 ns 0,78 1,00 ns 0,69

Hotels and restaurants 2,05 1,23 ns 1,37 ns 1,04 ns 1,36 1,82 1,20

Transport, storage and communication 0,57 0,66 1,04 ns 0,66 ns 0,82 ns 0,91 ns 0,71

Finance, real estate, renting and business 0,65 1,29 ns 1,53 ns 1,31 ns 0,66 0,85 0,72

Education, Public administration and defence 0,60 0,83 ns 0,71 ns 0,78 0,44 0,37 0,40

Health and social work 0,66 0,84 ns 0,47 0,42 0,41 0,48 0,39

Other social and personal services 0,93 ns 1,97 0,92 ns 0,91 ns 0,88 1,15 0,69

Manufaturing (ref.) . . . . . . .

Observations from

multivariate analysis I

• E -> U: Age does not matter in the North, but in

the South (In North a labour market less

segmented by age (tenure) and the dominance

of temporary work for young persons in the

South)

• E -> I: Age matters in the North, but not in the

South (In the North young persons are more

likely to combine work and study; they also

become economically independent at a

younger age)

Observations from

multivariate analysis II

• U -> E: Higher odds for young people in all

countries (Once unemployed older workers

have a disadvantage)

• U -> I: Higher odds for young people in the

North than in the South (Unemployed youth

moving into education, also as a part of ALMP)

Observations from

multivariate analysis III

• I -> U: Very high odds in the South, but also in

DK and N (Difficult transitions from school to

work)

• I -> E: No clear pattern. S an extreme case.

Flexicurity policies for young persons

• Support labour market mobility in

general – thus creating more job

openings also for the young

– Economic growth!

– Golden triangle can give some inspiration to

lower the fences …

Flexicurity policies for young persons

• Support critical transitions for young

persons – A flexible educational system (without blind alleys)

– Monitoring and counselling of young persons from

secondary school to vocational and further

education

– Traineeships integrated into education (formal or

informal)

– Early intervention in case of unemployment

(reducing scar-effects)