Flexicurity – a European Approach to Labour Market Policy

Although linguistically somewhat strange, “flexicurity”, the combination of labour market flexibility and security for employees, has become a much praised cornerstone of European labour market policies. Obviously, in an environment with rapid technical progress and frequently changing market conditions, employers need to manage their labour force flexibly. In order to achieve this flexibility without creating an unbearable situation for employees, security is the second pillar of the concept. Security refers, however, to “employability” rather than safety from dismissal. As such, the concept looks like an innovative European way of consolidating economic and social interests, although some argue that much flexibility is gained while the security aspect is being neglected. The concept has been successfully adopted in some European countries, notably Denmark and the Netherlands. However, each country has to find its own concept of “flexicurity” using a distinct combination of instruments that fit the national institutional, social and civic context.     

Labour market characteristics and surviving import shocks

This paper investigates whether different labour market characteristics amplify or dampen the local labour market impacts from Chinese import competition exposure. I exploit state‐level variation in initial, pre‐shock labour market characteristics and regional variation across local labour markets in exposure to Chinese imports for identification. I find that local labour markets in states with higher union density experience more severe adverse consequences as a result of increased import exposure. Conversely, higher initial minimum wages help mute the negative impacts of the China shock. I also provide some evidence that exceptions to employment‐at‐will legislation can affect employment responses to increased Chinese imports. Finally, examining all policies together in an index, I show that higher levels of policies intended to benefit and protect workers can actually magnify the extent of the damage inflicted by import competition. My results suggest that initial labour market characteristics and policies can play an important role in understanding why local labour markets react differently to trade shocks.     

GROWTH POLICY IN THE SPIRIT OF STEINDL AND KALECKI

There are large differences between Steindl’s ideas on growth policies and the Brussels/Paris consensus. Steindl called for innovation and education policies, whereas the mainstream today rather favours deregulation and privatization. Steindl stressed the positive demand‐side effects of the public sector and the contribution of lower household savings and anticyclical policies to growth. The economic mainstream praises the efficiency effects of a declining public sector, the importance of high savings for investment and warns of active anticyclical policies being an impediment to budget consolidation. Steindl and the Keynesians regarded the labour market situation as a consequence of economic growth. Today many economists see low growth as a result of labour market rigidities.     

THE EFFECTS OF LABOUR MARKET FLEXIBILITY IN THE MONETARY THEORY OF PRODUCTION

The aim of the present work is to study the effects of labour market flexibility on aggregate demand, productivity and employment within the theoretical framework of the Monetary Theory of Production. It is shown that labour market flexibility may not produce unidirectional effects on aggregate demand, productivity and employment, the working of the monetary market being decisive in establishing their levels.     

Globalization,labour market deregulation and trade unions in Singapore

This contribution examines recent trends in globalization and their effects on the labour market in Singapore. It discusses the responses of the government and the trade union movement to the challenges of globalization, and concludes by looking at the changing role of the trade union movement in Singapore. Citing government policies in dealing with the recent economic crisis, the article highlights the ‘managed flexibility’ approach of the government. We find that the trade union movement has gained considerably in stature and influence in providing training for the workers and helping them cope with retrenchment and the recession.     

Taxes and the time allocation patterns of married women with children: cross-cultural comparisons between the United States and Canada

It is widely recognized in the family economics literature that the structure of an income tax system affects labour supply. This paper examines and contrasts the effects of U.S. and Canadian tax policies on one particular group: married women with children. Using a household production model of time allocation, it is initially argued that U. S. tax policies promote market work for this group, while Canadian tax policies discourage market work for similar women. What is found is that Canadian women display weaker labour force attachment than American women and they spend more time in home production activities. These effects are consistent with initial predictions.     

Gender and Inequality: Austerity and Alternatives

Gender equality policies aim to increase women’s participation in the market economy, but they do not always recognise that market societies reproduce inequalities at micro and macro levels. At the micro level, labour markets are gendered institutions, and at the macro level, austerity policies have inherent biases and negative impacts that fall disproportionately on women.     

Employment Flexibility,Dual Labour Markets,Growth, and Distribution

Many policymakers and economists have argued in favour of greater labour market flexibility as a part of structural adjustment reforms that are expected to improve economic performance. Existing post‐Keynesian‐Kaleckian (PKK) models are unable to address these issues because they assume away long‐term labour by allowing employment to be short term and adjusting freely with output. This paper introduces long‐term labour into PKK models. We develop a model that provides alternative ways of modelling labour market flexibility and suggest that when aggregate demand issues are important, an increase in employment flexibility is likely to have adverse growth and distributional impacts.     

Trade,Technical Change,and Labour Market Adjustment

This paper empirically examines three possible reasons for the high and rising unemployment of low‐skilled employees in Germany: (i) an upsurge in inter‐industry trade, (ii) a skill‐biased technical change, and (iii) a failure of labour market adjustment. The empirical analyses indicate that an exogenous wage‐setting process as well as a bundle of factors, including a skill‐biased technical and structural change, have contributed to the decline in relative demand for low‐skilled employees in Germany. Thus, economic policy in Germany should focus on improving the employability of workers in the lower segment of the labour market and on raising the adjustment flexibility, above all the flexibility of the wage structure, of the German labour market.     

EMU calls for comprehensive labour market reform

The debate about European monetary union has so far been dominated by questions of fiscal convergence, the adequate conversion exchange rate and the stability of the Euro. Relatively little attention has been given to the labour market effects although labour market performance will be crucial for the long-term success or failure of EMU. The following article deals with the interrelationship between EMU and labour market flexibility in Euroland.     

Do Labour Strategies Matter? An Analysis of Two Enterprise-Level Data Sets in China

This paper examines the effect of labour strategies and management types on firm performance in Chinese enterprises. We use two large panel surveys on Chinese enterprises, spanning almost two decades of transition. Our findings suggest that, as commonly thought, there are significant differences across ownership types in China in the degree to which flexible labour market strategies are utilized; and more flexible strategies (such as bonus-reward systems) do seem to significantly enhance performance. However, after controlling for different degrees of labour market flexibility, ownership differences have little influence on enterprise performance (with the exception that foreign joint ventures clearly outperform other types in growth and labour productivity). This important result suggests that the impact of Chinese ownership types on performance is felt through cost-impacts rather than via direct differences in competitive behaviour or the goals of enterprise decision-makers.     

Beschäftigungspolitik in Deutschland: Fine-Tuning statt Globalsteuerung

Until 2005 unemployment rates in Germany jumped after every recession to ever-higher levels. Neoclassical micro-economists interpreted this trend as market failure and consequently narrowed the debate to labour market policies intended to improve the assumed malfunctioning of labour markets. Macroeconomic relations were largely ignored or even negated, which also characterises the current approach of the federal German government towards European economic policy. This approach has contributed to high unemployment in the eurozone. The economic trends in the US show that monetary and fiscal policies that do not exclusively focus on low inflation but that also aim to improve growth and employment will be much more promising for Germany and Europe.     

Is greater flexibility in the labour market the answer to the unemployment crisis?

In view of high and persistent unemployment in the European industrialised countries there is growing consensus that more flexibility is needed with regard to both the legal and institutional conditions governing the labour market (external flexibility) and the management of human resources within individual firms (internal flexibility). This article examines the interaction between internal and external flexibility with special reference to wages, working time and job security.     

British Ethnic Minorities and Employment Training: Redressing or Extending Disadvantage?

The reasons which have been offered to explain the low labour market success encountered by ethnic minorities in Britain include their possible lack of motivation, lack of qualification and training opportunities, and discrimination in the labour market. Whilst discrimination as a contributory factor to labour market exclusion has been widely discussed in the literature, the efficacy of Government sponsored training schemes designed to equip ethnic minorities with skills which may improve their competitiveness and reduce their disadvantage has been subjected to less scrutiny. This article provides an evaluation of the role of Government sponsored employment training programmes in reducing ethnic minorities’ disadvantaged position in the labour market. It argues that training programmes designed to improve employment opportunities are failing members of the ethnic minority communities and are in some cases helping to extend their disadvantage. It identifies the reasons for the failure as (1) the constant changes in Government policies with the development of sometimes contradictory policies, and (2) the inefficiency and prejudice of the training and employing organisations which are involved in the process. The article concludes with an assessment of the consequences of continuing discrimination against ethnic minority communities.     

Employment relationships within European airport retailing

Despite undergoing major strategic change, airport retailing has remained a neglected area of academic study. As a consequence, the structure and operation of labour market operations within airport retailing remains largely undocumented. This article attempts to redress this issue by providing an examination of the factors that influence the employment relationship within an airport environment. Using a qualitative research methodology, it details the means by which airport authorities and retailers have attempted to restructure their employment relations in response to changing market conditions. The article takes the concepts of labour market segmentation and flexibility and examines the applicability of ‘dualist’ theory to airport retailing.     

The Timing of Daily Demand for Goods and Services—Microsimulation Policy Results of an Aging Society,Increasing Labour Market Flexibility,and Extended Public Childcare in Germany

Knowledge about the timing of consumption opens new insights into consumption behaviour for consumer, economic, social, as well as for communal and societal policies. It not only allows sound information for a better match of timely supply and demand but also about everyday living arrangements. This study contributes to the timing aspect of daily consumption by posing the question: How is the timing of daily demand for goods and services affected by major changes in German society? We concentrate on important and currently discussed developments and policies: the huge shift in Germany’s demographic structure with an aging society (with a population forecast for 2020 by the German Federal Statistical Office), the deregulation and the further expansion in flexibility of the labour market, and the current policy of extending public childcare support. For each aspect and policy, we first describe the actual timing of daily demand for goods and services. With the microsimulation approach and different scenarios, we then quantify the respective societal and policy impacts based on more than 37?000 time-use diaries of the current German Time Budget Survey of 2001/2002.     

Something unforeseeable happened? Natural rate theory and economic crisis

“Natural rate theory” — the application of the efficient market hypothesis to labour markets — has guided economic policy since the 1970s and laid the foundations for the design of major European institutions in the 1990s. Unfettered markets were declared to be stable, and consequently public policies and regulations were regarded as distortions. This led to a division of labour in which central banks were responsible only for price stability, governments for labour market reforms and unions for low wages. The European discussion focused almost exclusively on labour market reforms to reduce unemployment. Against the background of the recent dramatic drop in economic activity, this paper confronts natural rate theory with actual economic trends and argues that the predictions of the theory hardly fit the facts.     

MACROECONOMIC AND LABOUR MARKET POLICIES FOR EMPLOYMENT GENERATION IN SOUTH AFRICA

The recent advent of political democracy in South Africa has brought into sharp focus those macroeconomic and labour policies designed to combat unacceptably high unemployment levels, that have escalated steadily to present estimates of approximately 40 per cent of the Economically Active Population. The continuing implementation of neo-liberal orthodox policies, the authors maintain, will aggravate the problem. An alternative theoretical framework containing elements of a neo-Ricardian, post-Keynesian approach and based on research work of the Macroeconomic Research Group (MERG) is advocated. This approach focuses on State-led, demand-inducing policies, while not neglecting the supply side of the labour market in South Africa.     

Beyond efficiency: some By-products of functional flexibility

This article examines the outcomes of implementing functional flexibility for employers and employees. The use of functional flexibility is normally associated with improving efficiency. However the findings reported here, drawn from four case studies, show evidence of positive outcomes for both employers and employees which go beyond efficiency. For employees there was evidence of increased job satisfaction and in some cases increased remuneration and job security. For employers, there was evidence of improved operational functioning and customer service, reduced labour turnover and an enhanced reputation in the local labour market. It is argued that a ‘virtuous circle’ is set up.     

Labour market policies in the western industrialised countries

The longer the high levels of unemployment continue in western countries the greater is the discussion about a policy aimed at reducing unemployment which is independent of general counter-cyclical and growth policies. What type of labour market policy measures have been adopted up to now in these countries?