Cracks in the system europe social security 1970 2000
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Cracks in the system: Europe social security 1970 - 2000. Subjects. First: 1950 – 1970 Ingredients for changing circumstances Case study: “Dutch disease” 1980 – 2000 Revision of social security Framework for sustainability: flexicurity. 1950 - 1970. Rebuilding Europe

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Subjects
Subjects

  • First: 1950 – 1970

  • Ingredients for changing circumstances

  • Case study: “Dutch disease”

  • 1980 – 2000 Revision of social security

  • Framework for sustainability: flexicurity


1950 1970
1950 - 1970

Rebuilding Europe

High economic growth (average 4.1%)

Low unemployment (average < 3%)

Gradual development of social security arrangements & institutions:

  • Unemployment

  • Sick leave

  • Disability pension

  • Retirement pension

  • Welfare

  • Child support

  • Health

    Controllable level of expenditures on social security


Initial concept and basis social security continental western europe 1950 1980
Initial concept and basis social security continental Western-Europe 1950-1980

Mostly based on (non-extended) family with one breadwinner

Tendency to cover “each risk” – limited personal risk

Open-end arrangements: cradle to grave

Wage related

Division between general social security and employee insurances

Sharp division responsibilities employer – Social Security Institution

Mostly financed by contributions employer – employee



Ingredients for changing circumstances 1970 s
Ingredients for changing circumstances: 1970’s Western-Europe 1950-1980

Oil crises (‘73, ‘79)

Increased world competition (Japan, S.E.-Asia)

Industrial rationalisation

Stagflation

Increasing unemployment

Society used to growth

Strong – defensive – trade unions

2nd emancipation wave

Changing family concept: individualism




Dutch disease

Case study Western-Europe 1950-1980

“dutch disease”


Case study dutch disease
Case study “Dutch disease” Western-Europe 1950-1980

Strongly increasing number of social benefits:

  • Rising number of unemployment benefits

  • Rising welfare arrangements

  • Fast rising (long term) disability pensions

    Mismatch labour market (policies)

    Unbalances between rights and obligations in social security

    Limited control on eligibility

    “calculating behaviour”


  • Unemployment

  • benefits III

  • Unemployment

  • benefits II

  • Social welfare


In and outflow disability pensions
In- and outflow disability pensions Western-Europe 1950-1980

  • Inflow

  • Outflow



Composition of expenditures gdp
Composition of expenditures (% GDP) Western-Europe 1950-1980


Cheating
Cheating….. Western-Europe 1950-1980


Solutions revision 1980 2000
Solutions: Revision 1980-2000 Western-Europe 1950-1980

Strengthening labour market & employment policies: flexibility & redistribution of employment

Reducing benefit percentages (overall)

Reducing (wage related) benefit periods (unemployment benefits)

Reducing (life-long) rights (disability pension)

Strengthening eligibility control

Subsidised labour programmes

Extending employers’ responsibilities

Rehabilitation programmes

Activating social security & “ability-approach”

Other organisation - strong government influence

Flexicurity


Expenditures social security 1950 2002 gdp
Expenditures social security 1950-2002 (%GDP) Western-Europe 1950-1980

Expenditures came down from 19% GDP in 1983 to 11% in 2008


Group assignment
Group assignment Western-Europe 1950-1980

Do you see a danger for “explosion” of the Turkish social security, comparable to “Dutch disease”?

If so: where and why?

If not: why not?

20 minutes discussion

5 minutes prepare report

5 minutes presentation

15 minutes plenary questions and discussion


Flexibility flexicurity

Concept and practice Western-Europe 1950-1980

Flexibility & Flexicurity


Subjects1
Subjects Western-Europe 1950-1980

  • Definition of flexicurity

  • Flexibility: different interests of employees and employers

  • Flexibility: economic context

  • Labour protection

  • Dealing with different interest positions

  • Flexicurity: areas of change

  • The “golden triangle”

  • Case study: flexicurity framework in the Netherlands

  • International comparison

  • Assignment: perspective for flexicurity in Turkey


Definitions
Definitions…. Western-Europe 1950-1980

Flexibility:

  • Elimination of barriers of formal or customary rules that lead to rigidity on the labour market (both supply and demand side).

    Security:

  • Regulation and facilities providing workers with safety in employment and income.


Definitions of flexicurity
Definitions of Flexicurity… Western-Europe 1950-1980

  • “Socialprotectionforflexibleworkforces” (Klammer and Tillman, 2001)

  • “A policystrategythatattempts - synchronically and in a deliberateway –

  • to enhance the flexibility of labourmarkets, the workorganisation and labour relations,

  • and to enhancesecurity – employmentsecurity and socialsecurity – notablyforweakergroups in and outside the labourmarket.” (Wilthagen and Rogowski, 2002)


One more definition flexicurity is
One more definition…. Flexicurity is… Western-Europe 1950-1980

  • a degree of job, employment, income and combination security that facilitates the labour market careers and biographies of workers with a relatively week 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), functional and 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.” (Wilthagen & Tros 2004)


Different interests in flexibility
Different interests in flexibility Western-Europe 1950-1980

Employee

Employer

Working hours

Work schedule

Place of work

Qualification level

Experience level

Adaptability level

Contract conditions & form

Contract duration

Contract termination

Labour costs – (wage flexibility)

  • Working hours

  • Holidays

  • Study leave

  • Sabbatical

  • Maternity

  • Parental

  • Family care (emergency)

  • Older workers

  • Disability – diminished capacity


More on employer s interest
More on employer’s interest Western-Europe 1950-1980

  • Working hours:

    • Daily

    • Weekly

    • Monthly

    • Yearly

  • Working schedule:

    • Day time

    • Day shifts

    • Week shifts

  • Working place

  • Probation period

  • Contract form:

    • open-end contract

    • part-time contract

    • fixed-term contract

    • temporary work contract

  • Contract duration

  • Contract termination

    • Procedures

    • Notice period

  • Qualification level

  • Experience level

  • Adaptibility level

  • Labour costs (wage flexibility)

    • Performance appraisal

    • Output-related

    • Turnover-profit-related


Economic context for flexibility
Economic context for flexibility Western-Europe 1950-1980

Economic needs vary

Technology has made economic developments go faster – smaller world

Labour market needs (demand side) must “breath optimally” with economic needs in order to:

  • Optimise economic performance

  • Optimise conditions for sustainable employment

  • High employment level is best condition for growing income


Determinants for flexibility labour protection
Determinants for flexibility: labour protection Western-Europe 1950-1980

(Regulation for) Contract forms

Regulation for private temporary employment agencies

Probation period

Protection against dismissal

  • General procedures – external authorisation?

  • Dismissal prohibition for certain groups and/or circumstances

    Employer‘s period of notice

    Employee‘s period of notice

    Leave schemes

    Unilateral transfer of personnel by employers

    Limitation of the employee’s liberty to switch employers

    Regulation for business take-overs


Dealing with different interest positions
Dealing with different interest positions Western-Europe 1950-1980

By law

  • Directive & descriptive

  • Framework: minimal requirements and provisions/conditions

    By collective bargaining agreement:

  • Directive & descriptive

  • Framework: minimal requirements and provisions/conditions

    By individual agreement

    Flexibility and security are excellent themes for trade-offs: negotiations


Playground for flexicurity
Playground for Flexicurity Western-Europe 1950-1980

  • Legislative:

    • Labour laws & regulation

    • Labour market policies

    • Life-long-learning and educational facilities

    • Health & safety regulation

    • Collective bargaining laws & regulation

    • Works councils regulation

    • Economic laws (business take-overs)

    • Social security laws and regulation

    • Tax policies

    • (Regulation for self-employment)

  • Infrastructure:

    • Sound vacancy registration

    • Active flex/temp agencies

    • Facilities for adult education & training

    • Adapted control system

    • (child care facilities)

  • Culture:

    • Awareness employers

    • Willingness employees


The golden triangle
The “Golden Triangle” Western-Europe 1950-1980


Flexibility security matrix
Flexibility – Security Matrix Western-Europe 1950-1980


Flexicurity framework in the netherlands

Case study Western-Europe 1950-1980

Flexicurity framework in the Netherlands


Previously
Previously… Western-Europe 1950-1980

Starting point

  • Dual system of dismissal law for (open-end) employment contracts, “preventive nature”

    • Before dismissal, employers have to address either:

      • The public employment service

      • Or the lower courts

  • High level of “a-typical workers”:

    • Workers in temporary employment agencies without contract

    • “0-hour contracts” and minimal (flexible) contracts

      Flexicurity debate started in 1995

      Bi-partite, tri-partite and parlementary deliberations and negotiations

      Concluded in Law on Flexibility and Security 1999


Flexicurity flexibility measures
Flexicurity - flexibility measures: Western-Europe 1950-1980

More possibilities for (consecutive) temporary contracts

Maximum length of time for temporary work scrapped

Notice period is set on one month in principle

Shortened and easier dismissal procedures

Employees have a conditional right to expand/reduce their working hours.

Facilitations for improved combinations of ‘work and care’.

More possibilities for employers to make the length of the workdays and workweeks dependent on business activity

More possibilities for sectors and companies to make tailor made arrangements for contracts and working time, deviating from law standards


Flexicurity security measures
Flexicurity Western-Europe 1950-1980 - security measures:

Strengthening position of “a-typical workers”:

  • Assuming existence of an employment contract

  • Conditional assumption of agreed working hours

    Minimum pay of 3 hours when a worker is called for work

    0-hour contracts: employers have to resume paying for non-worked hours after six months

    Temp-agency-worker get normal employment contract after the first 26 weeks

    Requests to terminate employment contract of occupationally disabled employee must be accompanied by a reintegration plan

    Collective Bargaining Agreement for workers in temporary work agencies


Results netherlands
Results Netherlands Western-Europe 1950-1980


Developments netherlands
Developments Netherlands Western-Europe 1950-1980






International comparison flexicurity arrangements
International comparison: Flexicurity arrangements Western-Europe 1950-1980

Security

+

Denmark

Belgium

Netherlands

Finland

Germany

Flexibility -

+

Spain

Italy

Source: IP Flexum 2006

-


Group assignment1
Group assignment Western-Europe 1950-1980

How does Turkey score in a flexibility & flexicurity framework

Could more flexibility and flexicurity help in making Turkey’s labour force more competitive?

Can it reduce unregistered employment?

Do you see opportunities? Where?

What is essential?

30 minutes group discussion

5 minutes prepare report

5 minutes presentation


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