Flexicurity and transitional labour markets

1. Flexicurity and transitional labour markets Jean-Claude Barbier CNRS Université Paris1 Centre d’économie de la Sorbonne jean-claude.barbier@univ-paris1.fr International seminar Cicero Foundation, 11-12 October, 2007, Paris Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

2. 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? Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

3. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

4. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

5. Marrying TLM and ‘flexicurity’ • Not an easy task: • TLM theory entails sharing a (strong) normative perspective Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

6. Transitional labour markets • Günther Schmid’s four criteria of « good » transitions: • Freedom/autonomy • Solidarity • Effectiveness • Efficiency Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

7. 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 Specification: labour market/social protection risks and rights Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

8. Marrying TLM and ‘flexicurity’? • A marriage entails the clarification of certain things • Can flexicurity match TLM basic values (principles) ? Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

9. Flexicurity as a system of social arrangements (complementarities) that produce a balance [1] Flexicurity as a strategy [2] Flexicurity = a polysemous notion Flexicurity as a political slogan Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

10. Flexicurity as a system [1] • Yielding a balance • Identifying the balance: a sociological task • => identifying national cases: Denmark and the Netherlands Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

11. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

12. 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] Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

13. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

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

15. An evolving/elusive notion • Spotting differences in definitions Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

16. 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.

17. 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 systemswhich 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. Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

18. 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 » Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

19. =>>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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

20. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

21. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

22. 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?) Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

23. Freedom/autonomy Solidarity Effectiveness Efficiency Sociological in-depth understanding of the social arrangements Schmidt’s principles? Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

24. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

25. Flexibility, hire and fire ‘activating’ policies Generous social protection Labour market: the ‘Golden triangle’ Social con-ditions The « Golden triangle » and its social conditions IR system Norms, values ‘Forlig’, 1899, 1933,… Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

26. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

27. Empirical commonalities • Social partners • Negotiation • Systemic consistency • Public support = legitimacy • Consistent outcome= overall quality employment Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

28. 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 Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

29. 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) Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

30. Appendix Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

31. Benefits and employment: some lessons Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

32. 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 Dimensions of social citizenshipand the TLM criteria Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

33. 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? Two recent (unfinished) French reforms Unemployment insurance (PARE) (2001 =>) Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

34. 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? Two recent (unfinished) French reformsRMI reform (on-going) Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

35. 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) Barbier CNRS Université Paris 1 Panthéon Sorbonne CES Matisse

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

37. Activation and existing restructuring reforms: a sketch