Different flexible forms of work and security dimensions of flexibility: Flexibility, life-long learning, ALMP, social security policies Sara Martinson 1

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Outline A. Different flexible forms of work I. Regulation of open-ended, permanent, contracts Internal and external flexicurity (a-d) II. Regulation of fixed term contracts and temporary forms of employment B. Security dimensions of flexibility Active labour market programmes, life-long learning, social security policies C. Sweden 3

Literature Wilthagen, Tros & van Lishout (2003) “Towards flexicurity, balancing flexibility and security in EU member states” OECD (2009) “OECD employment protection indicators” Pierre Cahuc (2011) “The Swedish employment protection” European Foundation for the Improvement of Living and Working Conditions (2007) “Approaches to flexicurity: EU models” 4

A. Different flexible forms of work 5

I. Flexibility – permanent jobs a)Working hours, Overtime, part-time work, time-bank etc Internal numerical flexibility b) Wage, Performance and result-based pay Wage flexibility 6

Example 1: flexible working hours and wage Negotiations working time reduction during the crises: Volvo Powertrain in Köping -The union accepted to cut the work hours with 20 % in combination with a 10 % reduction in wages. This meant that a notice of 25 employees was withdrawn. 7

Example 2: Flexible working hours and wage Ardagh Glass company, Lund Employees voted: notice or shorter hours? Almost everyone voted for shorter hours: work 74 % for 84 % salary. Education. We do not know anything about the effect of these actions. Temporary solutions. 8

I. Flexibility – permanent jobs c) Flexible job assignments, Change assignments, and the organisation of work Functional flexibility On the job-training Flexible working hours, wage and job assignments internal flexibility  external flexibility 9

I. Flexibility – permanent jobs d) Firing and hiring Change employer Numerical flexibility, external flexibility Employment protection legislation – rules governing the firing of workers and use of temporary contracts 10

The employment protection legislation One third of all workers are hired and/or separated from their employer every year in OECD Reallocation is probably good for productivity, but can be bad for the individual + Employment protection legislation reduces the risk of job loss - Restricting labour turnover, restricting employers to adapt 11

The employment protection legislation Research: -A rigorous employment protection have no effect on rate of unemployment. Hinder job destruction, but also job creation. -More difficult for the outsiders to get in. Longer spells in unemployment The choice of good legislation is a matter of trade off between the benefits and costs of job legislation 12

How flexible are different protection legislations? How do you compare different systems? 13

OECD employment protection indicators 21 items quantifying various aspects of employment protection: Costs and procedures involved in dismissing individuals with permanent contracts Additional costs for collective, group, dismissal Regulation of temporary contracts, hiring workers with fixed-term or temporary work agency contracts 0-6 – from 0 least stringent to 6 the strongest regulation 14

15 OECD Employment protection index 2008

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Different flexible forms of work 17

II. Flexible forms of work Temporary jobs, fixed-term contracts: On call-workers, job pool, project employment, temporary employment, working-time accounts, teleworking, fixed-term work 18

How flexible work is regulated i)Valid cases for use of fixed-term contracts ii)The maximum number of successive fixed term- contracts on a working place iii)How long the employee can have successive fixed term-contracts Important with security for these groups of atypical workers 19

Flexible contracts + A stepping stone + Good for employers with adaptability - Risk of becoming a dual labour market - Less satisfied  New entries: Youths, immigrants 20

What about security? 21

Flexicurity matrix (Wilthagen and Tros) Job security –Employment security – Income/social security - Combination security – Numerical flexibility (ext) Functional flexibility (int) Working time flexibility (int) Wage flexibility (int)

In the flexibility discussion lies a shift from job security towards employment security change employers – remain in work The need of social security Income security Unemployment benefit, “support for activity”, sickness benefit 23

Important ways to reach employment security Life long learning Skilled, adaptable workforce Active labour market programmes, ALMP Smooth transition between jobs Help people to re-enter “A crucial role in defining flexicurity models” 24

25 ALMP: measures to raise employment, immediately addressed to unemployed Public employment service With the aim of improving the matching between vacancies and job seekers (325 in Sweden) Labour market/ vocational training (1916) Subsidised employment schemes to raise employment and job creation (relief works, work experience schemes, self-employment grants) Compulsory programmes “Guarantee programmes“ after unemployment benefit runs out

Expenditure active labour market policies as per cent of GDP (OECD Employment outlook) Sweden1,101,791,14 USA0,20,170,14 OECD (mean)0,540,70,66 EU (mean)0,620,790,78 26

What works? Research overview Subsidised employment schemes, positive treatment effect. Difficulties with “crowding out” ordinary jobs Intense public employment service is the most efficient way to help the unemployed, combined control In the Swedish context training/education programmes are quite efficient, but expensive 27

Fourth aspect of security Combination security Work and family life Maternity leave, parental leave, childcare etc 28

How does Sweden balance security and flexibility? 27 different strategies, conditions and challenges are different “The Nordic cluster” Sweden, Denmark, Finland & the Netherlands Strong in both flexibility and security 29

Strong social partners SP have a large responsibility for the functioning of the labour market – collective agreements, not laws Take responsibility for the firm on industry and firm level BUT the state has main responsibility for creating the right framework, social security and life long learning systems 30

Worries Dual labour market  more inclusive labour market and incorporate those who are on the outside (disability pension, foreign background, unemployed, young) Wide gulfs  balance between security and flexibility to reduce labour market exclusion. 31

Flexicurity in Sweden – lowering thresholds More worthwhile to work (supply side) Less costly to take new employees (demand side) Income tax reform, low and medium incomes Tightening of social security systems 32

Tax deduction on domestic services Unification of public employment service Lower volumes in active labour market programs to improve efficiency 33

Summary Flexicurity can be both within (wage, working time, functional) and between jobs (numerical). The employer protection legislation is an important tool that regulates both permanent and temporary jobs. ALMP, are important but shold be used with care, important to follow up and evaluate the effects. Different paths to flecicurity, the social partners important. 34