Public policy and European society University of Castellanza Session #2(c) Employment and welfare 8 March 2017

Outline Four (not three) worlds Giddens: Blocked societies (France, Germany, Italy) Low employment, inflexible labour markets, weak education, low birth rates BUTadvantages of inflexibility Scandinavian success High employment, flexible labour markets, good education, moderate birth rate and high social welfare! Unblocked Europe? German growth Continued demographic crisis

Lisbon Declaration Lisbon targets Why work? 70% overall employment 60% women 50% older workers Why work? Avoids poverty and dependence on state Contribution to wealth of society Social participation Economic citizenship thus itself a justification for employment Notice that `different‘ worlds of welfare’ have different understandings of work!

Three (or four) worlds of welfare – and ‘defamiliasation’ Liberal regime Market solutions Deregulated labour market- Immigrant caring labour Part-time and temporary work for women Social democratic Extensive care services: Good low skill employment Enable women to leave home Conservative/ corporatist Subsidiarity so family important Insurance based benefits Priority of full-time work Mediterranean (?) As conservative but incomplete coverage Which countries? UK and Ireland Scandinavia France and Germany Italy, Spain, Greece… New member states? Changes?

Low employment low poverty NORDIC High employment low poverty CONTINENTAL Low employment low poverty NORDIC High employment low poverty ANGLO High employment high poverty MEDITERRANEAN Low employment high poverty

High employment protection is linked to low benefit coverage Weak welfare states mean greater suffering in the crisis – Greek ‘humanitarian disaster High employment protection is linked to low benefit coverage Employment Protection Legislation – laws that make it difficult and/or expensive for employers to dismiss employees

Blocked societies Insider/outsider labour markets Low employment rates High unemployment High youth unemployment Ineffective third level education Disconnection from labour market (low returns to education) Long duration of degree Low research (few high ranked universities) Low birth rates Germany and especially Italy; not France Despite traditional pro-family policy And in Italy: Low female employment Corruption

Benefits of inflexibility German vocational training system High quality apprenticeship for most school leavers ensures qualification ‘Lehre’ which recognised and valued National ‘Berufsbilder’ define qualification Dual system of employers and state Organised by employers with trade union input Trade off Employers cannot easily dismiss employees (Numerical flexibility) Employers have incentive to use employees flexibly (Functional flexibility) So ‘beneficial constraints’ (Streeck) of inflexibility

Good and bad flexibility? Both UK and Denmark appear highly flexible and have high employment – but in different ways In the UK: Flexibility on employers’ terms Bad jobs and/or poverty? In Denmark (also to some extent Sweden) ‘Flexicurity’ Flexibility also for employees Easy dismissal but high social protection High spending on training and ‘activation’ (counselling etc) ‘Protect the worker not the job’

Scandinavian flexicurity Activation Retraining and life-long learning Protect the worker, not the job Low Employment Protection Results High employment rate High job mobility (‘flexibility’) and effective job search Firms can innovate without employment problems BUT needs high trust and is expensive!

Scandinavian successes Family and social services Extensive good quality services (especially childcare) enable women to participate in employment by moving ‘women’s jobs’ outside the home Social services provide good quality caring jobs (largely for women) Contributes to relatively high birth rate and egalitarian household division of labour BUT public sector/private sector gender divide High and continuing education High overall levels of education (no US or UK ‘tail’) The basis for innovative enterprises through links to commercial R&D Creates flexible workforce

Women’s core age employment: Sources: Derived from European Commission (2004); European Commission (2014).

Old Europe? Total fertility rates 1975-1992 New causes of low fertility: Low labour market participation Strong influence of traditional ideology Total fertility rates 1975-1992 New causes of high fertility High labour market participation Childcare (state or market) Flexible labour markets

Formal Childcare Source: European Commission (2013) Table 2.2.2. Note: Figures for Poland ‘are based on small samples and therefore not considered statistically reliable’

But fertility gap stays