Flexicurity – a set of “common principles”? Per Kongshøj Madsen Centre for Labour Market Research (CARMA) University of Aalborg BPFnet-seminar Copenhagen, June 9, 2006

European Council March 2006 In this context, the European Council asks Member States to direct special attention to the key challenge of "flexicurity" (balancing flexibility and security): Europe has to exploit the positive interdependencies between competitive-ness, employment and social security…. The Commission, jointly with Member States and social partners, will explore the development of a set of common principles on flexicurity. Presidency conclusions, European Council, Brussels, March 2006

Some general advice Flexibility and security for the employees do not have to be contradictions Focus on protected mobility for people instead of trying to protect jobs Flexicurity arrangements can strengthen overall institutional competitiveness by promoting structural change ”One size will not fit all”

Four major criteria for transitional labour markets Empowerment: empower individuals to cope with the (new) risks of social life Sustainable employment and income: make transitions pay! Flexible coordination: establish a new balance between centralised regulation and self- organisation, more decision power to local levels Co-operation: stimulate local networks and public- private partnerships; the linking of resources Schmid & Gazier (2002)

Assessing the Hartz-reforms First, we ask to what extent flexibility …has been strengthened by the latest labour market reforms. To assess the security dimension, we ask whether the measures provide minimum income security to the atypically employed. … we further concentrate on the question if the measures enable transitions into standard employment, as an expression of enhanced employability. Lastly, we try to assess if option security among the atypically employed is improved Leschke et al (2006)

Preliminary thoughts We are looking for a strategy for policy- making The specific traits of ”flexicurity policies”? –Integration of different policy areas –There will be winners and loosers – at least in the short run –Principles for the policy process should be included

Common principles? The design: –The principle of integrating flexibility and security The process: –The principle of negotiated ”trade-offs” The outcome: –The principle of sustainable employment and social cohesion

# 1: Policy-design Both the flexibility and the security elements of the flexicurity strategy must be well defined The interaction between the flexibility and the security elements must be unambiguous with respect to trade-off(s), positive interactions and vicious circles. Mechanisms of compensation for potential gains and losses for different groups must be included in the strategy.

#2: Process All relevant stakeholders (including those at the local level) should take part in the process The process must be transparent with respect to the distribution of gains and losses The political process should include political guarantees that ensure the implementation of the flexicurity strategy over time. The flexicurity strategy should mobilize and link resources from different actors.

#3: Outcome The flexicurity strategy should in the long run improve the employment options and the quality of employment for all groups on the labour market. The flexicurity strategy should have an advantageous effect the distribution of welfare and living conditions in general. The flexicurity strategy should empower weak groups to cope with their situation

A hierarchy Three overarching principles A number of more specific guidelines/checklists Best practices (the toolbox..)