Flexicurity in the crisis or the crisis of flexicurity? Ton Wilthagen Tilburg University, the Netherlands

Questions on preconditions of flexicurity – when it all begun Geography: is flexicurity only possible in the North Western part of Europe, where certain levels of flexibility and security already exist? Size: is flexicurity a “small country thing” – coordination is the problem in large countries (federal structure) Personal factor: does flexicurity depend on certain architects/ institutional agents? Labour market/business cycle: is flexicurity only feasible in sound economic and labour market conditions?

Is flexicurity a sunny weather concept? Flexicurity

How about flexicurity in bad weather? Crisis is natural experiment!

This presentation 1Flexicurity itself as a paradigm shift in the regulation of labour markets and employment 2Does the crisis mean a shift? the content (modalities) of flexicurity? in the coordination and organisation of flexicurity? In the performance of flexicurity in the flexicurity solutions? 3.And where is this all taking us?

Measuring flexicurity Source: Chung & Wilthagen, forthcoming

Policy change: significant or not? Danish flexicurity in crisis Country Policy change No change Current policy not working Symbolic for the public or EU Structural or temporary ? Current policy adequate Or: change not possible – politics, capacity or money

Flexibility and security modalities (Flexicurity Matrix) security flexibility Job security (remain in same job) Employment security (job to job; no job to job) Income security (social security) Combination security (work and care) External - numerical (hire and fire) Internal - numerical (working-time flexicurity) Functional (employability) Variable pay

Flexibility and security modalities (Flexicurity Matrix) security flexibility Job security (remain in same job) Employment security (job to job; no job to job) Income security (social security) Combination security (work and care) External - numerical (hire and fire) Danish and Dutch flexicurity Internal - numerical (working-time flexicurity) Functional (employability) Variable pay

The crisis and flexibility and security modalities security flexibility Job security Employment security Income (social) security Combination security (work and care) External - numerical (hiring and firing) Temporary placement other firm Mobility centres; Worker pools UB as wage subsidy; retirement; lower tax Mortgage support Internal - numerical (working-time flexibility) Shorter working hours; WT accounts Multi- employership Part-time UB; reduced working hours Take up of leave schemes holidays Functional (employability) Job rotation Internships other firm; Retraining Retraining for new job Accreditation of prior learning Variable payAdjust- ment of wages Supplement wage new job Extra UB; private savings Increased family allowance

Over past year much effort has been put in developing flexicurity indicators EMCO (Employment Committee of EU) European Commission: composite indicators on contractual flexibility, life-long learning, ALMP and modern social security By academics: various indicators (sometimes mixing up ‘efforts’ and ‘states’ indicators), among which dynamic indicators (Ruud Muffels)

1.Strictness of employment protection9. Net replacement ratios in the first as well as after 5 years 2. Diversity of and reasons for contractual and working arrangements 10. Unemployment trap, seen as a measure of benefit levels 3. % of adult population between 25 and 64 participating in education and training 11. Employment rate, total, for women, and for older workers 4. Educational attainment of age cohorts and Youth unemployment ratio (15-24 years) 5. Expenditure on active and passive labour market policies as a % of GDP 13. Long-term unemployment rate 6. Expenditure on active and passive labour market policies per unemployed person 14. Growth in labour productivity 7. No. of participants in active labour market policies, by type of measure 15. Quality in work 8. Share of young or adult unemployed not offered job or activation measure within 6 or 12 months 16. At risk of poverty rates Draft flexicurity Background indicators 2007 Communication

Measuring flexicurity (state, policy) Measuring flexicurity performance (in view of crisis and in general)

Measuring flexicurity performance in times of crisis Economic growth/recovery? (Un)employment rates, change of these rates? Labour market participation levels? Unemployment duration/long-term unemployment rates? Mobility/labour turnover/job to job rates? Speed/chance of reintegration back into the labour market? Job destruction/creation rates? Position of weak groups (temp workers)? Investments in ALMP/LLL Income replacement rates Subjective assessment of job/income insecurity?

Unemployment rates in the EU

Change in part-time employment as a share of total employment between 2008Q2 and 2009Q Part-time work increases due to shorter working hours schemes and reduction of working-time

How should this be evaluated? Employees with temporary contracts

Solutions: how about the pathways to flexicurity? Flexicurity pathway 1: dealing with flexibility at the margin Flexicurity pathway 2: securing transitions from job to job Flexicurity pathway 3: access to learning and good transitions for all Flexicurity pathway 4: comprehensive social security supporting transitions to regular work Need for specific ‘crisis pathway’?

To conclude with Back to the question: flexicurity in crisis times or the crisis of flexicurity? Face of flexicurity might change, but rather temporarily than in a structural way From Danish/Dutch external flexibility + employment security to continental (German, Belgian etc) combination of internal flexibility + job security A (temporary) shift ‘powered by’ the State and less by the social partners European Commission wishes to continue flexicurity post 2010

Commission’s Communication on release of Employment in Europe 2009 European labour markets will be changed profoundly by the crisis and the transition to a low carbon, knowledge-based economy, and workers and companies must be given the necessary means and incentives to successfully adjust to these changing realities in ways which favour inclusion, equity and social justice. Flexicurity, combined with comprehensive active inclusion policies, remains the right approach to both modernising labour markets and ensuring a successful recovery.

To conclude with Who will be the carriers of flexicurity other than traditional social partners? Flexibility will spread, notwithstanding future labour shortages; traditional securities will not expand. Flexi-quality will be precondition for future flexicurity: quality, productivity and sustainable use of both human and natural resources Much interest coming from countries outside EU (which often already have high levels of flexibility and are lacking security, but not in all cases) Better indicators and monitoring are essential!