Do countries matter? Explaining the variation in the use of numerical flexibility arrangements across European companies using a Multi-level model

Do countries matter, especially compared to other aspects that affect the flexibility behaviours of companies? Many studies on the labour market assume that there are country differences, cross-national variances, and that it is a crucial factor in explaining the actual practices of the labour market by individuals and companies. The supposition is that although there are variations across countries, the behaviour of actors within the country is rather homogeneous. Thus, due to country level characteristics, the actors within the country are seen to act similarly. This is due to the fact that individuals and individual companies are restricted within the country due to their institutional frame, cultural and social boundaries. However, this does not necessarily mean that actors are completely restricted within these boundaries. This becomes more evident when we are dealing with labour market flexibility options, for this can be developed (in companies or perhaps by individuals) as a coping mechanism to overcome the restrictions of society. This paper asks the questions, do countries matter, and to what extent it does matter and how it matters. It addresses this issue by first comparing the variance of each level under examination, that is, the country, sector and company level, through the use of a multi-level random effects model. The examination of the variance of each level will allow us to see to which extent countries matter. Also this model allows us to see how factors that explain the flexibility behaviours of companies show different effects across countries to answer the question how countries matter in an exploratory manner. The issue of flexibility is addressed uniquely in this paper in two aspects. Unlike many of the previous studies on this issue, this paper uses a broader definition of flexibility, thus, it perceives labour market flexibility as a method used for the needs of workers as well as those of employers or companies. In other words, as companies facilitate their adaptation to business cycles through labour market flexibility, workers adapt to life cycles through it. Based on this definition, flexibility practices used within companies can be measured two dimensionally, on one side its overall level and another to whom it is (more) geared towards. Also, unlike studies that focus on one or few specific arrangements, this paper does not examine various flexibility options as separate entities. It examines the practices as a whole, i.e. the use and the combination of various arrangements in achieving numerical flexibility. The data used here is the European Survey of Working-Time and Work-life Balance (ESWT) from the European Foundation of the Improvement of Living and Working Conditions. This survey covers 21000 establishments in 21 EU member states for the years 2004/2005. The outcomes of this study show that being within a certain country is indeed an important factor in explaining the differences between companies in taking up flexibility options. However, the variance between companies within a country is much larger, especially when considering the flexibility options that are geared towards the needs of employers. Compared to country and company levels there are small differences between sectors within countries. Of the company level characteristics, size of the company, worker composition, industrial relation aspects, and variations in work loads were important determinants of the flexibility practices within companies. Also it seems that the effects of explanatory variables are different across the European countries. For flexibility options that are used for company’s production needs being within certain sectors have different implications across countries. For flexibility options that are used for worker’s work-life balance needs, industrial relations aspects of the company, thus the existence of working time agreements and employee representatives have different implications across countries. There seems to be a division with the EU 15 and the new accession countries in these effects where the relationship as well as the strength of the effect changes. There are some evidence that companies may use work-life balance options as incentives to recruit and maintain their skilled work force, as we can see the countries where labour force demand is strong the effect of proportion of skilled workers in the provision of flexibility options for workers is stronger, and visa versa. Also collective agreements on working time may help the use of various flexibility option for both worker’s needs as well as company’s needs, especially in countries where flexibility options are not widely and frequently used.labour market flexibility; company level practice; multi-level model; random effects model; work-life balance; working time; numerical flexibility; cross-national comparative study; European Establishment Survey on Working Time (ESWT); public sector; working time agreements; country level variance

Flexibility, but for whom? : A new approach to examining labour market flexibility across Europe using company level data

Labour market flexibility continues to be one of the key issues in the reform of labour markets in welfare states. The way in which various countries adapt to this need differs according to their institutions and prevailing strategies. Despite the vast numbers of studies addressing this issue, labour market flexibility has been examined predominantly by concentrating on the arrangements that firms adopt to adjust to market fluctuations. Thus flexibility arrangements are perceived to exist only to facilitate employers’ or companies’ needs. However, flexibility in the labour market also enables individuals to accommodate various needs that occur throughout their life course and to facilitate one’s work-life balance. As companies adapt to business cycles with labour market flexibility, workers adapt to life cycles with it. Based on this definition, flexibility practices of companies can be measured two dimensionally, on one side its overall level and another to whom it is (more) geared towards, workers or the company. In addition, this study examines flexibility at the establishment level, in contrast to previous studies of flexibility which focus on the institutional/regulatory level or the individual behavioural level. The aims of this project are three-fold: firstly to examine the various practices of flexibility in companies to see if flexibility can indeed be partitioned as described above; secondly through aggregating company data to the country level, see whether there are cross-national variances in the degree and focus of flexibility practices; and lastly to investigate the relationship between the use of flexibility options for employers and those for employees. The data used to answer these questions is the European Survey of Working-Time and Work-life Balance, a survey based on the establishment level covering 21 EU member states for the year 2004/2005. The outcomes show that based on the practices of companies, flexibility can indeed be distinguished depending on whose flexibility it accommodates. Moreover, they show that countries where the average company has more flexibility arrangements for employers it provides more arrangements for employees as well, and there seems to be more variation in the provision of the latter than the former.labour market flexibility; flexibility arrangements; company level; European Survey of Working-Time and Work-life Balance; ESWT; worker's flexibility; company's flexibility; working time; work-life balance; cross-national comparative study

WP 84 - Working time flexibility components of companies in Europe

Working time flexibility comprises a wide variety of arrangements, from part-time, overtime, to long-term leaves. Theoretical approaches to grouping these arrangements have been developed, but empirical underpinnings are rare. This paper investigates the bundles that can be found for various flexible working time arrangements, using data of the Establishment Survey on Working Time (ESWT), 2004/2005, covering 21 EU member states and 13 industries. Using factor analyses, the results confirmed that working time arrangements can be grouped into two bundles, one for the employee-centred arrangements, a second for the employer-centred arrangements, and that these two bundles are separate dimensions. We have also tested the stability of the factor analysis outcome, showing that although there are some deviations from the pan-Europe and pan-industry outcome, the naming of the components as flexibility for employees and flexibility for employers can be interpreted as holding rather stable. Lastly, we also find that there are three country clusters that can be found for the 21 European countries using the bundle. The first group consisting of the Northern European countries with Poland and Czech Republic, the second group the continental European countries with UK and Ireland, and lastly, the southern European countries with Hungary and Slovenia.

Do institutions matter? Explaining the use of working time flexibility arrangements of companies across 21 European countries using a multi-level model focusing on country level determinants

"This paper explores the reasons behind the differences in the use and provision of different types of working time flexibility options of companies across European labour markets with a special focus on the country differences. Competing theories on the cross-country variances of labour market flexibility are tested to examine whether labour market institutions are the driving forces of working time flexibility practices in comparison to other factors such as economic, labour market structures and cycles. It uses a multi-level model which enables examination of companies in the context of the country in which it is embedded, while including both company and country level characteristics in the explanatory model. In this paper, the issue of flexibility is addressed broadly, thus, it perceives labour market flexibility as a method used for the needs of employees as well as for those of employers. In addition, the 'flexible firm' approach is taken and various flexibility options are considered to be bundles of arrangements with similar latent characteristics and not as separate entities. Based on this, the paper explains the differences between countries where there are more worker-oriented working time flexibility options to those where flexibility practices are more company oriented. The data used here is the European Establishment Survey of Working-Time and Work-life Balance (ESWT) from the European Foundation of the Improvement of Living and Working Conditions. This survey covers over 21,000 establishments in 21 EU member states for the years 2004/2005. The outcomes of the analyses show that indeed institutions, such as employment protection regulations or centralization of bargaining explain the differences across countries in their variance in working time practices. In addition, the strength of unions is associated to countries where companies use more worker friendly working time options and less company-oriented options. Labour market situations and structure of the economy such as deindustrialization or female labour market participation patterns also explain the country differences in working time practices. However, for the worker-oriented flexibility it seems that institutions are more important whereas for the company-oriented flexibility options, economic and labour market situations are the driving source." (author's abstract)"In der vorliegenden Analyse werden die Hintergründe für den unterschiedlichen Einsatz verschiedener Modelle zur flexiblen Arbeitszeitgestaltung von Unternehmen in europäischen Arbeitsmärkten untersucht. Das besondere Interesse liegt auf den Unterschieden zwischen den einzelnen Ländern. Dabei werden konkurrierende Theorien über Varianzen der Arbeitsmarktflexibilität zwischen den Ländern getestet um zu untersuchen, ob institutionelle Arbeitsmarktregelungen die treibenden Kräfte für unterschiedliche Anwendungen flexibler Arbeitszeiten sind verglichen mit anderen Einflussfaktoren wie bspw. Arbeitsmarktstrukturen und Konjunkturzyklen. Hierzu wird ein Mehr-Ebenen-Modell geschätzt, welches die Betrachtung eines Unternehmens in dessen jeweiligem Landeskontext ermöglicht; dazu werden Unternehmens- und Ländercharakteristika als erklärende Variablen herangezogen. In dieser Analyse wird Flexibilität weit gefasst. In diesem Sinne wird Arbeitsmarktflexibilität als eine Methode verstanden, die sowohl den Bedürfnissen der Arbeitnehmer als auch der Arbeitgeber Rechnung tragen kann. Zusätzlich wird der 'flexible firm'-Ansatz aufgegriffen und unterschiedliche Optionen für Flexibilitätspolitiken werden jeweils als Bündel unterschiedlicher Arrangements mit ähnlichen spezifischen Wirkungsweisen gesehen und nicht als voneinander getrennte Ansätze. Darauf aufbauend wird der Unterschied zwischen Ländern mit einer eher arbeitnehmerorientierten flexiblen Arbeitszeitregelung und Ländern, in denen die Flexibilitätspraxis eher unternehmensorientiert ist, erklärt. Die verwendeten Daten beruhen auf dem 'European Establishment Survey of Working-Time and Work-life Balance (ESWT)' der Europäischen Stiftung zur Verbesserung der Lebens- und Arbeitsbedingungen in Dublin. Diese Erhebung umfasst für die Jahre 2004/2005 über 21.000 Unternehmen in 21 EU-Mitgliedsstaaten. Die Ergebnisse der Analyse zeigen, dass institutionelle Regelungen wie Kündigungsschutzregelungen oder die Zentralisierung von Tarifverhandlungen tatsächlich die Unterschiede zwischen Ländern bezüglich der Varianz von Arbeitszeitregelungen erklären. Hinzu kommt, dass sich in den Ländern, in denen Unternehmen eher arbeitnehmerfreundliche und weniger unternehmensorientierte Arbeitszeitmodelle anwenden, eher stärkere Gewerkschaften finden lassen. Weitere Erklärungen für Unterschiede bei Arbeitszeitregelungen zwischen den Ländern sind die Situation auf dem Arbeitsmarkt und wirtschaftsstrukturelle Faktoren wie der Grad der Deindustrialisierung oder der Arbeitsmarktpartizipation von Frauen. Als Fazit kann festgestellt werden, dass für eine arbeitnehmerorientierte Flexibilität institutionelle Regelungen wichtiger sind, wohingegen für unternehmensorientierte Flexibilitätspolitiken die wirtschaftliche Lage und die Lage auf dem Arbeitsmarkt die treibenden Kräfte sind." (Autorenreferat

Do institutions matter? Explaining the use of working time flexibility arrangements of companies across 21 European countries using a multilevel model focusing on country level determinants

This paper explores the reasons behind the differences in the use and provision of different types of working time flexibility options of companies across European labour markets with a special focus on the country differences. Competing theories on the cross-country variances of labour market flexibility are tested to examine whether labour market institutions are the driving forces of working time flexibility practices in comparison to other factors such as economic, labour market structures and cycles. It uses a multi-level model which enables examination of companies in the context of the country in which it is embedded, while including both company and country level characteristics in the explanatory model. In this paper, the issue of flexibility is addressed broadly, thus, it perceives labour market flexibility as a method used for the needs of employees as well as for those of employers. In addition, the flexible firm approach is taken and various flexibility options are considered to be bundles of arrangements with similar latent characteristics and not as separate entities. Based on this, the paper explains the differences between countries where there are more worker-oriented working time flexibility options to those where flexibility practices are more companyoriented. -- In der vorliegenden Analyse werden die Hintergründe für den unterschiedlichen Einsatz verschiedener Modelle zur flexiblen Arbeitszeitgestaltung von Unternehmen in europäischen Arbeitsmärkten untersucht. Das besondere Interesse liegt auf den Unterschieden zwischen den einzelnen Ländern. Dabei werden konkurrierende Theorien über Varianzen der Arbeitsmarktflexibilität zwischen den Ländern getestet um zu untersuchen, ob institutionelle Arbeitsmarktregelungen die treibenden Kräfte für unterschiedliche Anwendungen flexibler Arbeitszeiten sind verglichen mit anderen Einflussfaktoren wie bspw. Arbeitsmarktstrukturen und Konjunkturzyklen. Hierzu wird ein Mehr-Ebenen-Modell geschätzt, welches die Betrachtung eines Unternehmens in dessen jeweiligem Landeskontext ermöglicht; dazu werden Unternehmensund Ländercharakteristika als erklärende Variablen herangezogen.

Different paths towards Flexibility, Deregulated employment protection or temporary employment?

There are numerous debates on the need to increase flexibility through deregulation of employment protection. Many believe it is essential in generating employment but it is also believed to generate �socially unacceptable� flexible jobs. However, recent studies point to strict regulations on firing permanent workers as the cause of increase in the shares of temporary employment. In other words, stringent protective regulations are not only a source of rigidity, but also force employers to increase flexibility in the labour market through other means. This study explores this hypothesis by examining various aspects of employment protection legislation in concomitance with other competing factors, including structural changes and labour market institutional factors, to explain the cross-national variance of temporary employment across 19 OECD countries using quantitative data. The results show that high cost of firing workers on permanent contracts is the most important factor that explains the high shares of temporary employment. This implies that there are two different ways in which flexibility has been introduced. Either introducing flexibility throughout the labour market using relaxed regulations on firing regular workers, or securing the core workers with high firing cost for regular workers while allowing for flexibility through the use of temporary employment.labour market flexibility; temporary employment; EPL (employment protection legislation); OECD countries; cross-national comparative studies; employment regimes

New Forms of Dualization? Labour Market Segmentation Patterns in the UK from the Late 90s Until the Post-crisis in the Late 2000s

There has been an increase in literature that examines the patterns of dualization in labour markets across different welfare states. However, rarely do these studies empirically explore how labour markets are divided. Rather they assume a certain type of division to exist in a market, and apply this assumption to measure the extent to which this division can be observed. This paper aims to overcome this limitation by examining the labour market dualization patterns of the UK’s employed population over the past decade through a latent class analysis model. Our analysis shows that the UK labour market could be characterised by a three group system during the period between 1999 and 2010. This divide supports the theoretical literature on labour market divisions in that there are clear distinctions between those who are insiders and those who are not. However, what is interesting is that rather than having a dichotomised pattern of division of insiders and outsiders, we find a third group which can be characterised as a “future insecure” group. What is more, the main characteristics that divide the groups are not contract types (involuntary part-time or temporary employment), but rather income levels (low pay), occupational profile (low-skilled occupations) and social security benefits stemming from employment (occupational pension coverage). From the results, we conclude that the patterns and characteristics of labour market divisions may not be generalised and further empirical investigations are needed to understand the cross-national variations

Special Issue: Subjective Insecurity and the Role of Institutions

The issue of social insecurity is high on the public and scientific agenda. Most research, however, looks at objective forms of insecurity like growing labour market volatilities or atypical employment. Less has been done with regard to the way people perceive these changes and the role of institutions therein. While recent studies have highlighted the relatively weak role of institutions in explaining different levels of subjective insecurity, they were limited in their understanding in the institutions–security interplay. This special issue aims to understand how institutions generate and moderate the outcomes of subjective insecurity, as well as to overcome some of the methodological limitations of previous studies. The introduction provides a state-of-the-art literature review and unfolds the research question addressed in the special issue. It concludes with some thoughts for future research in the field of social insecurity and institutions

Gender discrepancies in the outcomes of schedule control on overtime hours and income in Germany

Schedule control can have both positive – e.g., increased income – but also negative outcomes – e.g., increased overtime. Here our core interest is whether there are gender discrepancies in these outcomes. Given the different ways in which schedule control can be used, and perceived to be used by men and women, their outcomes are also expected to be different. This is examined using the German Socio-Economic Panel Study (2003-2011), and panel regression models. The results show that schedule control is associated with increases in overtime and income – but only for men. Women in full-time positions also increase their overtime hours when using schedule control yet they do not receive similar financial rewards. The results of this study provide evidence to show that increases in schedule control has the potential to traditionalise gender roles by increasing mainly men’s working hours, while also adding to the gender pay gap

Introduction to Special Issue: Subjective Insecurity and the Role of Institutions

The issue of social insecurity is high on the public and scientific agenda. Most research, however, looks at objective forms of insecurity like growing labour market volatilities or atypical employment. Less has been done with regard to the way people perceive these changes and the role of institutions therein. While recent studies have highlighted the relatively weak role of institutions in explaining different levels of subjective insecurity, they were limited in their understanding in the institutions–security interplay. This special issue aims to understand how institutions generate and moderate the outcomes of subjective insecurity, as well as to overcome some of the methodological limitations of previous studies. The introduction provides a state-of-the-art literature review and unfolds the research question addressed in the special issue. It concludes with some thoughts for future research in the field of social insecurity and institutions