Welfare and Employment: A European Dilemma?

The majority of the Member States of the European Union have undertaken remarkably comprehensive welfare and labor market reforms in the years since the 1990s. Many of these reforms, however, have not followed the conventional retrenchment and deregulation recipes, but rather took a liking to social pacts, activation, active ageing/avoidance of early retirement, part-time work, lifelong learning, parental leave, gender mainstreaming, flexicurity (balancing flexibility with security), reconciling work and family life. At first sight, these reforms seem to have resulted in relatively robust employment growth, especially for women and more recently older workers. European economic integration has fundamentally recast the boundaries of national systems of employment regulation and social protection, both by constraining the autonomy for domestic policy options but also by opening opportunities for EU-led social and employment coordination and agenda setting.labor market reforms, European integration, welfare states

Whatever Happened to the Bismarckian Welfare State? From Labor Shedding to Employment-Friendly Reforms

The paper challenges the widespread view that Bismarckian countries with a strong role of social insurance and labor market regulation are less successful than other employment regimes and hard to reforms. This has been true about a decade ago. But both the institutional set-up and the performance of BIsmarckian countries have changed fundamentally over the last years. The paper summarizes major reform dynamics in Bismarckian welfare states which had adopted a strategy of labor shedding in the 1970s and 1980s to combat open unemployment. As this was associated with an increasing burden of non-wage labor costs, this triggered a sequence of more employment-oriented and more fundamental reforms that eventually helped overcome a low employment situation. The paper pursues the trajectory of reforms, shows the structural change in labor market performance and points out the achievements of past reforms, but also emphasizes the need for further action in terms of education and training, activation and employment opportunities for all working age people in these countries so that flexibility and security can be reconciled.employment, Bismarckian welfare states, social insurance, social policy, labor market policies

Reforming German Labor Market Institutions: A Dual Path to Flexibility

Germany has always been one of the prime examples of institutional complementarities between social insurance, a rather passive welfare state, strong employment protection and collective bargaining that stabilize diversified quality production. This institutional arrangement was criticized for being the main cause of inferior labor market performance and increasing fiscal pressure on the welfare state while at the same time inhibiting institutional change. However, over the last 15 years, a sequence of institutional reforms has fundamentally modified the functioning of the German labor market and increased both flexibility and job creation capacities through two intimately linked processes that redefined the line between inactivity, the flexible and the standard segment of the labor market. On the one hand, policy changes facilitated the expansion of flexible or 'atypical' jobs, whereas increasing flexibility of the standard employment relationship resulted from wage moderation and working time flexibility. While at the outset of this reform sequence German had a small, but relatively egalitarian labor market, the number of jobs, but also their diversity has increased.Germany, labor market reforms, atypical employment, standard employment relationship

And Then There Were Four ...: How Many (and Which) Measures of Active Labor Market Policy Do We Still Need? ; Finding a Balance after the Evaluation of the Hartz Reforms in Germany

Through the Hartz reforms, German active labor market policy was fundamentally restructured and has since been systematically evaluated. This paper reviews the recent evaluation findings and draws some conclusions for the future setup of active labor market policies in Germany. It argues in favor of a reduced range of active labor market policy schemes focusing on programs with proven positive effects (that are wage subsidies, training, start-up grants and placement vouchers) and calls for a systematic evaluation of all instruments not scrutinized so far.Active labor market policy, Germany, evaluation

The interaction of labor market regulation and labor market policies in welfare state reform

"Employment protection legislation, unemployment benefits and active labor market policy are Janus-faced institutions. On the one hand they are devices of insurance against labor market risk that provide income and employment security. On the other hand they influence the capacities of labor markets to adapt to changing economic conditions since institutional features of the welfare state also affect actors' economic adaptation strategies. Insufficient labor market adaptability results in higher and more persistent unemployment. Hence, in order to increase the adaptability of European labor markets, reforms had to address these closely interacting policy areas. The first aim of the paper is to describe recent reforms of employment protection, unemployment insurance and active labor market policies in different European welfare states (Denmark, Sweden, the United Kingdom, Switzerland, the Netherlands, Spain and Germany). The paper shows whether and to what extent national policy patterns converge in the direction of a new balance of flexibility and security with employment protection being eased and labor market policies being 'activated' through a combination of 'carrots and sticks'. Secondly, in terms of the political economy of welfare state reforms, the paper will answer the question whether consistent reforms of the three institutions are more likely in political systems characterized by relative strong government and/or social partnership since such institutional prerequisites may favor 'package deals' across policy areas." (Author's abstract, IAB-Doku) ((en))aktivierende Arbeitsmarktpolitik, Sozialpolitik - Reform, Sozialstaat - internationaler Vergleich, Arbeitsschutzpolitik, Beschäftigungssicherung, Arbeitslosenunterstützung, Sozialstaat, Regulierung, institutionelle Faktoren, politisches System, politischer Wandel, Dänemark, Schweden, Großbritannien, Schweiz, Niederlande, Spanien, Bundesrepublik Deutschland

Vom kranken Mann zum Vorbild Europas: Kann Deutschlands Arbeitsmarkt noch vom Ausland lernen?

In den letzten zwanzig Jahren hat die Bedeutung internationaler Vergleiche für die Bewertung der Arbeitsmarkt- und Sozialpolitik deutlich zugenommen. Weniger eindeutig ist jedoch die Frage zu beantworten, ob und unter welchen Bedingungen von ausländischen Erfahrungen für die Gestaltung von Arbeitsmarkt- und Sozialstaatsreformen gelernt werden kann. Skepsis ist angebracht, was die Übertragbarkeit einzelner Politikinstrumente oder gar von tradierten Grundprinzipien anderer Staaten anbetrifft. Auch legt der Blick auf jüngste internationale Arbeitsmarktentwicklungen Zurückhaltung nahe: Galt Deutschland noch Anfang der 2000er Jahre vielen als beschäftigungspolitischer Dauerpatient, ist das Land aktuell in eine Vorbildrolle gerückt, so erfolgreich hat die Bundesrepublik die letzte weltweite Finanz- und Wirtschaftskrise bis heute gemeistert. Ein Zwischenfazit zur deutschen Reformpolitik aus der Perspektive der international vergleichenden Arbeitsmarktforschung zeigt jedoch auch, dass vor allem auf den Handlungsfeldern von Erwerbsbeteiligung und Bildungspolitik dennoch ein erkennbarer deutscher Nachholbedarf fortbesteht.Deutschland, Arbeitsmarkt, internationaler Vergleich, Benchmarking, Beschäftigungspolitik

Gleicher Lohn für gleiche Arbeit am gleichen Ort? : die Entsendung von Arbeitnehmern in der Europäischen Union (Equal pay for equal work in the same place? * the posting of workers in the European Union)

"Based on the example of the posting of workers in the construction industry, this paper examines what impact the opening up of the European Single Market for services has had on an industry that was protected in the past against international competition. It is shown how different institutional framework conditions in individual EU states lead to location competition also in the services sector. In a second step the study analyses how attempts have been made at European and national level to re-regulate the legislation applicable to posted workers. Starting out from a situation of legal uncertainty, countries with high labour costs attempted at national level to reduce the cost advantage of foreign producers by extending their respective minimum standards to cover posted workers. Diverging solutions emerge depending on the constellation of the political economy and on the institutional repertoire. These national regulations anticipated the effects of a Community law solution that was able to be adopted subsequently as a framework directive. It protects the national regulations legally without making substantial interventions. Whilst the European law regulation is 'gentle on the autonomy' in this sense, the national regulations on the posting of workers had to be 'acceptable to the Community'. Especially in Germany this led to modifications in the collective bargaining system in the construction industry. Finally the paper also shows that a regulation aimed at protecting an industry that is exposed to competition can not halt decline or structural change." (Author's abstract, IAB-Doku) ((en))Arbeitnehmerentsendegesetz, Baugewerbe, ausländische Arbeitnehmer, EU-Binnenmarkt, Regulierung, Rechtsvereinheitlichung, EU-Osterweiterung - Auswirkungen, ökonomische Faktoren, internationaler Wettbewerb, internationale Zusammenarbeit, Lohnpolitik, Lohnhöhe, europäische Integration, Europäische Union

The Use of Flexible Measures to Cope with Economic Crises in Germany and Brazil

This study gives a comparative overview of labor market dynamics and institutional arrangements in Germany and Brazil with particular emphasis on industrial relations, wage setting, unemployment benefits, employment protection and vocational training. The paper shows that institutions determine the mode of adjustment to changing economic conditions and the role of standard vs. non-standard contracts. Whereas internal flexibility via shorter working time was a dominant mode of adjustment during the 2008-09 crisis in the German manufacturing sector, in Brazil such plant-level flexibility to avoid dismissals was less prominent.dismissal protection, working time, labor market flexibility, Germany, Brazil

What have we learned? Assessing labor market institutions and indicators

"Over the last decade, both the availability of quantitative indicators on labor market institutions and of studies trying to explain differences in national labor market performance through institutional variables have burgeoned significantly. It is now time to review these indicators and the empirical findings. Therefore, this paper has a threefold objective: first, we provide an overview of the aggregate indicators of core labor market institutions such as employment protection, the generosity of the benefit system, active labor market policies, taxation and collective bargaining. We assess the reliability of selected indicators. Second, we review the most relevant macro-econometric studies that made use of these indicators in order to explain diverging patterns of national employment performance. Third, and finally, this paper draws some preliminary conclusions regarding the further development of aggregate indicators and possible directions for future empirical research." (Author's abstract, IAB-Doku) ((en))Arbeitsmarktpolitik, institutionelle Faktoren, Arbeitsmarktindikatoren, Kündigungsschutz, Arbeitslosenversicherung, Arbeitslosenunterstützung, Leistungshöhe, arbeitsmarktpolitische Maßnahme, Tarifverhandlungen, Steuerpolitik, Reliabilität, Arbeitsmarktforschung, empirische Forschung, Arbeitsmarktentwicklung - internationaler Vergleich, Arbeitslosenquote, OECD

The Impact of the Crisis on Employment and the Role of Labour Market Institutions

The paper takes a comparative perspective on the labour market impact on G20 and EU countries of the financial and economic crisis that began in 2008. It starts from the observation that the decline in employment and rise in unemployment in relation to output or GDP reductions varies significantly across countries. It examines the impacts from an institutional perspective taking into account different channels of external, internal and wage flexibility determined by both the institutional arrangements in place before the crisis and discretionary reforms implemented during the crisis. Emphasis is placed on the role of permanent and temporary jobs, working time adjustment, wage flexibility and active and passive labour market policies. The paper shows that, at least for the time being, unemployment increases have been contained in countries with comparatively strong internal flexibility. At the same time, however, it appears that the crisis has – at least in some cases – contributed to a further dualization of labour markets given that risks are allocated unequally across types of employment.crisis, employment, EPL, institutions, dual labour markets, flexibility