Towards Consistent Principles of Flexicurity

The paper contains analysis of, critical remarks on, and constructive suggestions to Towards Common Principles of Flexicurtity of the European Commission (2007). The latter promotes relaxing the employment protection legislation while providing advances in employment and social security for flexible workforces, like fixed-term, part-time and agency workers, or self-employed. The default assumption, that relaxing labour laws can be compensated by these advances, is criticised as the compensating measures are regarded as vague and insufficient. Therefore, some additional measures are proposed to counterbalance the actual flexibilisation of employment relations, including (1) flexinsurance, a kind of progressive flexibilisation tax, meaning that the employer's contribution to social security should be proportional to the flexibility of the contract/risk of becoming unemployed, (2) elements of the basic minimum income model, (3) workplace tax for worse working conditions of atypically employed which should protect 'the working environment' in the same way as the green tax protects the natural environment, and (4) constraining financial markets. It is argued that all of these meet interests of social partners and solve contradictions between several European policies. --

Liberal and trade-unionist concepts of flexicurity: Modelling in application to 16 European countries

The notion of flexicurity was introduced in the late 1990s. It promotes the idea of compensation of deregulation of labour markets (= flexibilization) by advantages in employment and social security, in particularly for flexibly employed (other than permanent full-time, called also atypically employed). This paper suggests an operational definition of flexicurity, taking into account different views of liberals and trade unions. The corresponding flexicurity indices are derived from (a) data on the dynamics of employment types, (b) scores of the strictness of employment protection legislation provided by the OECD, and (c) qualitative juridical data on social security. To convert the latter into numbers, eight employment types (permanent full-time, fixed- term part-time, etc.) in 16 European countries are ranked with respect to their eligibility to five social security benefits (unemployment insurance, public pensions, etc). To avoid known shortages of ranking, the Method of Total Ranks is proposed. The ranks replace continuous variables as index entries, and a dedicated model estimates the total index error which results from such an `ordinal rounding' of the index input. The flexicurity indices are calculated for 16 European countries for the years 1994-2003. Contrary to theoretical opinions, the current deregulation of European labour markets is not compensated by improvements in the social security. If the flexicurity advantages/disadvantages are accounted proportionally to the size of affected groups then the factual trends are negative even from the viewpoint of liberals, to say nothing of trade unions. The reciprocity of the advantages/disadvantages turns out to be illusory, because gains are smaller than losses and winners are fewer than losers. Thereby the study warns against promoting flexicurity policies with no operational control and empirical feedback. --Flexicurity,employment security,social security,employment protection legislation,European Union,statistical indices

Evaluation of Parties and Coalitions After Parliamentary Elections

Five leading German political parties and their coalitions are evaluated with regard to party manifestos and results of the 2005 parliamentary elections. For this purpose, the party manifestos are converted into Yes/No answers to 95 topical questions (Relax the protection against dismissals? Close nuclear power plants? etc.). On each question, every party represents its adherents as well as those of the parties with the same position. Therefore, a party usually represents a larger group than its voters. The popularity of a party is understood to be the percentage of the electorate represented, averaged on all the 95 questions. The universality of a party is the frequency of representing a majority of electors. The questions are considered either unweighted, or weighted by an expert, or weighted by the number of GOOGLE-results for given keywords (the more important the question, the more documents in the Internet). The weighting however plays a negligible role because the party answers are backed up by the party ``ideology'' which determines a high intra-question correlation. The SPD (Social-Democratic Party) did not receive the highest percentage of votes, remains nevertheless the most popular and the most universal German party. A comparison of the election results with the position of German Trade Union Federation (DGB) reveals its high representativeness as well. Finally, all coalitions with two and three parties are also evaluated. The coalition CDU/SPD (which is currently in power) is the most popular, and the coalition SPD/Green/Left-Party (which failed due to personal conflicts) is the most universal.Parliamentary Election, Fractions, Coalitions, Theory of Voting, Mathematical Theory of Democracy, Indices of Popularity and Universality, German Trade Union Federation (DGB)

On the European readiness for flexicurity: Empirical evidence with OECD/HBS methodologies and reform proposals

The Fourth European Working Conditions Survey (European Foundation 2007) is used to investigate the readiness of Europe to flexicurity labour market reforms proposed by the European Commission (= flexibilization of employment relations compensated by improvements in employment security backed up by lifelong learning). For this purpose, composite indicators of flexibility, precariousness and decentness of work are constructed with the OECD and HBS (Hans Boeckler Stiftung) methodologies which differ in scaling. Then the indices are visualized with specially designed tabular graphs and analysed. Both methodologies give quite similar results. It is revealed that (1) factual flexibility (as it is practiced) radically differs from institutional flexibility (prescribed by employment protection legislation), (2) flexibility and precariousness of work correlate with statistical certainty, moreover, no country combines high flexibility and low precariousness; (3) flexibilization has the strongest negative effect on employability; (4) there is an acute shortage of learning options, (5) learning makes a negative impact on job satisfaction, at the same time job stability is top esteemed, but not income which is ranked only 6th, and (6) working conditions of flexibly employed is worse than of normally employed, being even below the European average. It implies that the Commission's conception of flexicurity, neglecting the socio-economic reality, can be hardly efficient and successful. Therefore, an alternative implementation of flexicurity is proposed in the form of flexinsurance which assumes that the employer's contribution to social security should be proportional to the flexibility (precariousness) of the employment contract. To stimulate employers to equalize working conditions of normal and atypical employees, it is proposed to introduce a workplace tax for bad working conditions which should protect 'the working environment' in the same way as the green tax protects the natural environment. --

European welfare state under the policy "make work pay" : Analysis with composite indicators

The social security systems in 22 European countries are evaluated with a specially constructed indicator. It is based on a census-simulating model which combines both empirical (statistical) and normative (rule-based) approaches. The individual answers of unemployed on social security benefits are normatively derived from their personal situations with the OECD Tax-Benefit Models. The empirical data about personal situations are available from EuroStat. The goal is estimating the national average of net replacement rates (NRR) for unemployed persons. Such an indicator of social security shows the average degree with which social benefits compensate the loss of previous earnings. Thus, the paper suggests: -(Methodology) a model of census simulation combining statistical data on the population with individual answers computed with a rule-based model, -(Indicator) an integral quantitative evaluation of social security in Europe, which reveals its total decline by 2004 contrary to institutional improvements, -(Analysis) an explanation of the decline by a structural change of European labour markets with rapidly growing `atypical' employment groups (= part-time, temporary, self-employed, etc.) with a lower eligibility to social benefits than normally employed (= permanently full-time), -(Policy implications) a possible resolution of European policy contradictions by the "basic income model" with "flexinsurance". --Composite indicators,social security,European welfare state,European Union,"make work pay" policy

Flexibility - flexicurity - flexinsurance: response to the European Commission's Green Paper "Modernising labour law to meet the challenges of the 21st century"

"In der europäischen Beschäftigungsstrategie stehen quantitative und qualitative Beschäftigungsziele gleichberechtigt nebeneinander. Andererseits gibt es die weit verbreitete These, dass beide Ziele in einem Spannungsverhältnis stehen und jedes einzelne nur zulasten des anderen verfolgt werden kann. Der vorliegende Beitrag zeigt am Beispiel der beschäftigungspolitisch erfolgreichen nordischen Länder, dass dieser trade-off nicht generell gültig ist. Gerade diese Länder schneiden im Vergleich der Arbeitsbedingungen nämlich besonders gut ab. Anhand von 15 Teilindikatoren bilden die Autoren einen Gesamtindikator zur Qualität der Arbeit, mit dem Arbeitsbedingungen in 31 europäischen Ländern verglichen werden können. Auf dieser Basis kann gezeigt werden, dass die nordischen Länder ein Cluster guter Arbeitsbedingungen bilden, dass sich signifikant und positiv vom Gesamtdurchschnitt und noch stärker von Deutschland unterscheidet. Zudem belegen die Auswertungen, dass sich die Qualität der Arbeit zwischen Frauen und Männern sowie zwischen atypischen und Normalarbeitsverhältnissen unterscheidet, allerdings mit schwächeren Unterschieden auf höherem Niveau in den nordischen Ländern. Insgesamt ergeben sich Hinweise, dass offenkundig Spielraum zur Verbesserung der Arbeitsbedingungen besteht." (Autorenreferat)"In European employment strategies both quantitative and qualitative employment targets are of equal importance. On the other hand there is a widespread theory that there is tension between the targets and one can only be pursued at the expense of the other. Examining the example of the successful labour policies of the Nordic countries this article shows that this theory is not generally applicable. It is exactly these Nordic countries that do particularly well in a comparison of labour conditions. The authors set up an index of the quality of labour, based on 15 indicators which can be used to compare labour conditions in 31 European countries. On this basis it can be seen that the Nordic countries form a cluster of good working conditions that are significantly more positive than the average and more positive than in Germany. In addition, the evaluations reveal that the quality of work differs between men and women, as do atypical and normal working relationships, but with less differences at the higher level in Nordic countries. All in all, there are indications that there is room to improve working conditions." (author's abstract

An econometric decision model for equalizing regional unemployment in West and East Germany

"Reducing disparities among regions within European countries is the aim of European and national structural policies. In particular, a European grant contributes to the German governmental program for equalizing regional unemployment. The goal is to bring it down to the national average by creating new and/or by safeguarding existing jobs. In the given paper the distribution of available aid among 271 German labor market regions is considered as an econometric decision problem. At first, the dependence of the unemployment rate on the amount of aid is estimated for each eligible region. Using this dependence, the variance of regional unemployment rates is expressed as a function of the regional subsidies. The optimal aid distribution among regions is obtained by minimizing this variance subject to the total budget constraint and administrative restrictions. The optimal figures computed are compared with statistical data for 2000-2002. They show that the regional unemployment in West Germany could be equalized better (with variance 3.50 against the actual 4.40) and with a simultaneous decrease in the average unemployment in West Germany from 7.45 to 7.28%. In East Germany all regions are eligible, implying no administrative constraints and a high optimization flexibility. It enables almost perfectly equalize regional indices down to the variance 0.28 against the actual 9.76. Under the model assumptions, the actual results of the equalizing policy could be attained by half the budget granted. These underused possibilities explain the low efficiency of active labor market policies reported in empirical studies. To improve their performance, some tools for optimally distributing subsidies and predicting their effects are suggested." (author's abstract

European flexicurity: concepts (operational definitions), methodology (monitoring instruments), and policies (consistent implementations)

"The notion of flexicurity promotes the idea of compensation of labour market deregulation (flexibilization) with advantages in employment and social security. The paper contains a brief history of the concept and its operational definition. To monitor effects of flexicurity policies in Europe, flexicurity indicators are constructed. The European flexicurity polices are analyzed in the neo-liberal perspective, from the trade-unionist viewpoint, and within the conception of European welfare state. The empirical investigation shows that, contrary to political promises and theoretical considerations, the deregulation of European labour markets is absolutely predominating. A contradiction between several European employment policies is suggested to surmount by introducing a so called flexinsurance, meaning that the employer's contribution to social security should be proportional to the flexibility of the contract/ risk of becoming unemployed in conjunction with elements of the basic minimum income model." (author's abstract)"Das Konzept Flexicurity umfasst die Kompensation der Arbeitsmarktderegulierung (= Flexibilisierung) durch Fortschritte in der Beschäftigungssicherheit und sozialen Sicherheit. Um die Flexicurity-Politiken in Europa nachzuvollziehen, werden Flexicurity-Indikatoren entwickelt. Die europäischen Flexicurity-Politiken werden in der neo-liberalen Perspektive, vom gewerkschaftlichen Standpunkt und im Rahmen der Konzeption des europäischen Wohlfahrtsstaates analysiert. Die empirische Studie zeigt, dass entgegen politischer Versprechungen und theoretischer Betrachtungen die Deregulierung der europäischen Arbeitsmärkte absolut dominiert. Um den politischen Widerspruch zu beseitigen, wird eine so genannte Flexinsurance (Flexicurity-Versicherung) vorgeschlagen. Der Beitragsanteil des Arbeitgebers zu den sozialen Kassen soll proportional zu der Flexibilität des Arbeitsvertrages und dem entsprechenden Risiko der Arbeitslosigkeit gebildet werden." (Autorenreferat

Flexicurity: Reconciling Social Security with Flexibility - Empirical Findings for Europe

It is empirically shown that the more flexible employment, the more it is precarious. For this purpose, two families of indices, of flexible work and of precarious work, are defined basing on the Fourth European Survey of Working Conditions 2005 by the European Foundation for the Improvement of Living and Working Conditions. Two methodologies of constructing composite indicators are applied, of the Hans Böckler Foundation, and of the OECD. Both methodologies give very similar results. After the indices have been constructed, the dependence between flexibility and precariousness of work is established by regression analysis with statistical certainty. Besides, it is revealed that the institutional regulation of employment does not necessarily imply the adequate factual effect. For instance, Turkey and Greece with a strict employment protection legislation have a high labour market flexibility due to a large fraction of employees who work with no contract. Among other things, it is shown that the employment flexibility has the strongest negative effect on the employability. It implies serious arguments against the recent reconsideration of the function of social security attempted by the European Commission within the flexicurity discourse. The suggested shift from income security towards a high employability cannot be consistently implemented. Our study provides empirical evidence that a high employability can be hardly attained under flexible employment. --Flexicurity,labour flexibility,precarious work,composite indicators,European Commission,European Employment Strategy

Globalization and deregulation : Does flexicurity protect atypically employed?

Hitherto, discussion of flexicurity has focused on normal employment (permanent full-time), with atypical work receiving only cursory attention. Nevertheless, the most affected are just atypically employed (= other than normally employed). To monitor effects of flexicurity policies in Europe, flexicurity indices are constructed from: (a) scores of the strictness of employment protection legislation provided by the OECD, (b) qualitative juridical data on social security benefits (unemployment insurance, public pensions, etc.), and (c) data on the dynamics of employment types (permanent, temporary, full-time, part-time, self-employed, etc.). The empirical investigation shows that, contrary to political promises and theoretical opinions, the deregulation of European labour markets absolutely predominates. Its moderate compensation by advantages in social security occurred only twice: in Denmark and Netherlands at the end of the 1990s. The flexibilization reduces the average employment status, i.e. employees are more often employed not permanently but temporarily, not full-time but part-time, and more frequently they involuntary turn to self-employment. On the other hand, the eligibility to social benefits depends on the employment status. Thereby these trends disqualify employees from social benefits. The apparent compensation of the labour market deregulation by social advantages is therefore insufficient. --flexicurity,labour market flexibility,atypical employment,social security,composite indicators