Implementation and Assessment of Flexicurity Policies in Germany

Thèse de Master , 2023 , 80 Pages , Note: 1,0

Economie politique - Economie du marché du travail

The thematic framework of the thesis, entitled "Implementation and Assessment of Flexicurity Policies in Germany" consists of flexicurity governance in general, in the EU and the concrete implementation in Germany. The aim of the thesis is to examine whether and to what extent the European Employment Strategy has been or is being implemented in the German labor market and with which measures. For this purpose, the following research question served as a basis: To what extent and how has flexicurity - as a political concept and socioeconomic model - been implemented in Germany, and has it been successful in terms of both flexibility and security?

Based on the research question, this thesis is divided into three parts. Starting with general remarks on flexicurity, the argumentation on flexicurity as a European strategy leads to specific remarks on the implementation of flexicurity in Germany. Starting with general remarks on flexicurity, the argumentation on flexicurity as a European strategy leads to specific remarks on the implementation of flexicurity in Germany. The first part discusses the market conditions, the definition(s) and the roots of flexicurity. It establishes both the working definition and clarifies other terms that are important for understanding the rest of the paper. This chapter should be read as an introduction to the subject and is intended to lay the foundation for the next two sections. In the second part, flexicurity is presented as a European employment strategy and its origins, cornerstones and objectives are described. Further developments within other European pillars are briefly outlined. As European flexicurity is made up of different components, these are also summarised here, and developments in relation to the labor market and welfare are briefly sketched out. The final part answers the research question by looking at the concrete implementation of flexicurity in the German labor market and its implications for welfare. The work is mainly based on secondary literature such as laws, programs, statistics, reports and existing literature.

Table of Content

Statutory Declaration

LIST OF FIGURES

LIST OF TABLES

INTRODUCTION
Problemstatement
Research Question
Outlineand Structure

THE PORTRAYAL OF FLEXICURITY AS AN ACADEMIC CONCEPT 8
Changes in Labor Market Conditions; a Glance at the Macro, Meso and Micro Levels.
Internal and External Flexibility
Security
Flexicurity: Strategy or Condition?
As a State ofAffairs
The Analytical Matrix by Wilthagen andTros
The Flexicurity Quadrant by Muffels and Luijkx
As a Strategy or Policy Approach...
Transitional Labor Markets
Internal Flexibility through Job-Securing Collective Bargaining and Company Policies
Lifelong Learning
ReformofthePensionSystem
Initialsteps: Netherlandsand Denmark
Conclusion PartOne

AT EUROPEAN LEVEL: FLEXICURITY AND BEYOND
Goals of European Flexicurity
The Four Components
Flexible and Reliable Contractual Arrangements
Comprehensive Lifelong Learning
Effective Active Labor Market Policy
Social Security Systems
Why did the European Commission Promote Flexicurity?
Flexicurity in the European Semester
Co-Evolutionary Governance
Employment and Social Development in the EU
Conclusion Part Two

FLEXICURITY IN GERMANY
Renewingthe Labor Market, Industrial Relationsand Social Security Schemes
Hartz-Reforms
Contractual Arrangements, Internal and External Flexibilization Measures
Effective Active Labor Market Policies and Comprehensive Lifelong Learning
Modern Social Security Systems
RegulationofLaborRelations
General Conditionsfor Retirement
Development of the German Labor Market and Effects of Labor and Welfare Reforms
Conclusion PartThree

CONCLUSION AND CRITICAL REVIEW

LIST OF REFERENCES

LISTOF FIGURES

Figure 1: The theoretical classification ofcountries and political regimes in theflexicurity guadrant,

Figure 2: The Golden Triangle in Denmark

Figure 3: Employment and activity - annual data

Figure 4: School drop out rate and tertiary educational attainment - annual data

Figure 5: Persons at risk ofpoverty orsocial exclusion - annual data

Figure 6: The use ofshort-term work as an instrument ofinternalflexibility in Germany

Figure 7: Strictness ofemployment protection - individual and collective dismissals

Figure 8: Change in the number ofsubcontracted workers

Figure 9: Development ofemployees in Germany who are exclusively marginally employed in thousands

Figure 10: Strictness ofemployment protection - temporary contracts and regular contracts

Figure 11: Public expenditurefor active labour market policy measures in Germany as percentage ofGDP

Figure 12: Total amounts on selected active labour market policies: Training, sheltered and supported employment and rehabilitation, employment incentives, directjob creation, start-up incentives

Figure 13: Expenditure on active labour market policies by type ofaction in 2019, by country

Figure 14: Adult participation in Learning 2002 - 2021

Figure 15: Net unemployment replacement rate in different years

Figure 16: Development of proportion ofemployees in companies that are bound by a regional collective agreement, prevalence ofin-house collective agreements, proportion ofemployees whose contracts of employment are not governed by a collective agreement

Figure 17: Employment rate, unemployment rate and actual number ofpeople in employment in Germany _

Figure 18: Early leaversfrom education and training and Tertiary educational attainment

Figure 19: Persons at risk ofpoverty or social exclusion in Germany 2009-2020

Figure 20: Poverty and Economic Development in Germany

Figure 21: Poor in terms of work status 2021

LIST OF TABLES

Table 1: Flexicurity as a state,

Table 2: The Common Principles ofFlexicurity

Table 3: The Components ofFlexicurity

Table 4: Net unemployment replacement rate(%) in 2021for a single person without children by duration of unemployment compared to average wage

Notes: Eurostat's annually collected metadata are processed as Indicators and used in various contexts, including monitoring the Europe 2020 and now 2030 targets on poverty and social exclusion and identifying the main social trends in the EU, preparing the European Semester and providing datafor the evaluation ofcountry-specific recommendations; they are also one ofthe indicators used under the European PillarofSocial Rights.

Introduction

The introduction provides the context of this Master's thesis and introduces the author's thoughts to the reader. To this end, the problem statement and research question will be outlined first, followed by a description of the structure, method and objectives of this thesis.

Problem statement

Enterprises are the creators of national wealth and are therefore central to a country's competitiveness. Today's economic and labor market realities - to name but a few: flexibility, globalisation, competition, speed, atypical employment, technological change and crises - pose new challenges for the European Union (EU), its Member States and their respective policy actors. Short-term sales planning, rapid changes in demand and fierce competition mean that companies need to be able to adapt their workforce quickly and flexibly to economic conditions. The standard employment relationship, which for a long time shaped the employment biographies of employees, can nowadays be regarded as outdated.

For many decades, globalisation and the welfare state developed in parallel and together. Since the end of the last century, this complementarity has steadily declined. To be attractive as a business location, governments often have to push through business-friendly reforms such as lower corporate taxes and deregulation, or redirect public spending towards economic rather than social needs. Some of these measures are difficult to reconcile with the social obligations of so-called welfare states (Bluth, 2017; Genschel & Seelkopf, 2015). In order to preserve the principles of the welfare state and to enable new forms of employment to be covered by social security, the European Union has, since the turn of the century, sought to maintain or even increase the level of security for workers by means of general directives. "Flexicurity" as a European employment strategy has become increasingly central to political discourse since the end ofthe last century, as it represents a combination ofthe two incompatible concepts offlexibility and security. In other words, an integrated strategy combining social and economic perspectives. On the one hand, the interests of employers should be taken into account through the flexible use of labor and, on the other hand, the need of workers for security, i.e. the certainty that they will not be unemployed for a long time. Entrepreneurial flexibility is ultimately based on the relaxation ofthe 'normal' employment relationship. It thus corresponds to the strategic need of companies to respond to market fluctuations, but can also include the adaptability and flexibility of companies in the organisation of work and time. The security component of the concept encompasses various aspects of worker protection; this could be provided by the state, for example, through relatively high unemployment benefits and training programs, which is why flexicurity models are also primarily characterised by proactive labor market policies. (Kronauer & Linné, 2005). In 2007, the European Commission finally adopted its flexicurity guidelines to help EU countries reduce unemployment and increase the quality and quantity ofjobs. (European Commission, 2022a; Kronauer & Linné, 2005, p. 9). A framework with different pillars was developed at EU level and common core objectives were formulated. According to these guidelines, the modernisation of the labor market and social systems within the framework offlexicurity concepts is based on fighting poverty, securing employment, promoting equality and supporting lifelong learning. Due to the diversity of the individual Member States, they were given a free hand in the implementation at national level. (European Commission, 2010, pp. 16-17). Whether this combination of flexibility and security in the sense of welfare states is actually possible, what flexicurity means and to what extent this employment strategy is implemented in Germany is the subject ofthis master's thesis. The research question underlying the thesis is presented below.

Research Question

The thematic framework ofthe master's thesis, entitled "Implementation and Assessment of Flexicurity Policies in Germany" consists of flexicurity governance in general, in the EU and the concrete implementation in Germany. The aim ofthe thesis is to examine whether and to what extent the European Employment Strategy has been or is being implemented in the German labor market and with which measures. For this purpose, the following research question will serve as a basis:To what extent and how hasflexicurity-asa political concept and socioeconomic model - been implemented in Germany, and has it been successful in terms ofbothflexibility and security?

The research question and paper are structured in such a way that answering them does not take more than the given 12,000-17,000 words. For reasons of limited scope, flexicurity measures in other European Member States are not discussed, apart from a brief historical sketch on the Netherlands and Denmark.

Outline and Structure

Based on the research question, this thesis is divided into three parts. Starting with general remarks on flexicurity, the argumentation on flexicurity as a European strategy leads to specific remarks on the implementation of flexicurity in Germany. The first part discusses the market conditions, the definition(s) and the roots offlexicurity. It establishes both the working definition and clarifies other terms that are important for understanding the rest of the paper. This chapter should be read as an introduction to the subject and is intended to lay the foundation for the next two sections. In the second part, flexicurity is presented as a European employment strategy and its origins, cornerstones and objectives are described. Further developments within other European pillars are briefly outlined. As European flexicurity is made up ofdifferent components, these are also summarised here, and developments in relation to the labor market and welfare are briefly sketched out. The final part answers the research question by looking at the concrete implementation offlexicurity in the German labor market and its implications for welfare. The methodological approach to the topic in this work is an analytical-programmatic one. The work is mainly based on secondary literature such as laws, programs, statistics, reports and existing literature. The empirical part of the thesis was deliberately kept small, as it is not really necessary to answer the research question. Due to the abundance of literature and the complexity and adaptability ofthe topic, an empirical treatment is difficult with the existing resources and specifications for the master's thesis. However, in order to bring in life and personal experiences and opinions from different areas, the work will be complemented by qualitative research, several interviews with statements from different actors. The thesis will conclude with its own conclusions and critical reflections.

The Portrayal of Flexicurity as an Academic Concept

In this first part, the reasons forthe emergence offlexicurity, its definition(s) and the understanding of flexicurity for this thesis are presented. In this way, the necessary basic knowledge on the subject is developed for the further line ofargumentation.

Changes in Labor Market Conditions; a Glance at the Macro, Meso and Micro Levels.

The emergence offlexicurity has been preceded by changes in labor market regulation and in the role of key institutions. The reasons for this can be found at different levels. First ofall, towards the end ofthe last century, various societal components such as globalisation, liberalisation, technological progress, demographic changes, female labor force participation and increased labor segmentation converged. These major challenges also affected the European social and economic system, and labor markets came under increasing (competitive) pressure. (European Commission, 2010; Kronauer & Linné, 2005, pp. 99-106; OECD Data, 2022; Tangían, 2004, pp. 9-10). Today's markets are characterised by constant change, higher competitive demands and the mobility ofgoods and services. Increased uncertainty makes flexibility and the ability to respond quickly to change a prerequisite for economic success. This leads to a second level, the level of companies and institutions. The changes in have made the flexibilization of workers' employment relationships a necessity and a key prerequisite for coping with structural change and the ever new challenges in the world of work. This means that companies can only be successful and competitive if they are able to adapt to labor market flexibility trends and adjust their resources and capacities quickly and appropriately. (Kronauer & Linné, 2005, pp. 9-10, 75). At the micro level, in the individual's private and professional life, there is also an increased need for flexibility, on the one hand forthe realisation offurther education plans, and on the other hand for a better reconciliation of family and professional life and a better work-life balance (Keller & Seifert, 2008, p. 23; Seifert & Keller, 2006, p. 2687). In the debate on so-called new forms of work, flexibility is increasingly seen in a positive light, for example as an opportunity for self­development or liberation (see Bergmann, 2019; Jordan, 2018). Ultimately, all these changes at various levels - societal, economic, operational and also in the everyday lives of individuals - have led to a wide range ofdifferent work arrangements. The standard employment relationship, i.e. "permanent, dependent full-time employment subject to social insurance contributions" (Allmendinger et al., 2013, p. 7), is increasingly being replaced by atypical forms of employment. Allmendinger et al. (2013) point out that terms such as "non-standard employment" and "atypical employment" allow for a less judgemental approach to the phenomenon of changing forms of employment. These terms simply express that part-time work, fixed-term contracts, temporary work or (sole) self-employment are not 'normal' forms of employment¹. Nevertheless, it is often assumed that these forms of employment are associated with low pay and limited career prospects, which is not necessarily the case, but is often. The share of employees with low wages is significantly higher in atypical employment. This relates to the level of hourly earnings, especially in marginal and part-time jobs. (Keller & Seifert, 2008, p. 18). However, while regular employment often provides workers with sufficient social protection (because social systems are designed to do so) and helps to reduce social inequalities, atypical employment is characterised by insecurity and precariousness. (Keller & Seifert, 2008, p. 16). Seifert and Tangían (2008, pp. 633-634) found that labor market flexibility is associated with precarious working conditions. While the degree of precariousness increases with measures of increasing external or internal flexibility, they found that the structure of the forms of flexibility also has a decisive impact on the degree of precariousness. Thus, ifflexibilization measures have an impact on precarity, a consideration of social protection is essential in the flexicurity discussion.

Internal and External Flexibility

Generally, internal and external flexibility measures are distinguished.Internal flexibilizationincludes measures that allow work to be adapted by drawing on the company's own labor pool and therefore do not lead to a quantitative change in the workforce. Such adjustments take place within an existing employment relationship. (Keller & Seifert, 2008, pp. 7-12; Kronauer & Linné, 2005, pp. 74-75). There are several ways of achieving internal flexibility. A distinction is usually made between functional, qualitative, numerical and quantitative flexibilization.Internal-numericalflexibilizationis characterized bythe adjustment ofworking time volumes such as short-time work or time accounts.Internal-functionalflexibilization,on the other hand, involves measures to adapt work organization and qualifications through, for example, further training, personnel development or the expansion of employees' areas of responsibility.Internalmonetaryflexibilizationis often used to bridge crises; this applies to opening clauses in collective agreements or company alliances, but can also affect performance-related pay. Ultimately,internal-temporalflexibilizationrefers tothe general adjustment of labor input; for example, through part-time work or marginal employment. ((Keller & Seifert, 2008, pp. 6-8).External flexibilization,on the other hand, is based on those personnel transactions that have an impact beyond the boundaries of the company, i.e. are carried out via the market. This refers to strategies for adjusting the number of employees. In contrast to the internal strategy, external flexibilization tends to focus on short-term cost reduction. (Kronauer & Linné, 2005, p. 74). It also includes several forms, such asexternal-numericalflexibilization,which involves the adjustment ofstaffthrough hiring and firing and, in general, atypical forms of employment such as fixed-term or labor leasing.External-functionalflexibilizationencompassesthe labor policy function oftransfer companies in the placement of employees threatened by unemployment. And finally, theexternal-monetaryflexibilizationstrategy for adjusting labor costs, for example, through wage subsidies or subventions. (Keller & Seifert, 2008, pp. 6-8). In general, external flexibility strategies tend to have a worse reputation than internal measures. On the one hand, because of the unfavourable working conditions for employees and, on the other hand, because of its short-term nature, it is said that it can also have a negative impact on the innovation capacity and, in the longer term, on the competitiveness of companies. (Kronauer & Linné, 2005, p. 74).

Security

In the event of periods ofabsence due to illness, unemployment or old age, welfare state models offer a predominantly contribution-financed safety net and thus serve as a substitute for income for those affected (Kronauer & Linné, 2005, pp. 322-323). As social protection falls under the security umbrella, it is important to recognise that the flexicurity debate replaces the notion ofjob security or lifelong employment with the notion of employment security, which refers to the security of remaining in a secure employment relationship throughout one's career, but not necessarily in the same employment relationship with the same employer. The theory behind this is that the modern labor market requires people to move between jobs more frequently. In the context of flexicurity, the main forms of security discussed are those that are closely linked to an individual's ability to be employed or to work. Security in the flexicurity debate therefore consists of the following components Income security, job security, employment security and reconciliation security.(Seifert & Tangían, 2008, p. 628; Wilthagen &Tros, 2004, p. 171).Income securitymeansfinancial security through income replacement, i.e. through unemployment benefits and social assistance or the minimum wage.Job securityrefers first and foremost the protection of employees against dismissal and against significant changes in working conditions, which happens, for example, protection against dismissal and other measures regulated in labor law.Employment securityis the certainty of remaining in employment (not necessarily with the same employer). If it is not possible to find employment commensurate with qualifications and previous working conditions, it includes the possibility of acquiring and maintaining new qualifications. Key areas here are: Education and training and lifelong learning.Compatibility securityincludes the certainty of being able to combine paid work with other social tasks and obligations (e.g. work-life balance, work-family balance, early flexible partial retirement, flexible working hours orvacation options). This is done through childcare measures, parental leave, maternity leave oreducational leave. (Tangían, 2004, p. 17; Wilthagen &Tros, 2003, pp. 7-8). In summary; security is not only about protection from unemployment and job loss, but also about building, maintaining employment, increasing the likelihood of new entry, and progressing within employment at all stages of life (Kronauer & Linné, 2005, pp. 8-9). As social security systems have generally been tied to the standard work model, flexicurity ideas, which combine flexibility and security, not only aim at a reorientation of state institutions, but also challenge the foundations of the welfare state.

Flexicurity: Strategy or Condition?

The artificial word 'flexicurity' is a combination ofthe terms flexibility and security, and although the concept is not new, it is difficult to find a consistent definition offlexicurity in the existing literature. Some scholars see the focus ofthe concept as the empowerment of weaker groups of workers, while others see it more as a response to the economic need to cope with increasing global competition, and therefore more as a means of achieving a deliberate compromise between employers and employees (Tangían, 2004; Wilthagen & Tros, 2004, p. 167-170). However, it is presented in the literature in two main ways: as a particular strategy or policy concept, or as a particular situation in the labor market within narrow definitions of the term (Wilthagen &Tros, 2004, p. 170). Wilthagen and Muffels (2013) therefore separate the term flexicurity into an analytical and a normative/political perspective: flexicurity as a state of the labor market represents the possibility of the analytical perspective (Muffels & Wilthagen, 2013, p. 111).

As a State ofAffairs

... in which the achievement offlexicurity could be the objective.

Therefore, in order to take stock of the implementation of flexicurity, it is necessary to consider flexicurity as a specific state of the labor market. This is the definition proposed by Wilthagen and Tros (2004, p. 170):

„Flexicurity is (1) a degree ofjob, employment, income and 'combination'security that
facilitates the labor market careers and biographies of workers with a relatively weak
position and allowsfor enduring and high quality labor market participation and social
inclusion, while at the same time providing (2) a degree ofnumerical (both external and
internalffunctional and wageflexibility that allowsfor labor markets' (and individual
companies') timely and adequate adjustment to changing conditions in order to maintain
and enhance competitiveness and productivity."

The Analytical Matrix by Wilthagen and Tros

According to this definition, flexicurity can be analyzed in terms of fourforms of flexibility: external/internal numerical, functional and income flexibility, and security: job, employment, income and combination security. Wilthagen and Tros designed an analytical matrix in 2002 (p.171) with the goal of identifying tradeoffs between certain types of flexibility and certain types of security in order to pursue flexicurity policies. These trade-offs can affect individual workers, groups, or entire workforces, industries, or national government systems as a whole, depending on the level at which the trade-offs are made.

Abbildung in dieser Leseprobe nicht enthalten

Table 1: Flexicurity as a state,

own illustration based on: Wilthagen & Tros, 2004, p. 171

The table is useful to get a good overview of these flexicurity measures (e.g. to take stock of their implementation in a country), but it is not possible to determine the degree of flexicurity.

The Flexicurity Quadrant by Muffels and Luijkx

Another analysis tool is the Flexicurity quadrant according to Muffels and Luijkx (2008, p.225), which helps to identify European flexicurity types. For this purpose, the flexibility and security levels of the individual member states were determined and their position established by the two authors on the basis of the axes.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1: The theoretical classification of countries and political regimes in theflexicurity quadrant,

Own illustration based on: Muffels & Luijkx, 2008, p. 225; Muffels & Wilthagen, 2013, p.117

The x-axis shows security (income and employment security, determined by the respective design ofexisting insurance models and active/passive labor market policies) and the y-axis flexibility (level of employment protection, determined through mobility transition and permanent contracts). Muffels and Luijkx (2008) referred to quadrants II and IV as "trade­offs": ¡flexibility is high here, the level ofsocial security suffers, and vice versa. That is, in the upper right-hand corner (quadrant I) are countries with high levels offlexibility and security, and in the lower left-hand corner (quadrant III) are countries with low values in both areas. From this model, the authors Muffels and Wilthagen (2013) derive five European flexicurity types, which, however, also diverge strongly within the different regimes. TheAnglo-Saxoncluster with a negative correlation between flexibility and security: Low employment protection indicates a high level offlexibility in the labor market, while low social benefits and a lack of active labor market policies result in weak employment security and low social protection.Nordicstates achieve a high level of flexibility and security in the model examined. (Muffels & Wilthagen, 2013, p. 118).Continentalcountries are characterized by a relatively high degree of employment protection, active labor market policies, high unemployment benefits and social security benefits. All in all, this leads to a rather low degree offlexibility and mobility in the labor market, but social security in these member states is very high.MediterraneanFlexicurity is characterized by strict employment protection, low unemployment benefits, weak employability and the absence of active labor market policies (Muffels & Luijkx, 2008, p. 225). TheEasternFlexicurity regimes are characterized by low flexibility and low security. Obviously, there are big differences in Europe in terms of the state of the labor market.

As a Strategy or Policy Approach...

...increasingflexibility and security to achieve good labor market and social outcomes.

Flexicurity as a concept or strategy is understood as normative and described as a "metaphor for policies that seek a better balance between flexibility and security."(Muffels & Wilthagen, 2013, p. 111). In 2004, Wilthagen and Tros (p.169) therefore proposed a definition that met with broad approval:

„4 policy strategy that attempts, synchronically and in a deliberate way, to enhance the
flexibility oflabor markets, work organisation and labor relations on the one hand, and to
enhance security - employment security and social security - notablyfor weaker groups in
and outside the labor market, on the other hand."

This is to say that, based on the simultaneous increase of flexibility in the labor market and the reinforcement of security for employees, flexicurity is intended to support particularly weak groups both inside and outside the market. The flexicurity concept is thus based on the idea of being able to achieve mutually beneficial situations for employees and companies alike. On the one hand, flexibility is promoted, while on the other hand, security elements are improved, especially for vulnerable groups of workers. Moreover, it is also seen as a policy that bridges the gap between the opposing poles of unregulated, liberal market economies in the Anglo-Saxon world and the highly regulated, coordinated, or even segmented market economies in continental and southern Europe (Muffels & Wilthagen, 2013, p. 115). At the turn of the millennium, the flexicurity idea was based on the following four concepts: (1) transitional labor markets, (2) strengthening internal flexibility through job-securing collective bargaining and company policies, (3) lifelong learning, (4) reform of the pension system. (Seifert & Keller, 2006, p. 2688).

Transitional Labor Markets

Transitional labor market theories aim to harmonise the barriers between the labor market and unemployment or further training. But they also allow for transitions in other directions, e.g. between full-time and part-time work or between periods of employment and non­employment (e.g. sabbaticals). Smooth transitions between forms of employment enable both the realisation of individual life planning options and the creation of support bridges in the sense of temporary employment opportunities for outsiders to the labor market, thereby improving their employment chances. Policy instruments may include, for example, bridging benefits, short-time work benefits, wage subsidies or job rotation and combination wage schemes. As it contributes to greater flexibility in the labor market, the general objective is to counteract rising unemployment, exclusion and segmentation and to promote social participation and integration. (Seifert & Keller, 2006, p. 2688-2689).

Internal Flexibility through Job-Securing Collective Bargaining and Company Policies

Assuming that firms need to have some degree of flexibility to be able to respond quickly and cost-effectively to external market changes, either forms of external or internal flexibility are an option (see previous chapters). Internal flexibility strategies offer the possibility of responding to fluctuations in demand without making redundancies. Internal flexibility can offer benefits to both businesses and their employees. For example, companies avoid layoffand rehiring costs, and knowledge is not lost. Meanwhile, workers keep theirjobs even when demand fluctuates cyclically or seasonally, ensuring access to in­house training and development. While transitional labor markets aim to solve structural problems, strengthening internal flexibility is more suitable for solving seasonal or cyclical employment problems. In this respect, the two concepts can complement each other. (Seifert & Keller, 2006, pp. 2690-2691).

Lifelong Learning

Lifelong learning is about ensuring and improving the adaptability of workers on internal and external labor markets, as it increases employability in the long term. The measures are not limited to a specific job or employer, but rather promote the idea of transitional labor markets through the flexible deployment of workers. The (re-)entry into a (new) job is thus facilitated for both employed and unemployed people.(Seifert & Keller, 2006, pp. 2691­2692).

Reform of the Pension System

The fourth theory is only indirectly related to the different forms offlexibility. It goes beyond this by linking social security during the working phase with social security after the working phase. It is about basic security models, because increasing flexibility, frequent unemployment and interruptions in employment lead to more frequent gaps in old-age security and old-age poverty. A basic security model can contribute to solving these problems and serves as a complementary element of the flexicurity idea. (Seifert & Keller, 2006, pp. 2692-2695).

Muffels and Wilthagen (2013, p. 114) argue that flexicurity is particularly important in times of economic crisis. While there may be a reduction in job security during these periods, the basic elements mentioned above still allow for the maintenance of employment security. This approach to flexicurity as a strategy is at the heart of the paper. It looks specifically at the development and implementation of the flexicurity guidelines and their impact.

Initial Steps: Netherlands and Denmark

The Dutch flexicurity model was created with the aim of strengthening the security of workers with atypical contracts (which had increased dramatically in recent years), while maintaining the flexibility of the labor market (Bekker & Mailand, 2019, p. 149). In 1995, the concept of flexicurity was introduced by the Scientific Council for Government Policy of the Netherlands and defined as a shift from job security to employment security. Declining job security due to fewer permanent jobs and easier dismissals should be offset by better employment opportunities and social security. For example, lifelong vocational training to facilitate job changes, more favourable working time arrangements and additional social benefits were to compensate for a relaxation of employment protection legislation. A little later in the year, the Dutch Minister of Social Affairs, Ad Melkert, presented a memorandum on flexibility and security, which provided for a relaxation of employment protection for permanent employees on condition that flexworkers were given regular employment status (Tangían, 2004, p. 11). In 1999, this initiative was enshrined in the most explicit flexicurity law in the Netherlands, the 'Flexibility and Security Act', which guarantees the basic right to equal treatment for all workers. The elements of lifelong learning, active labor market policies and social security are also present in Dutch employment policy. However, the different areas are not so closely linked to each other and are not explicitly listed as part of the flexicurity strategy, even though they do of course influence each other.(Tros, 2009).

These features were already largely in place in Denmark and therefore in line with the flexicurity idea, but the association of the name with the Danish model came later. Since the mid-1970s, the two components of flexibility and security have been part of the existing policy framework in Denmark. The security component was initially strong, with nine years of passive entitlement to unemployment benefits. Accordingly, unemployment rates were very high for a long time. This did not change until a third policy component was added in the 1990s, namelyactive labor market policies, in particularthe introduction ofactivation requirements in workfare, which shifted the focus from income protection to employment protection. Passive unemployment benefits have also been gradually reduced; Brown and Snower (2009, pp. 2-3) describe this as a shift from a safety net to a trampoline to ensure the transition back to work. The Danish employment model is often referred to as the "golden triangle", because it explicitly combines three important elements: a flexible labor market with low employment protection, generous social benefits for the unemployed and a high degree ofactive labor market policies (e.g. through retraining). (Mailand, 2009).

Abbildung in dieser Leseprobe nicht enthalten

Figure 2: The Golden Triangle in Denmark

own illustration based on: Flexicurity, 2022; Madsen, 2004

The harmonisation ofemployment protection and the high level ofactive labor market policies have kept the flexibility of the Danish labor market at a high level. Simultaneously, the government tries to increase income security by paying high unemployment benefits up to 90% of previous earnings for up to two years. This income security gives workers a longer period oftime to find a job, and the strong emphasis on education and training also strengthens employment security for those who are able to work.(Flexicurity,2022;

Madsen, 2004). This led not only to high employment rates, low inflation and steady growth in Denmark at the turn ofthe century, but also to strikingly low inequality in the labor market. Weaker groups in the Danish labor market, such as women, the elderly and the very young, have particularly benefited. (Bekker & Mailand, 2019, pp. 145-146; Wilthagen & Tros, 2003, p. 15). The flexicurity models of the Netherlands and Denmark differ in their genesis, as the latter was not consciously developed but emerged over time as a result of path-dependent strategic choices by the main actors in labor market regulation, yet they have been praised by the European Union as a showcase model (Mailand, 2009). The Dutch and Danish versions of flexicurity both focus on external numerical flexibility and emerged from social dialogue, which is still particularly important in both countries. (Brown & Snower, 2009, p. 2; Wilthagen &Tros, 2003, p. 174). Wilthagen and Tros (2004, pp.179-180) note that the Danish and Dutch examples show that decentralisation of labor market policy has a positive effect on the introduction offlexicurity. In Denmark and the Netherlands, collective bargaining parties, local organisations, companies and individual employers and employees have been given more leeway to tailor solutions to flexibility and security wishes and needs.

Conclusion Part One

In this first part, developments in labor markets were discussed as a prerequisite for the idea of combining flexibility and security. The aim was to develop a basic knowledge of the subject. In order to develop a comprehensive understanding offlexicurity, the first chapter classified the concept offlexicurity into an analytical and a normative-political perspective.

In addition to the theoretical considerations, different analytical methods were presented: a model for distinguishing types of flexicurity within Europe and another model for analysing the existing flexicurity components of a Member State itself. In addition, four conceptual elements were presented that form the basis of a policy framework for the flexicurity idea: transition markets, internal flexibilization strategies, lifelong learning and basic security (in later life). The roots offlexicurity were found in the Netherlands and Denmark, which are therefore considered to be the birthplaces offlexicurity.

In summary, flexicurity is, on the one hand, a policy strategy for combining flexibility and social security in the labor market and, on the other hand, a measurable condition in the labor market in which a complementary relationship is established between these two factors. The aim of flexicurity policies is to increase flexibility in order to enhance the competitiveness ofan economy, while at the same time guaranteeing and strengthening the social security of workers in line with the European understanding of welfare.

At European Level: Flexicurity and Beyond

By the end of the last century, it became clearthat both the single European countries with their relative economic independence and Europe as a whole were facing major economic challenges. This was reflected in lower average growth rates (compared to the main economic partners), employment rates, or the threat of demographic aging. It was evident to the countries that a comprehensive European transformation was needed to overcome these structural weaknesses and additionally to respond to the global challenges (European Commission, 2007, 2010). o meet the challenges ofthe European labor market, the experts and institutions involved said that flexible labor markets were needed, with adequate protection for workers. This is the only way to meet the needs of companies and workers alike. (European Commission, 2006a, p. 4). In Anglo-Saxon labor market models such as the United States, Canada, the United Kingdom, and Australia, relativelygood labor market performance was achieved with little regulation at the time. Employment flexibility was expected to improve the competitiveness of firms and thereby stimulate production in a sustainable way. This, in turn, should stimulate labor markets. The Danish and Dutch versions of labor market deregulation appeared as a "third way" between highly regulated and liberal labor market models (Bekker & Mailand, 2019, p. 147; Tangían, 2004, p. 10). This chapter explores the European Union's approach to flexicurity, specifically the origins, objectives, and principles of the strategy. As it provides a framework for German flexicurity policies, the European concept of flexicurity is important for the remainder of this paper.

Development of a European approach

Following the example of the Dutch and Danish systems, flexicurity has been part of the European employment strategy from very early on. A Common European Employment Strategy was formally launched in 1997. In 2000, it became part of the Lisbon Strategy (Weishaupt & Lack, 2011, p. 13), which set the ambitious goal of making Europe "the most competitive and dynamic knowledge-based economy in the world, capable ofsustainable growth with more and better jobs and greater social cohesion."²

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¹Seifert and Keller (in Kronauer & Linné, 2005, p. 128) name the following variants of atypical employment: Part-time work, marginal employment (mini- and midi-jobs), fixed-term employment, temporary employment, new self-employment.

²„and a sustainable environment" was added in 2001 (European Parliament, 2009)

• Université: Berlin School of Economics and Law
• Note: 1,0
• Auteur: Isabel Win (Auteur)
• Année de publication: 2023
• Pages: 80
• N° de catalogue: V1367001
• ISBN (PDF): 9783346897244
• ISBN (Livre): 9783346897251
• Langue: anglais
• mots-clé: Flexicurity, Labor Market Policies, Social Security, Welfare, Social Security Systems, Internal Flexibility, External Flexibility, Active Labor Market Policies, Lifelong Learning, European Semester, European Employment Strategy, Employment Strategy, Conditions for Retirement, Contractual Arrangements, Transitional Labor Markets, Industrial Relations, Hartz Reforms, Flexibilisation Strategies, Social Investment, Labor market outcomes, social exclusion, Deregulation, labor law, labor law deregulation, marginal employment, temporary work, Employment protection, Hartz Reformen, Arbeitsmarktpolitik