Labour Market Transitions and Employment Regimes: Evidence on the Flexibility-Security Nexus in Transitional Labour Markets

Abstract:     
This paper deals with the question whether the concept of transitional labour market (TLM) might be useful to formulate hypotheses about the relationship between the size and nature of labour market transitions and the performance of employment regimes. The paper starts from the idea that the TLM concept, as being developed by Guenther Schmid and others, might be connected with the notion of 'employment regimes' as defined by Guesta Esping-Andersen and others. Subsequently the paper aims at testing empirically whether the claims of the TLM concept with respect to labour market flexibility and work security hold in the real worlds of European labour markets. The paper comes to the conclusion that the liberal regime combines a high level of labour mobility and flexibility (although not much higher than the corporatist or social-democratic regime) with a low level of work security, and that the social-democratic regime comes out with a high level of work security but a (somewhat) lower level of labour market mobility. However, these regimes do not fit that nicely in the 'ideal-type' as this conclusion might suggest: the liberal regimes also have fairly high levels of employment security and social-democratic countries have fairly high levels of labour mobility and flexibility. The convergence hypothesis might find some ground in these findings.

Notwithstanding this assessment, we find that the Southern regime can and should be quite clearly distinguished from the other regimes. Although the share of flexible jobs is rather high, upward mobility into permanent jobs is lower in the South and downward mobility (from work into exclusion) is higher. Hence, the Southern regime is performing worse both in terms of enhancing job mobility and preventing labour market exclusion. Apparently, regimes differ and the differences concern the particular tradeoff or balance between flexibility and security within the distinct regimes.

Number of Pages in PDF File: 37

Keywords: transitional labour market, employment regimes, transitions, panel data, European Community Household Panel

JEL Classification: J6, J21, J41

Accepted Paper Series