Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States

23 Pages Posted: 12 Jul 2010

See all articles by Werner Eichhorst

Werner Eichhorst

Institute for the Study of Labor (IZA)

Paul Marx

IZA Institute of Labor Economics

Abstract

The paper compares employment structures in five Continental welfare states. These countries feature broad similarities in their reliance on a more dualised model of labour market flexibility, particularly in service occupations with low skill requirements. However, a closer look also reveals considerable differences between national patterns of standard and non-standard work. In Germany (and to a lesser extent Austria), marginal part-time provides a fertile ground for low-paid service jobs, as non-wage labour costs are minimised. In France, fixed-term contracts are a flexible and also cheaper alternative to permanent contracts, especially for younger workers. Dutch service sector employers follow an eclectic approach, as can be seen from high shares of self-employed and part-timers, as well as temporary workers. Finally, Belgium has large proportions of very low-skilled, own-account self-employed and involuntary fixed-term contracts. On the basis of these results, we identify four transformative pathways towards a more inclusive or flexible labour market: growing wage dispersion, defection from both permanent full-time employment as well as from dependent employment, and government-sponsored labour cost reductions.

Keywords: labour market dualisation, Continental Europe, fixed-term contracts, part-time work, wage dispersion

JEL Classification: J38, J41, J21, J58

Suggested Citation

Eichhorst, Werner and Marx, Paul, Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States. IZA Discussion Paper No. 5035. Available at SSRN: https://ssrn.com/abstract=1638470

Werner Eichhorst (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Paul Marx

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
105
Abstract Views
686
rank
264,446
PlumX Metrics