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Mads Peter Klindt
 

Mads Peter Klindt

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    Mads Peter Klindt Mads Peter Klindt Presentation Transcript

    • Flexicurity: The Danish Experience
      Mads Peter Klindt, Research Fellow
      Centre for Labour Market Research (CARMA)
      Aalborg University
      mpk@epa.aau.dk
      Presentation at the FORES labour market conference in STOCKHOLM
      March 24, 2010
    • Outline of the presentation
      The Danish flexicurity-model
      Nordic flexicurityprofiles
      The dynamics of flexicurity: some empirical findings concerning labour market mobility
      Time to turnaround? Some policy recommendations for the Swedish government
    • The ‘Golden Triangle’ of Flexicurity
      Traditional nexus between flexibility and security (since 1899/1907)
      Flexible labour market
      Qualification effect of ALMP (1994)
      Active labour market policies
      Generous
      unemployment benefits
      Motivational effect of ALMP(1994/2001)
      Source: Madsen (2006)
    • Flexicurity version 2.0
      FlexibleLabourMarket
      Educationand CVT
      Job trai-ning
      Unem-ployment Benefits
      Service, monitoring and control
      Source: Klindt (2010)
    • Nordic flexicurity-profiles
      Source: Nordic Council of Ministers (2010)
    • Dynamics of flexicurity
      Moderate to low EPL reduces labour market segmentation and improves employer’s ability to adjust to changes through hiring and firing (flexibility).
      So, when hiring and firing is cheap, employers are less hesitant to hire; especially, this has an positive impact on youth employment rates.
      Good UB provides economic security for unemployed persons (security) and reduces the political pressure for better job security
      High and long lasting UB can create functional disincentives (such as reduced search intensity), however, it a has positive effect on workers’ willingness to take the risk of job-to-job mobility
      Furthermore, the negative incentives stemming from UB can largely be offset by ALMP through balanced systems of rights and duties.
    • Labour turnover
      European Commission (2009)
    • Labour market segmentation and EPL
      Source: European Commission (2006)
    • Youth unemployment
      Source: European Commission (2009)
    • Mobility from temporary employment to other statuses (from one year to the next)
      Source: Nordic Council of Ministers (2010)
    • Job mobility: Experiences and attitudes
      Share of work force with a positive view on job mobility
      R2 = 0,8401
      R2 = 0,6195
      Average number of job transitions per person
      Source: Owncalculationsbasedon Eurobarometer 64.1 (2005)
    • Policy-recommendations for the Swedish government
      The Swedish government has reduced the generosity of the UB, halved the UB-duration, but maintained a high degree of EPL
      These steps, together with increased self-financing in the UI-funds, may jeopardize Swedish workers’ willingness to take the risk of job-to-job mobility, and may result in a less dynamic labour market.
      From a flexicurity-perspective, Sweden should rather have preserved its UB system (generous benefits and collective risk pooling) while at the same time it should have reduced EPL to lower the economic burden on private enterprises.
      “Workers will be more inclined to take risks associated with job transfers if benefits are adequate during transition periods and if prospects for new and better jobs are real (…) if these conditions are met, dismissal procedures can be made considerably lighter, less costly and less time consuming” (European Commission, 2007)
    • Unemployment insurance in Denmark and Sweden
      Compensation rate
      90 %
      80 %
      70 %
      Duration
      300 days
      4 years
    • Denmark also has problems…
      Gap between registered and surveyed unemployment
      Source: AE-raadet (2010)