Before moving in to the nitty-gritty of flexicurity; what it is and whether it can work as a universal European labour market model I should take the time to thank the AFOE team for allowing me a spell as a guest-writer here at the blog in the coming two weeks. In terms of presentation my name is Claus Vistesen and I am a Danish student at the BLC program at Copenhagen Business School. For further info I invite you to visit my personal blog Alpha.Sources, which deals with a wide range of topics of my interest.
There is a lot of talk and flurry at the moment about labour market reforms in Europe, notably in France, but also Germany has been struggling with how to reform the labour market and here as well as here.
Looking to the north we find the Nordic countries who seemingly have the best of two worlds; low uemployment coupled with a high degree of security but what is it exactly that the Nordic countries are doing, and could others potentially follow their example?
I have a lot of sources both academic and journalist describing and discussing the Nordic labour market regime called flexicurity, so in order not to spam you with info and quotes (will probably do it anyway :)) I have included one quote from an article by EurActiv.com which pretty well sums up the idea of flexicurity.
The concept of flexicurity rests on the assumption that flexibility and security are not contradictory, but complementary and even mutually supportive. It brings together a low level of protection for workers against dismissal with high unemployment benefits and a labour market policy based on a right for the unemployed to retraining. The concept of job security is replaced by employment security. Social dialogue between employers and employees is an important aspect of the flexicurity model.
Returning to the Nordic labour markets, let us try to list some of the positive things concerning the flexicurity regime. Well, the most obvious and direct effect the system has is indeed to combine a very flexible labour market with a low unemployment rate. It also shows in the measure of business attractiveness where for example Denmark is number one in the latest release from the Economist Intelligence Unit. Furthermore it stands out that even though workers themselves are not protected only one out of ten workers express concern over job security.
What about the negative sides then? Well, obviously this protection scheme is a heavy financial burden of society as it is the government who essentially picks up the tap for allowing business to regulate the labour pool.
The crucial question clearly remains whether this flexicurity regime is exportable to for example France and Germany which are both experincing and struggling with high structural umemployment rates. On this, which probably will be the main venue of comments, I am inherently sceptical because I believe it raises the classic question of the chicken and the egg. Countries are different not least because of their social models of economy and government which also transcends into cultural and historical legacies. This means that what works in one country does not necessarily work in another precisely because they are different. However, this should not deter us from the fact that the Nordic countries seems to have found a way out of a high structurel unemployment rate which is something Germany and France have not. In this light cherrypicking the virtues of the Nordic model might be worth while for some European countries, it is the how which will proove the big challenge as I see it, but you might have a different view?