Abstract
Labor market segmentation refers to a salient divide between secure and insecure jobs and is related to problems in important areas, including macro-economic efficiency, workers’ well-being and repercussions for social cohesion. EU-28 countries have started a new wave of labor market reforms in the aftermath of the 2008/2009 crisis to tackle a number of issues, including labor market segmentation. This particularly concerns reforms in: (1) employment protection, i.e. dismissal protection and restrictions on fixed-term contracts; (2) unemployment benefit generosity and coverage; and (3) the intensity of active labor market policies. The paper provides an overview of reform patterns and tries to assess whether and to what extent these reforms have led to less dualized, more ‘flexicure’ labor markets in terms of dismissal protection, the provision of unemployment benefits and access to ALMPs. In particular, we will provide some evidence on potential changes in hirings on temporary contracts.
Highlights
Labor market segmentation has been one of the most prominent topics in recent European policy debates
We review recent attempts of member states to address labor market segmentation on four dimensions: employment protection legislation (EPL), unemployment benefits, active labor market policies (ALMP) and working-time flexibility
Three conclusions emerge from the analysis: 4 Measures taken to address labor market segmentation and their impact
Summary
Labor market segmentation has been one of the most prominent topics in recent European policy debates. Empirical evidence supporting this conjecture is sparse (Kahn 2010; see Rubery and Piasna 2016 for an overview) Our contribution to this debate is to assess to what extent countries have embarked on the flexibility (or flexicurity) agenda (again) and if this has led to a reduction of segmentation. This is justified in particular by the fact that the crisis has led to intense efforts to reform dismissal regulation. As Palier and Thelen (2010) emphasise, political representatives of core workers in countries with strong segmentation have incentives to design social policy in an exclusionary way This would mean that employment structures and welfare state institutions reinforce each other in producing labor market disadvantage. The crisis has brought insufficient protection of temporary workers in many countries to the forefront and we believe it is important to assess reform efforts in this area
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