Recent Labour Market Reforms Research Articles

(In)efficient Separations, Firing Costs and Temporary Contracts

In this paper we study the allocative (in)efficiency of employment protection in relation to firing costs, in a general equilibrium model with labor market frictions. The optimal firing costs depend on the level of unemployment benefits and the degree of centralized wage bargaining, two features of the labor market that induce downward wage rigidity and trigger inefficient employment separations. When restrictions on firing employees with permanent contracts are inefficiently high, the introduction of temporary contracts improves welfare but does not fully restore efficiency. A quantitative analysis for the Italian economy shows that the firing costs before the recent labor market reforms were 30% higher than the optimal level, implying a consumption loss of almost 2% in the steady state. The introduction of fixed-term jobs in the early 2000’s closed one fourth of the gap between inefficient and efficient allocation, although it led to higher unemployment rates and turnover.

Recommodification and the Welfare State in Re/Financialised Austerity Capitalism: Further Eroding Social Citizenship?

This article reviews the recommodification of social policy in the context of financialised austerity capitalism and post-crisis welfare states. It sets out an understanding of recommodification as a multiple set of processes that involve the state in labour market-making, by shaping labour’s ‘saleability’. Under conditions of finance-dominated austerity capitalism, the article argues that recent dynamics of recommodification complicate the long established Piersonian observations. For Pierson, recommodification signifies how elements of the welfare state that shelter individuals from market pressures are dismantled and replaced with measures which buffer their labour market participation. This article examines ways in which recent policy trends in recommodification, whether by incentivising or coercive means, increase exposure to labour market risks and connect with the growing inequalities between capital and labour under post-crisis re/financialised austerity capitalism. This analysis is paired with a synoptic review of recent labour market trends and reforms across the European Union. As recommodification evolves, the insecurity it institutes raises fundamental questions about the underlying nature of social citizenship which are also addressed.

Have Macron’s Recent Labour Reforms Been as Impactful as Past German Reforms?

Structural reforms can sometimes take many years for the effects to be visible in economic data: but one area where impacts can manifest more swiftly is the labour market. In particular, Germany’s experience in the mid-2000s is often cited as a clear example of how macroeconomic dynamics can shift relatively swiftly if the reforms are effective. More recently, France has seen a number of structural reforms, driven by President Macron’s desire to revitalize the French economy after his 2016 election. This paper examines the macroeconomic impact of recent French labour market reforms, comparing and contrasting this impact against the German experience in the 2000s. If idiosyncratic policy changes were a significant driver of labour market dynamics, then empirical outcomes should be different for those countries experiencing policy changes, relative to their peers. Using a variety of different statistical techniques, we find that – while there is clear evidence of the German labour market outperforming its peers when the Hartz reforms were enacted – there is no sign of the French labour market doing so under Macron’s presidency.

One discourse to rule them all? Narrating the agenda for labor market policies in France and Germany

ABSTRACTDespite different institutional and situational conditions, the recent French labor market reforms bear a strong resemblance to the labor market reforms in Germany in the early 2000s. Governments at both points in time turned away from the conservative welfare state model and failed to appropriately legitimize their reforms toward the public as well as their originally partly social-democratic electorate. Given the diverging conditions which are expected to lead to different strategies of legitimization, this contribution inquires after the narrative stories with which the corresponding acting government framed its reforms publicly. Surprisingly, despite the large differences that the two governments faced, the analysis shows that the respective narratives stories were not only similar but can be assigned to certain programmatic groups that used the narratives to push their own policy program and place themselves in power positions. In doing so, the contribution establishes a yet missing link between the recently established Programmatic Action Framework (PAF) and the concept of narrative stories and discourse in policy analysis, thereby adding to both research strands. This link lies in the observation that programmatic groups use narratives to strengthen in-group identification and thus improve their chances of success, which makes dominant narratives an important indicator of programmatic groups. However, when legitimizing reforms – even if these are transferred from other country experiences – it is imperatively important to embed the strategies of legitimization in the national context.

Italian NEETs in 2005–2016: have the Recent Labour Market Reforms Produced Any Effect?

Italian NEETs in 2005–2016: have the Recent Labour Market Reforms Produced Any Effect?

Italy's 'Employment-Rich' Recovery: A Closer Look

We look at changes in employment in Italy after the double-dip recession. We show that since the end of 2014 the responsiveness to GDP of total employment and its payroll components (permanent and fixed-term) has risen significantly; the increase has been broad-based across sectors and it would have been larger if demographic factors had been netted out. These developments are not common to France, Spain and Germany. Therefore, we turn to Italy-specific determinants related to the recent labour market reforms. Using cell-level data drawn from the Comunicazioni Obbligatorie of the Veneto region, we find that gross permanent hires and conversions of fixed-term positions have temporarily, but significantly, benefited from the 2015-2016 hiring subsidies across all types of firms and, more smoothly, from the new regulation of dismissals introduced by the 2015 Jobs Act for medium-large firms. This latter result is clear in 2017, in the absence of subsidies to permanent hiring. Fixed-term employment has increased, likely favoured by the 2014 Poletti Decree, more strongly so when permanent hiring subsidies were lifted or weakened and among smaller firms.

Il lavoro “a chiamata” e le piattaforme online della collaborative economy: nozioni e tipi legali in cerca di tutele

The paper, after giving an overview of recent labour trends in the digital economy, describes alternative working arrangements such as “crowdworking” and “work on-demand via platform”. The regulatory framework and the legal consequences of such innovative and non-standard forms of work are analysed in detail with emphasis on the improper classification of workers in the gig-economy. In the second section, the essay focuses on the recent Communication of the European Commission on Collaborative Economy that is aimed at establishing under which conditions an online platform should be considered a provider of the “underlying services”. This focus is followed by an analysis of antitrust as well as labour law implications of Spanish, Italian and British rulings.The contribution explores the proposals on how to craft an intermediate category between employees and independent contractors. Workers in the on-demand economy have brought lawsuits alleging that the online platforms are misclassifying them as independent contractors, but the question remains still unsolved. Proponents recently advocated that a third category would be a good fit for digital platform work. Conversely, as far as Italy is concerned, the quasi-subordinate category created an opportunity for uncertainty and arbitrage resulting in the erosion of protection. The article describes the notion of the so called “collaborazioni organizzate dal committente” (contractors whose performance is organised by the principal) as a tool to expand crowdworkers’ rights.Finally, the most recent Italian labour market reform could eventually provide a solution for the current disputes on how work in the gig-economy could be regulated. In fact, the scheme of “collaborazioni organizzate dal committente” could represent a useful template, since it broadens the scope of the protections granted to standard employees.

Realising Sedgwick’s vision: theorising strategies of resistance to neoliberal mental health and welfare policy

There has recently been renewed interest in non-reductive historical materialist modes for analysing social movements, of which the work of mental health activist and Marxist theorist Peter Sedgwick is a precursor. We contend that Sedgwick’s approach retains contemporary utility for theorising radical mental health movements, though we argue that this needs extension in light of intervening debates regarding the interaction of material and post-material concerns. Having established this, we will turn to an overview of recent neoliberal labour market, welfare and mental health policy reforms as a basis for consideration of the strategic implications for resistance and coalition building among survivor and worker activists. We will propose a contemporary Sedgwickian ‘transitional’ strategy as a means to realise transformative change in services and society. In conclusion, we argue that tools for promoting this strategy, such as the Social Work Action Network’s ‘Mental health charter’, may assist in binding together diverse constituencies to strengthen alliances of resistance.

The employment effect of reforming a public employment agency

By how much does an increase in operating effectiveness of a public employment agency (PEA) and a reduction of unemployment benefits reduce unemployment? Using a recent labour market reform in Germany as background, we find that an enhanced effectiveness of the PEA explains about 20% of the observed post-reform unemployment decline. The role of unemployment benefit reduction explains just about 5% of the observed decline. Due to disincentive effects resulting from the reform, the reform of the PEA could have had an even higher impact on unemployment reduction if there had been less focus on long-term unemployed workers.

L'evoluzione del lavoro a tempo parziale in Spagna e Italia: una questione di genere?

This article discusses the development and features of part-time work in Spain and Italy to determine, from a descriptive analysis, the factors involved in its growth. The analysis of the part-time growing trend since 2007, emphasizes how such a contract type is serving as a factor of occupational adjustment in the direction of labor flexibility, which is laid down by the recent labor market reforms in both countries. Flexibility does not act as a neutral element, as it affects particularly women. Part-time work, which traditionally presents advantages to a group seeking reconciliation through flexibility, as in Northern Europe countries, seems not to be a totally valid explanation of its progress in Spain and Italy, countries participating in the social and labor policies in the South.

The Employment Effect of Reforming a Public Employment Agency

By how much does an increase in operating effectiveness of a public employment agency (PEA) and a reduction of unemployment benefits reduce unemployment? Using a recent labour market reform in Germany as background, we find that an enhanced effectiveness of the PEA explains about 20% of the observed post-reform unemployment decline. The role of unemployment benefit reduction explains just about 5% of the observed decline. Due to disincentive effects resulting from the reform, the reform of the PEA could have had an even higher impact on unemployment reduction if there had been less focus on long-term unemployed workers.

Times of change: what drives the growth of work arrangements in Germany?

Since the beginning of the 1990s, the composition of work arrangements has significantly changed. Whereas non-standard work arrangements such as part-time or temporary employment grew over time, standard work lost in importance. However, data from the German Labour Force Survey does—at least for the recent past—not show a clear indication for a much greater speed with respect to changes in the composition of work arrangements. In addition, developments are also driven by a long-term trend. Shift-share-analyses suggest that shifts in the demographic or industry composition of employment were only of minor importance as a driving force for the trend. This means that factors related to the behaviour of the parties involved have obviously played a decisive role. In this context it is important that Germany is a country with regulations creating incentives for an increased use of nonstandard work arrangements. Of relevance in this context are high social security contributions, a considerable level of employment protection, a stronger activation of unemployed due to recent labour market reforms and a still dominant male bread winner model.

Ageing Populations in Post‐Industrial Democracies: Comparative Studies of Policies and PoliticsVanhuysse, Peter and GoerresAchim (eds.) New York, Routledge (2012), 274 p., ISBN 978‐0‐415‐60382‐9

Ageing Populations in Post‐Industrial Democracies: Comparative Studies of Policies and PoliticsVanhuysse, Peter and GoerresAchim (eds.) New York, Routledge (2012), 274 p., ISBN 978‐0‐415‐60382‐9

Thumbscrews for Agencies or for Individuals? How to Reduce Unemployment

To which extent does an increase in operating effectiveness of public employment agencies on the one hand and a reduction of unemployment benefits on the other reduce unemployment? Using the recent labour market reform in Germany as background we find that the role of unemployment benefit reduction for the reduction of unemployment is very modest (7% of the observed decline). Enhanced effectiveness of public employment agencies, to the contrary, explains a substantial part (34%) of the observed post-reform unemployment decline. If disincentive effects of PEA reforms had been avoided, the effect could have increased to 51%.

Another economic miracle? The German labor market and the Great Recession

Abstract Germany’s labor market responded only mildly to the Great Recession. Important factors for this development include the strong economic position due to recent labor market reforms, the crisis affecting mainly export-oriented companies, the extension of short-time work, time buffers due to working time accounts, the behavior of social partners, and automatic stabilizers. We emphasize the important interaction between short-time work and long-term shortages of skilled workers in sectors particularly affected by the crisis. Although Germany’s experience is in stark contrast to the United States, we identify and discuss common challenges at the center of the future jobs debate.

Another Economic Miracle? The German Labor Market and the Great Recession

The mild response of the German labor market to the worst global recession in post-war history appears as an economic miracle. In response to the crisis, Germany has shown to be a strong case of internal flexibility. We argue that important factors that have contributed to this development include the strong position of the German economy due to recent labor market reforms, the nature of the crisis affecting mainly export-oriented companies in Germany, the extension of short-time work, the behavior of social partners, and automatic stabilizers. Among these factors, we emphasize the key role of the interaction between short-time work and long-term shortages of skilled workers in sectors and regions that were particularly affected by the crisis. Although the German experience is in stark contrast to that in the United States, we identify and discuss three challenges that will be at the center of debate on both sides of the Atlantic in the future.

Reforming the Labour Market in Spain

After steady employment growth since the 1990s, Spain has experienced the sharpest increase in unemployment among OECD countries during the crisis, amplified by structural problems of the labour market. Very high de facto severance payment of permanent contracts has resulted in a rigid dual market with adverse effects on unemployment and productivity. The collective wage bargaining system has hindered firms from adapting to macroeconomic shocks exacerbating their negative effects on the labour market. The recent labour market reform legislation is a positive step to reduce excessive protection of workers in permanent contracts, although some uncertainty remains on how courts will interpret it. It also makes it easier for firms to opt out from higher level collective agreements. The large drop-out rate from lower secondary education is an important factor explaining very high unemployment among young workers. Better access of young people to training is an effective tool to keep them out of a depressed labour market. Finally, the matching of people to jobs, notably through the public employment services, needs to be made more efficient, all the more so under currently tight fiscal constraints. Although the recent reform allows private for-profit firms to provide placement services, more needs to be done. Performance of regional public employment services should be benchmarked and incentives of unemployment benefit recipients to search for a job increased. Reformer le marche du travail en Espagne Apres avoir connu une croissance reguliere de l’emploi durant les annees 90, l’Espagne a accuse la plus forte hausse du chomage de tous les pays de l’OCDE pendant la crise, amplifiee par les problemes structurels du marche du travail. Les indemnites de licenciement tres elevees obtenues de facto par les titulaires de contrats permanents ont cree des rigidites et abouti a un dualisme du marche du travail qui a des effets negatifs sur l’emploi et la productivite. Le systeme de negociation collective des salaires a empeche les entreprises de s’adapter aux chocs macroeconomiques et donc d’en attenuer l’impact sur l’emploi. La legislation de reforme du marche du travail devrait permettre de reduire la protection excessive dont beneficie l’emploi permanent, mais certaines incertitudes subsistent quant a la facon dont ce texte sera interprete par les tribunaux. Ces dispositions permettent plus aisement aux entreprises de ne pas appliquer les conventions collectives de haut niveau. Le taux eleve d’abandon des etudes au premier cycle de l’enseignement secondaire explique pour beaucoup le tres fort chomage qui sevit chez les jeunes. Elargir l’acces des jeunes a la formation serait un moyen efficace de les tenir a l’ecart d’un marche du travail deprime. Enfin, il y aurait lieu d’ameliorer l’efficacite des activites de placement, notamment au travers des services publics de l’emploi, et ce d’autant plus compte tenue des contraintes budgetaires actuelles. La reforme recente autorise les entreprises a but lucratif a offrir des services de placement, mais il faut aller plus loin. Dans cette optique, il faudrait soumettre les services publics regionaux de l’emploi a des evaluations de performance et inciter davantage les chomeurs indemnises a rechercher un emploi.

‘Selective Flexicurity’ in Segmented Labour Markets: The Case of Italian ‘Mid-Siders’

AbstractThe article is focused on the analysis of flexicurity arrangements in the Italian case with a twofold aim. The first aim is substantive: analysing and evaluating recent labour market reforms in Italy with particular reference to the possible emergence of a new flexicurity model. The second goal is to contribute to the debate on labour market development and flexicurity by enriching and refining the available analytical tools. More specifically, we argue that the traditional conceptual ‘lenses’ focusing on the ‘insiders’/‘outsiders’ divide are inadequate to grasp the ongoing changes in the Italian labour market. This leads us to identify a third category of workers, the ‘mid-siders’, who are increasingly relevant in the Italian case and may prove to be relevant in other labour markets too. Moreover, we introduce the concept of ‘selective flexicurity’, referring to the fact that in the Italian case flexibility and security measures have been applied differently across the various categories of workers.

The Italian Wage Curve. The effects of the Recent Labour Market Reforms

- The paper examines some effects of the recent reforms aimed at increasing flexibility in the Italian labour market. It shows their incapability to respond to the "inclusion" problem which still characterises the country. New temporary low-skill jobs were created but the reforms have neither enforced industrial competitiveness nor increased productivity. Far from solving the problems of a dual economy, de-regulation of Italian labour market has reinforced them and has concurrently eroded civil rights thereby making a departure form standards of health and morality. Excessive turnover of workers and firms is a major obstacle to human capital accumulation. A hostile territory produces social inequality, poverty and under- consumption that severely compromises growth. Key words: Labor and Demographic Economics; Wages, Compensation and Labor Costs; Wage Level and Structure; Wage Differentials JEL Classification: J, J3, J31

Unemployment Duration in Germany: Individual and Regional Determinants of Local Job Finding, Migration and Subsidized Employment

Arntz M. and Wilke R. A. Unemployment duration in Germany: individual and regional determinants of local job finding, migration and subsidized employment, Regional Studies. Recent labour market reforms in Germany aim, among other things, at reducing unemployment by restricting passive unemployment measures, emphasizing local labour market policies and restructuring public employment services. This paper uses extensive individual administrative and regional aggregate data to explore the extent to which these factors are likely to contribute to the shortening of unemployment duration. For this purpose, a semi-parametric duration model with three competing exit states is estimated. The results suggest that changes in the unemployment compensation system rather than local employment policies and administrative restructuring efforts may shorten unemployment duration. In addition, determinants of the length of unemployment vary across exit states. Arntz M. et Wilke R. A. La durée du chômage en Allemagne: déterminants individuels et régionaux de l'accès aux emplois locaux, des migrations de main d'œuvre et des emplois subventionnés, Regional Studies. Les récentes réformes du marché du travail en Allemagne visent, entre autres choses, à réduire le chômage en limitant les mesures passives de traitement du chômage, en mettant l'accent sur les politiques axées sur le marché local du travail, et en restructurant les services publics de placement. Cet article utilise un nombre considérable de données agrégées individuelles, administratives et régionales afin d'examiner dans quelle mesure ces facteurs sont susceptibles de contribuer au raccourcissement de la durée du chômage. A cet effet, nous estimons un modèle de durée semi-paramétrique comportant trois états de sortie en concurrence. Nos résultats suggèrent que ce sont les changements dans le système d'indemnisation du chômage plutôt que les politiques locales de l'emploi et les efforts de restructuration administrative qui peuvent raccourcir la durée du chômage. En outre, les déterminants de la durée du chômage varient selon les états de sortie. Risque concurrentiel Politique du marché du travail Données individuelles et régionales Arntz M. und Wilke R. A. Dauer der Arbeitslosigkeit in Deutschland: Individuelle und regionale Determinanten der lokalen Arbeitssuche, Migration und subventionierten Beschäftigung, Regional Studies. Die jüngsten Arbeitsmarktreformen in Deutschland zielen unter anderem darauf ab, die Arbeitslosigkeit durch Einschränkung passiver Arbeitslosigkeitsmaßnahmen, Betonung lokaler Arbeitsmarktpolitiken und Umstrukturierung öffentlicher Beschäftigungsdienste zu senken. In diesem Beitrag untersuchen wir mit Hilfe umfangreicher Prozessdaten auf individueller und regional aggregierter Ebene, in welchem Umfang diese Faktoren voraussichtlich zu einer Verkürzung der Dauer der Arbeitslosigkeit beitragen werden. Zu diesem Zweck stellen wir eine Schätzung anhand eines semiparametrischen Verweildauermodells mit drei konkurrierenden Endzuständen auf. Unsere Ergebnisse lassen darauf schließen, dass eine Verkürzung der Dauer der Arbeitslosigkeit statt durch lokale Beschäftigungspolitiken und Maßnahmen zur Umstrukturierung der Verwaltung eher durch Änderungen im System der Zuwendungen für Arbeitslose erreicht werden könnte. Darüber hinaus fallen die Determinanten für die Dauer der Arbeitslosigkeit je nach Endzustand unterschiedlich aus. Konkurrierende Risiken Arbeitsmarktpolitik Individuelle und Regionaldaten Arntz M. y Wilke R. A. Duración del desempleo en Alemania: determinantes individuales y regionales de la búsqueda de empleo local, migración y trabajo subvencionado, Regional Studies. Con las recientes reformas del mercado laboral en Alemania se pretende entre otras cosas reducir el paro limitando las medidas pasivas del desempleo, dando prioridad a las políticas del mercado laboral a nivel local y reestructurando los servicios del empleo público. En este artículo, utilizamos extensos datos agregados de carácter administrativo individual y regional para analizar hasta qué punto es probable que estos factores contribuyan a reducir la duración del desempleo. Para esta finalidad, calculamos un modelo de duración semiparamétrico con tres estados competitivos de salida. Nuestros resultados indican que se podría reducir la duración del desempleo si se introdujeran cambios en el sistema de compensación de desempleo, en vez de cambiar las políticas de empleo locales y reestructurar la administración. Además, los determinantes de la duración del desempleo varían en los diferentes estados de salida. Riesgo competitivo Política del mercado laboral Datos individuales y regionales