employment and decent work in the era of flexicurity robert boyer pse - paris-jourdan sciences...
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Employment and Employment and Decent Work in the Decent Work in the Era of FlexicurityEra of Flexicurity
Robert BoyerPSE - PARIS-JOURDAN SCIENCES ECONOMIQUES
(Joint research unit CNRS-EHESS-ENPC-ENS)48, Boulevard Jourdan 75014 PARIS, France
Phone: (33-1) 43 13 62 56 — Fax: (33-1) 43 13 62 59e-mail: [email protected]
web site: http://www.jourdan.ens.fr/~boyer
“Development Forum on Productive Employment and Decent Work”, panel 3: Labour Market Flexibility and Decent Work, New-York, United-
Nations, ECOSOC Chamber, 8-9 May 2006
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Introduction
A basic question:How to promote decent work and productive
employment in the era of globalization and flexibility?
The method :1.What do theoretical advances tell?2.Do international comparisons show the
superiority of flexibility strategies for OECD countries?
3.What are the constraints and opportunities for developing countries?
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I. Theory: A reappraisal of the flexibility/security debate
The inadequacy of the typical pure competition model:
1 In a stochastic world , it is not rational to adapt instantaneously.
2.In a complete macroeconomic model, the maximum speed of adjustment of employment may generate structural instability.
3.Similar results for capital adjustments.4. To take risks and accept changes, individuals
have to benefit from a minimum degree of security.
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Figure 1 – Why the competitive equilibrium theory is not suited for assessing the impact of the security
brought by welfare systemsIndex of
performance
1 Optimal level ofsecurity
0Index of security
The market view : security introduces a distance with respect to the general equilibrium that is a Pareto optimum.
The institutionalist view:Full security may be contradictory with the requirement of a capitalist economy.No security at all may create instability in the employment relation and institutional equilibrium.In between, some security may be optimum for economic performance as well as for welfare.
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The externalities associated to the various forms of security have to be taken into account:
1 Income security: a contribution to demand and an impact upon expectations.
2.Employment security: an incentive to investment in firm specific skills.
3.Representation security: more commitment and acceptance of technical change.
4.Life security: significant impact upon productivity and welfare.
5.Skill security: more productivity and adaptability to changes
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Figure 2 – How various securities may enhance dynamic efficiency
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From possible static inefficiency to a contribution to dynamic efficiency and growth.
1 Security is a cost in the short run…..
2…but also an investment in a form of“social capital”...
3…hence a possible contribution to an endogenous process of growth.
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Figure 3 - A reconciliation of two opposed visions of the impact of
welfare
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II. Empirical evidence for OECD economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
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Figure 4 – Quality of job prospects and insecurity, selected European
countries, 1995-2000 (percentage)
Source: ILO (2004),
World Employment report 2004-
05, p. 206.
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II. Empirical evidence for OECD economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
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Figure 5 – Job insecurity and spending on labor market policies, selected OECD
countries, 2000
Source: ILO (2004), World Employment report 2004-05, p. 207.
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II. Empirical evidence for OECD economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active employment policies
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Figure 6 – Spending on labor market policies increases with openness, selected
industrialized countries, 1970-2000
Source: ILO (2004), World Employment report 2004-05, p. 190.
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II. Empirical evidence for OECD economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active employment policies
4.Active welfare may complement innovation policy
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Figure 7 – Changed in MFP growth and change in business R&D intensity
Source: Bassanini A., Scarpetta S., Visco I. (2000: 27)
-Spain
France
Japan
Austria
Greece
Netherlandfs
Belgium-Germany
PortugalNew Zealand
United States
Ireland
CanadaSweden
FinlandDenmark
Australia
-2
-1,5
-1
-0,5
0
0,5
1
1,5
-0,4 -0,2 0 0,2 0,4 0,6 0,8
Difference in Business and Enterprise RD intensity between 1980-90 and 1990-98
Dif
fere
nci
es i
n m
ult
i fa
ctor
pro
du
ctiv
ity
(MF
P)
grow
th
rate
bet
wee
n 1
980-
90 a
nd
199
0-98
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II. Empirical evidence for OECD economies : flexicurity and not only
flex-flexibility1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active employment policies
4.Active welfare may complement innovation policy
5.A whole spectrum of configurations for workers secutity
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Table 1 – Employment or employability protection?
A typology of OECD countries late 1990s and early 2000s
Source: ILO (2004), World Employment report 2004-05, p. 209.
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III. More security for workers in developing countries
1.Constraints and opportunities for productive employment and decent work
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Table 2 – Obstacles and opportunities for decent work in developing
countries1. Large hidden obstacles to open employment Large informal sector
Frequently attributed to the excessive security granted to the formal sector
2. Weak states Social compact Role of consumers of third world products
3. Weak / non existing unions Institution of representative unions by State regulation
4. Low income level and resources for insurance
Human development: a condition as well as an outcome of economic development
5. Rural activity as structurally uncertain Move from the agriculture to the services 6. Large macroeconomic instability The smaller the economy, the more likely
flexibility, significant welfare 7. More uncertainty with the opening to the
world economy Globalization may be a trump:
- Higher wage for multinationals - Higher wage in the export sector - Codes of conduct
8. Rare public training Shortage of skilled labor as an incentive for upgrading competences
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III. More security for workers in developing countries
1.Constraints and opportunities for productive employment and decent work
2.The ambiguous impact of globalization on labor standards
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Figure 8 – Chances and constraints on productive employment and decent
work
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III. More security for workers in developing countries
1.Constraints and opportunities for productive employment and decent work
2.The ambiguous impact of globalization on labor standards
3.A method for drawing a dividing line between flexibility and security
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Figure 9 – A growth diagnostics approach to employment creation
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III. More security for workers in developing countries
1.Constraints and opportunities for productive employment and decent work
2.The ambiguous impact of globalization on labor standards
3.A method for drawing a dividing line between flexibility and security
4.The institutional setting in order to promote the related configurations
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Table 3 – The paths to workers security
WHAT CONDITIONS WOULD FAVOR DECENT WORK?
Business codes Corporate Social Responsibility (CSR) National labor law ° Scarcity of workers
Collective voice of workers ° Full employment Social conflicts
Social compacts
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III. More security for workers in developing countries
1.Constraints and opportunities for productive employment and decent work
2.The ambiguous impact of globalization on labor standards
3.A method for drawing a dividing line between flexibility and security
4.The institutional setting in order to promote the related configurations
5. Some developing countries do suceed
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Table 4 – Some developing countries are quite successful in enhancing
security
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IV. Conclusion
1.Modern theorizing: a minimum workers security is required given the specificity of the wage labor nexus.
2.For OECD countries flexicurity delivers better outcomes than conventional flexibility
3.Employment diagnosis and alternative institutional designs opens some strategy for developing countries
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Many thanks for your Many thanks for your attentionattention
Robert BOYERPSE, CNRS, E.H.E.S.S.
48, Boulevard Jourdan 75014 PARIS, France
Tél. : (33-1) 43 13 62 56 – Fax : (33-1) 43 13 62 59
e-mail : [email protected] site : http://www.jourdan.ens.fr/~boyer/