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Flexicurity experiences from Central and Eastern Europe

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Flexicurity: concept and policy. Labour Markets in CEE- Assessing flexibility ... remains limited below 10% - due to its unpopularity among employers and workers. ... – PowerPoint PPT presentation

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Title: Flexicurity experiences from Central and Eastern Europe


1
Flexicurity experiences from Central and Eastern
Europe
  • Sandrine Cazes
  • ILO
  • Turin, 2 July 2008

2
Todays topics
  • Flexicurity concept and policy
  • Labour Markets in CEE- Assessing flexibility
  • Labour Markets institutions and policies
  • ILO flexicurity project
  • Challenges for moving forward

3
Some thoughts on flexibility and security
  • Flexibility is...the degree to which employment
    (or working time) or wages adjust to economic
    changes
  • Security relates here to labour market security
  •  Flexicurity  is the combination of both, i.e.
    a socially acceptable balance between the needs
    of adaptable firms and need of security, notably
    for weaker groups in and out the labour market
  • The mix of strategies has to be flexible

4
LM in CEE- increasing flexibilization of
employment relations
  • Since 2000, trend towards more flexible form of
    employment, in particular temporary employment.
  • By contrast, part-time employment remains
    limited below 10 - due to its unpopularity
    among employers and workers.
  • Major differences across countries in the of
    self employment
  • However, main evidence of LM flexibilization has
    been an increase in informal employment during
    the transition period.
  • Incidence of flexible forms of employment
    particularly high among   vulnerable  groups.
    It points to a deepening of LM segmentation.

5
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6
LM in CEE- strong perception of insecurity
  • Labour turnover has declined since 2000,
    indicating a certain stabilization of LM after
    the period of extensive enterprise restructuring
    in the 1990s.
  • Tenure data also confirmed this stabilization, as
    well as deepening LM segmentation.
  • Even in periods of economic growth many workers
    are hesitant to quit their jobs voluntarily,
    because of their heightened perception of job
    insecurity.
  • Inefficient labour reallocation may have a
    negative effect on labour productivity

7
Labour Market institutions policies
  • Liberalization of EPL in CEE countries in hope of
    boosting employment and new recruitments
  • EPL in new EU countries now more liberal than the
    average for EU-15, but its enforcement needs
    improvement. Moreover, since coverage of workers
    by Collective Agreements is low, workers enjoy
    low protection at workplace.

8
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9
Labour Market institutions policies
  • Unemployment insurance became less generous over
    the 90s (level of benefit duration, tightening of
    eligibility conditions)
  • ALMPs a drop in the ocean (expenditures below 1
    of GDP in most countries)
  • In general spending on UB and ALMP significantly
    lower than in EU-15 countries
  • Despite recent improvement still high labour
    taxation, E and income security outside workplace
    through LMP is still much below the level of
    EU-15

10
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11
Social Dialogue
  • Membership in TUs has declined
  • 1995 2001
  • Czech Rep. 43 30
  • Estonia 36 15
  • Hungary 60 20
  • Poland 34 15
  • Slovakia 62 40
  • Slovenia 60 41
  • Collective Bargaining coverage is higher than
    union density, but declined as well
  • Weak bargaining power due to low level of
    coordination

12
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14
Empirical Feedback do institutions and policies
matter?
  • Finding from econometric analysis (2003)
  • EPL strictness has no significant impact on
    unemployment rates (aggregate, long-term and
    youth)
  • Labour Market institutions that matter ALMPs and
    labour payroll taxes
  • But long payment of UB increases youth and
    long-term unemployment (and reduces LFP and
    employment rates).

15
Wrap up
  • Liberalization of EPL without any visible
    effects on LM performances
  • Weak Labour Market institutions (in particular
    Social Dialogue)
  • Need to capture the complexity of the
    institutional settings and their interactions
  • Flexicurity as a relevant framework for the
    sub-region

16
ILO project in CEE Baltic States
  • Combination of research, TC activities and
    advocacy
  • Raising awareness
  • Capacity building
  • Facilitating general agreements
  • Country studies / national tripartite seminars

17
Challenges for moving forward
  • Further efforts on conceptualization
  • Link-up with the macro-economic level
  • Operationalization at the country level
  • Establish the process
  • Need for empirical feedbacks
  • Who bears the costs?
  • Who is responsible?
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