Trends in social cohesion, No. 15 Reconciling labour flexibility with social cohesion — Facing the challenge Council of Europe Publishing Editions du Conseil de l’Europe Reconciling labour flexibility with social cohesion – Facing the challenge ropean Trends in social cohesion, No. 15 The opinions expressed in this work are the responsibility of the authors and do not necessarily reflect the official policy of the Council of Europe. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic (CD-Rom, Internet, etc.) or mechanical, including photocopying, recording or any informa- tion storage or retrieval system, without the prior permission in writing from the Publishing Division, Communication and Research Directorate (F-67075 Strasbourg or [email protected]). Cover design : Graphic Design Workshop, Council of Europe Council of Europe Publishing F-67075 Strasbourg Cedex ISBN 92-871-5813-4 © Council of Europe, November 2005 Printed in Belgium TITLES IN THE SAME SERIES No. 1 Promoting the policy debate on social exclusion from a comparative perspective (ISBN 92-871-4920-8, €8) No. 2 Trends and developments in old-age pension and health-care financing in Europe during the 1990s (ISBN 92-871-4921-6, €8) No. 3 Using social benefits to combat poverty and social exclusion : opportunities and problems from a comparative perspective (ISBN 92-871-4937-2, €13) No. 4 New social demands : the challenges of governance (ISBN 92-871-5012-5, €19) No. 5 Combating poverty and access to social rights in the countries of the south Caucasus : a territorial approach (ISBN 92-871-5096-6, €15) No. 6 The state and new social responsibilities in a globalising world (ISBN 92-871-5168-7, €15) No. 7 Civil society and new social responsibilities based on ethical foundations (ISBN 92-871-5309-4, €13) No. 8 Youth and exclusion in disadvantaged urban areas : addressing the causes of violence (ISBN 92-871-5389-2, €25) No. 9 Youth and exclusion in disadvantaged urban areas : policy approaches in six European cities (ISBN 92-871-5512-7, €15) No. 10 Security through social cohesion : proposals for a new socioeconomic governance (ISBN 92-871-5491-0, €17) No. 11 Security through social cohesion : deconstructing fear (of others) by going beyond stereotypes (ISBN 92-871-5544-5, €10) No. 12 Ethical, solidarity-based citizen involvement in the economy : a prerequisite for social cohesion (ISBN 92-871-5558-5, €10) No. 13 Retirement income : recent developments and proposals (ISBN 92-871-5705-7, €13) No. 14 Solidarity-based choices in the marketplace : a vital contribution to social cohesion (ISBN 92-871-5761-8, €30 ) 3 CONTENTS Preface .................................................................................................................. 9 Foreword .......................................................................................................... 11 by Gilda Farrell Part I – The challenges of labour flexibility for social cohesion ..................................................................... 23 A – Flexibility, economic performance and social cohesion ........................................................................ 23 I – Labour market flexibility and socio-economic performance : a European perspective ........................................................................... 23 by Sabine Urban and Dario Velo Introduction ...................................................................................................... 23 1. The European Union: a vision for society against a background of dissatisfaction .......................................................................................... 24 2. Management of business competitiveness as a factor in labour market flexibility ............................................................................ 27 3. Labour market flexibility: one variable in the performance of socio-economic systems ........................................................................... 33 4. Proposals for overcoming a crisis of modernity ............................................. 38 II – From flexibility to social cohesion through finance ........................ 47 by Pierre Salama Introduction ...................................................................................................... 47 1. A look at the labour and employment markets ............................................ 47 2. Financial markets and their relations with the various forms of flexibility ...... 59 Conclusion: what about social cohesion? .......................................................... 66 Bibliography ..................................................................................................... 69 5 B – Flexibility, job insecurity and the welfare costs ................. 71 I – The welfare costs of job insecurity : psychological well-being and family life ......................................... 71 by Brendan J. Burchell Introduction ...................................................................................................... 71 1. Changes in levels of job insecurity ................................................................ 74 2. Job insecurity and psychological well-being .................................................. 76 3. Does job insecurity influence work orientation and motivation? ................... 84 4. Job insecurity and family life ........................................................................ 88 5. Conclusions and policy implications ............................................................. 96 Bibliography ................................................................................................... 100 II – How does flexibility affect social cohesion? The Council of Europe’s tree model revisited ............................. 109 by Ton Wilthagen and Mijke Houwerzijl Introduction: social cohesion and labour market flexibilisation ......................... 109 1. The flexibility–security nexus and “flexicurity” ............................................ 110 2. Using the Council of Europe’s social cohesion tree model ........................... 110 3. The aims of the Dutch Flexibility and Security Act and the basic values underlying it ............................................................... 112 4. Which players and actions played a role in the Flexibility and Security Act? .... 117 5. Effects of the act in the light of the four dimensions of well-being ............. 123 6. Concluding comments about the Dutch Flexibility and Security Act in terms of the Council of Europe’s tree model ............................................................ 128 Bibliography ................................................................................................... 130 Part II – Towards reconciliation: issues for bridging the gap between flexibility and social cohesion .... 133 A – The route to social cohesion flexibility ................................ 133 I – Different kinds of flexibility : reconciling different interests ....... 133 by Aris Accornero Introduction .................................................................................................... 133 6 1. Types and levels of labour flexibility ............................................................ 135 2. Flexible work and workers ......................................................................... 142 3. Optimising flexibility for all ......................................................................... 146 4. Family and working life .............................................................................. 149 Conclusion ..................................................................................................... 152 Bibliography ................................................................................................... 154 II – Flexicurity schemes ............................................................................. 157 by Ute Klammer Introduction: key ideas and definitions of the concept of “flexicurity” ............. 157 1. Welfare state regimes, flexibility in the course of working life and social security ...................................................................................... 160 2. Labour market integration over a lifetime – evidence for different welfare state regimes ................................................................................. 161 3. Career breaks, working-time changes and individuals’ income and social security in different member states of the EU ............................. 167 4. Some political implications ......................................................................... 182 Bibliography ................................................................................................... 187 III – What are the ingredients of “good” flexicurity arrangements ? Some ideas for identifying factors that make for success ............... 191 by Sebastian Sperber Introduction .................................................................................................... 191 1. How do labour market institutions cope with security and flexibility? ......... 192 2. A first step towards identifying successful flexicurity arrangements ............ 195 3. Extending the analysis ................................................................................ 203 Conclusion ..................................................................................................... 206 Bibliography ..................................................................................................