Tracing Convergence in Flexibility and Income Security for Youth during the Economic Crisis

Thursday, 2 July 2015: 4:00 PM-5:30 PM
TW2.1.01 (Tower Two)
Janine Leschke, Copenhagen Business School, Department of Business and Politics, Frederiksberg, Denmark; Copenhagen Business School; Copenhagen Business School
Mairead Finn, Copenhagen Business School, Department of Business and Politics, Frederiksberg, Denmark
This paper traces convergences between flexibility and security in youth labour market transition regimes (Walther and Pohl 2005; Walther 2006) during the economic crisis. Youth transition regimes are characterized by different school- and training- systems and by different labour market and social security systems. The paper uses the frame of trade-offs, vicious, and virtuous relationships to analyze external and internal flexibility as well as income security (Leschke, Schmid, Griga 2007; Schmid 2009).

The analysis is situated against a backdrop of policy initiatives at EU level to foster youth employment. In 2015, as part of a Youth Employment Initiative, the European Commission is planning to make €1 billion available for youth employment before the end of the year, with the aim of getting 650,000 young people into work. Member States benefiting from the Initiative receive the funds after the adoption of dedicated operational programmes (Carling, 2015). The issue of youth employment has been a consistent policy concern of the European Commission’s, as expressed in its June 2013 Communication ‘Working Together for Europe’s Young People’. In a package of measure entitled ‘Youth on the Move’, the priority is to increase job opportunities for young people without undermining job quality and job security (Eurofound, 2013). ‘Youth on the Move’ is part of the Europe 2020 Strategy, a series of strategies to increase the employment rate in Europe, of which the principle of flexicurity is a core feature. 

Youth were one of the groups hardest hit by the economic crisis. Young people in most European countries are more likely to work on temporary contracts (external flexibility) than adults. These contracts are, by definition, of limited duration. By contrast, due to strict employment protection legislation, permanent workers are often difficult to fire. This implies that youth are disproportionally hit by unemployment. In a majority of EU countries youth are also disadvantaged with regard to unemployment benefits (income security). This is for two reasons: eligibility criteria require a certain minimum period in employment before unemployment insurance benefits can be accessed; and means-testing applies to unemployment and social assistance benefit schemes. Moreover, due to lower tenure, and thereby work experience (which makes them attractive for employers), it is likely that young people do not benefit as much as adults from short-time working measures – reduced working time with partial income replacement (internal flexibility) – which were popular measures in several countries during the economic crisis.

Particularly in the first years of the crisis, in several countries serious efforts were made to improve the income security of youth and temporary workers, both in employment (opening up of short-term working schemes) and in unemployment (easier access to unemployment benefits) (Leschke 2013). However the austerity measures which followed these were often geared towards employment and social policies, and thus are likely to have undermined these earlier efforts.

This paper adopts a comparative European approach in order to shed light on the interaction between external and internal flexibility, and on income security, for youth. Different phases of the economic crisis are defined in the analysis. To this end, special extracts of the aggregate European Labour Force Survey data are used. Both the development of involuntary temporary employment among youth and developments in access by youth to unemployment benefits will be traced. The data analysis is complemented by an institutional analysis charting changes in unemployment benefit criteria. We will also characterize the possibilities for youth, over-represented in flexible employment, to benefit from short-time working measures during the crisis. This contextualizes the data analysis and facilitates an assessment of which, if any, policy measures lead to more inclusive unemployment benefits. This allows an estimation of whether a match between flexibility and security has been achieved, in line with the explicit objectives of the European Commission, as outlined.

To frame this data and institutional analysis, we employ a more dynamic version of the flexicurity matrix (Wilthagen and Tros 2004): ‘trade-offs’, ‘vicious’ and ‘virtuous’ relationships between labour market flexibility and security are discussed in light of the different youth transition regimes. Overall, this allows us to assess if developments during the economic crisis can be seen as perpetuating the trend towards labour market segmentation, a trend which has affected young persons in particular, and whether this trend is visible across youth transition regimes.


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