Employer Tenure in Ireland and Denmark
The “Varieties of Capitalism” literature suggests that Coordinated Market Economies use employment protection legislation to protect workers and extend their tenure, while the emphasis in Liberal Market Economies on flexibility and turnover results in lower tenure. While this simplification has been elaborated on in the literature, the basic point that internal labour markets are protected in CME’s but not in LME’s has been supported by many. However, other works have questioned whether high mobility between jobs is always a sign of precarity. Instead, many authors suggest that mobility and flexibility can sustain multi-employer careers when strong institutional support exists. This suggests that mobility may not be the preserve of LMEs and indeed may work ‘better’ in CMEs.
This paper explores this debate by examining rates of tenure with a particular employer in ‘liberal’ Ireland and ‘coordinated’ Denmark, using the 2010 European Working Conditions Survey. Firstly, we find higher rates of tenure in Ireland when compared to Denmark. Secondly, Irish tenure rates appear to be polarised by occupation while Danish tenure shows little variation by occupation. Thirdly, we see little difference between the countries in the predicted tenure rates of low-occupation workers. Lastly, linked to the previous point, the major differences in tenure appear to come from the middle and upper occupations in both countries, with Denmark producing lower tenure rates.
How can ‘coordinated’ Denmark have higher rates of job mobility than ‘liberal’ Ireland? Companies in both countries provide similar access to training, with Denmark showing slightly higher rates despite displaying lower tenure. Employees in each country feel equally positive about career prospects within their firms. Both groups of workers feel “at home” within their organisation, again, with Denmark displaying a slightly higher tendency to agree with the statement, despite its lower tenure. However, bigger differences are also evident; Danish employees are far more likely to believe they can reproduce their current conditions with a new employer.
Results suggest that coordinated market economies can produce a mobile workforce through “embedded flexibility” (Thelen, 2014). Although liberal market economies may contain uncertainty for the lower skilled, it appears that firms try to internalise workers in Ireland more often than they do in Denmark. The paper contributes to the recent discussion of “Varieties of Liberalization” as well as to literature discussing “Internal” and “Occupational” labour markets in Europe. Tenure rates are an often mentioned but rarely explored outcome in this literature.
Keywords: Mobility, Labour Markets, Flexibility