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Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States

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  • Eichhorst, Werner

    ()
    (IZA)

  • Marx, Paul

    ()
    (University of Southern Denmark)

Abstract

The paper compares employment structures in five Continental welfare states. These countries feature broad similarities in their reliance on a more dualised model of labour market flexibility, particularly in service occupations with low skill requirements. However, a closer look also reveals considerable differences between national patterns of standard and non-standard work. In Germany (and to a lesser extent Austria), marginal part-time provides a fertile ground for low-paid service jobs, as non-wage labour costs are minimised. In France, fixed-term contracts are a flexible and also cheaper alternative to permanent contracts, especially for younger workers. Dutch service sector employers follow an eclectic approach, as can be seen from high shares of self-employed and part-timers, as well as temporary workers. Finally, Belgium has large proportions of very low-skilled, own-account self-employed and involuntary fixed-term contracts. On the basis of these results, we identify four transformative pathways towards a more inclusive or flexible labour market: growing wage dispersion, defection from both permanent full-time employment as well as from dependent employment, and government-sponsored labour cost reductions.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5035.

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Length: 23 pages
Date of creation: Jun 2010
Date of revision:
Publication status: published in: P.Emmenegger et al. (eds.): The Age of Dualization, Oxford: 2012, 73-99
Handle: RePEc:iza:izadps:dp5035

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Related research

Keywords: labour market dualisation; Continental Europe; fixed-term contracts; part-time work; wage dispersion;

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References

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  1. Bart Cockx & Bruno Van der Linden, 2009. "Flexicurity in Belgium. A Proposal Based on Economic Principles," CESifo Working Paper Series 2655, CESifo Group Munich.
  2. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(521), pages 357-385, 06.
  3. John Armour & Simon Deakin & Priya Lele & Mathias Siems, 2009. "How Do Legal Rules Evolve? Evidence from a cross-country Comparison of Shareholder, Creditor and Worker Protection," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp382, ESRC Centre for Business Research.
  4. Eichhorst, Werner & Marx, Paul, 2009. "Reforming German Labor Market Institutions: A Dual Path to Flexibility," IZA Discussion Papers 4100, Institute for the Study of Labor (IZA).
  5. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(480), pages F214-F244, June.
  6. Michael Kvasnicka, 2008. "Does Temporary Help Work Provide a Stepping Stone to Regular Employment?," NBER Working Papers 13843, National Bureau of Economic Research, Inc.
  7. Sarah Brown & John G. Sessions, 2005. "Employee Attitudes, Earnings and Fixed-Term Contracts: International Evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, Springer, vol. 141(2), pages 296-317, July.
  8. Jean Pisani-Ferry, 2003. "The Surprising French Employment Performance: What Lessons?," CESifo Working Paper Series 1078, CESifo Group Munich.
  9. Danielle Venn, 2009. "Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators," OECD Social, Employment and Migration Working Papers, OECD Publishing 89, OECD Publishing.
  10. Wiemer Salverda & Ken Mayhew, 2009. "Capitalist economies and wage inequality," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 25(1), pages 126-154, Spring.
  11. Eichhorst, Werner & Hemerijck, Anton, 2008. "Welfare and Employment: A European Dilemma?," IZA Discussion Papers 3870, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Busemeyer, Marius R., 2011. "Varieties of cross-class coalitions in the politics of dualization: Insights from the case of vocational training in Germany," MPIfG Discussion Paper, Max Planck Institute for the Study of Societies 11/13, Max Planck Institute for the Study of Societies.
  2. Eichhorst, Werner & Weishaupt, J. Timo, 2013. "Mit Neo-Korporatismus durch die Krise? Die Rolle des Sozialen Dialogs in Deutschland, Österreich und der Schweiz," IZA Discussion Papers 7498, Institute for the Study of Labor (IZA).
  3. Eichhorst, Werner, 2012. "The Unexpected Appearance of a New German Model," IZA Discussion Papers 6625, Institute for the Study of Labor (IZA).
  4. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," LEQS – LSE 'Europe in Question' Discussion Paper Series, European Institute, LSE 42, European Institute, LSE.
  5. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs), London School of Economics / European Institute 2, London School of Economics / European Institute.
  6. Anke Hassel, 2011. "The paradox of liberalization – understanding dualism and the recovery of the German political economy," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 53212, London School of Economics and Political Science, LSE Library.
  7. Eichhorst, Werner & Konle-Seidl, Regina & Koslowski, Alison & Marx, Paul, 2010. "Quantity over Quality? A European Comparison of the Changing Nature of Transitions between Non-Employment and Employment," IZA Discussion Papers 5285, Institute for the Study of Labor (IZA).

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