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

  • Eichhorst, Werner

    ()

    (IZA)

  • Marx, Paul

    ()

    (University of Southern Denmark)

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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File URL: http://ftp.iza.org/dp5035.pdf
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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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  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. Eichhorst, Werner & Hemerijck, Anton, 2008. "Welfare and Employment: A European Dilemma?," IZA Discussion Papers 3870, Institute for the Study of Labor (IZA).
  3. Michael Kvasnicka, 2009. "Does Temporary Help Work Provide a Stepping Stone to Regular Employment?," NBER Chapters, in: Studies of Labor Market Intermediation, pages 335-372 National Bureau of Economic Research, Inc.
  4. Sarah Brown & John G. Sessions, 2005. "Employee Attitudes, Earnings and Fixed-Term Contracts: International Evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(2), pages 296-317, July.
  5. Jean Pisani-Ferry, 2003. "The Surprising French Employment Performance: What Lessons?," CESifo Working Paper Series 1078, CESifo Group Munich.
  6. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June.
  7. Wiemer Salverda & Ken Mayhew, 2009. "Capitalist economies and wage inequality," Oxford Review of Economic Policy, Oxford University Press, vol. 25(1), pages 126-154, Spring.
  8. 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 wp382, ESRC Centre for Business Research.
  9. Danielle Venn, 2009. "Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators," OECD Social, Employment and Migration Working Papers 89, OECD Publishing.
  10. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: A Honeymoon Effect?," Carlo Alberto Notebooks 37, Collegio Carlo Alberto.
  11. 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).
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