IDEAS home Printed from https://ideas.repec.org/p/lan/wpaper/238220512.html
   My bibliography  Save this paper

Economic Growth in the EU: Is Flexicurity a Help or a Hindrance?

Author

Listed:
  • Hilary Clistina Ingham

Abstract

In the light of the recent economic crisis, flexicurity has permeated many European Union (EU) policies with the hope that more flexible labour markets alongside modern social security systems and active learning can reinvigorate economic growth. This paper employs a variant of the Solow growth model to examine the impact that flexicurity had on economic growth in 27 EU Member States for the years 2000 to 2015. Using principal components to capture the multi-faceted concept of flexicurity, the results reveal that, in isolation, flexicurity failed to provide any growth stimulus. Lifelong learning, active labour market policy and modern security systems proved However, incorporating the role of the social partners and trust into the model provided a more positive picture of the flexicurity-growth relationship.

Suggested Citation

  • Hilary Clistina Ingham, 2018. "Economic Growth in the EU: Is Flexicurity a Help or a Hindrance?," Working Papers 238220512, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:238220512
    as

    Download full text from publisher

    File URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/LancasterWP2018_008.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    2. Larch, Martin & Van den Noord, Paul & Jonung, Lars, 2010. "The stability and growth pact: lessons from the great recession," MPRA Paper 27900, University Library of Munich, Germany.
    3. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
    4. repec:ilo:ilowps:454205 is not listed on IDEAS
    5. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 381-402.
    6. Jonathan Michie & Maura Sheehan, 2003. "Labour market deregulation, 'flexibility' and innovation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(1), pages 123-143, January.
    7. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    8. Kanbur, Ravi, 2006. "What’s Social Policy Got To Do With Economic Growth?," Working Papers 127037, Cornell University, Department of Applied Economics and Management.
    9. John Martin & Stefano Scarpetta, 2012. "Setting It Right: Employment Protection, Labour Reallocation and Productivity," De Economist, Springer, vol. 160(2), pages 89-116, June.
    10. Algan, Yann & Cahuc, Pierre, 2005. "Civic attitudes and the Design of Labor Market Institutions? Which Countries can Implement the Danish Flexicurity Model?," CEPREMAP Working Papers (Docweb) 0517, CEPREMAP.
    11. Per H. Jensen, 2017. "Danish flexicurity: preconditions and future prospects," Industrial Relations Journal, Wiley Blackwell, vol. 48(3), pages 218-230, May.
    12. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    13. Eyck, Kim van., 2003. "Flexibilizing employment : an overview," ILO Working Papers 993597573402676, International Labour Organization.
    14. repec:ilo:ilowps:359757 is not listed on IDEAS
    15. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
    16. repec:hal:spmain:info:hdl:2441/8811 is not listed on IDEAS
    17. Primož Dolenc & Suzana Laporšek, 2013. "Flexicurity Policies and their Association with Productivity in the European Union," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(2), pages 224-239.
    18. Barbara Sianesi & John Van Reenen, 2003. "The Returns to Education: Macroeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 157-200, April.
    19. Torben Andersen, 2012. "A Flexicurity Labour Market in the Great Recession: The Case of Denmark," De Economist, Springer, vol. 160(2), pages 117-140, June.
    20. Henry Kaiser, 1974. "An index of factorial simplicity," Psychometrika, Springer;The Psychometric Society, vol. 39(1), pages 31-36, March.
    21. Tim Van Rie & Ive Marx, 2012. "The European Union at Work? The European Employment Strategy from Crisis to Crisis," Journal of Common Market Studies, Wiley Blackwell, vol. 50(2), pages 335-356, March.
    22. Ravi Kanbur, 2006. "What’s Social Policy Got To Do With Economic Growth?," Working Papers id:366, eSocialSciences.
    23. repec:hal:wpspec:info:hdl:2441/8811 is not listed on IDEAS
    24. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    2. Hilary Ingham, 2023. "COVID‐19, the Great Recession and Economic Recovery: A Tale of Two Crises," Journal of Common Market Studies, Wiley Blackwell, vol. 61(2), pages 469-485, March.
    3. Chimere O. Iheonu, 2019. "Governance and Domestic Investment in Africa," Working Papers 19/001, European Xtramile Centre of African Studies (EXCAS).
    4. Marion Payen & Patrick Rondé, 2020. "Culture, Institutions and Economic Growth," Working Papers of BETA 2020-18, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Juan José Barrios, 2011. "Participation in voluntary organizations," Documentos de Investigación 70, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    6. Juan José Barrios, 2011. "Existence of non-profit organizations in the United States of America," Documentos de Investigación 68, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    7. Soares, Helena & Sequeira, Tiago Neves & Marques, Pedro Macias & Gomes, Orlando & Ferreira-Lopes, Alexandra, 2018. "Social infrastructure and the preservation of physical capital: Equilibria and transitional dynamics," Applied Mathematics and Computation, Elsevier, vol. 321(C), pages 614-632.
    8. Dustin Chambers & Susan Hamer, 2012. "Culture And Growth: Some Empirical Evidence," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 549-564, October.
    9. Ming Yu Cheng & Ron Mittelhammer, 2008. "Globalization and Economic Development: Impact of Social Capital and Institutional Building," American Journal of Economics and Sociology, Wiley Blackwell, vol. 67(5), pages 859-888, November.
    10. Mina Baliamoune‐Lutz, 2009. "Human Well‐Being Effects Of Institutions And Social Capital," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 54-66, January.
    11. Boudreaux, Christopher & Caudill, Steven, 2019. "Entrepreneurship, Institutions, and Economic Growth: Does the Level of Development Matter?," MPRA Paper 94244, University Library of Munich, Germany.
    12. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," EconStor Preprints 269878, ZBW - Leibniz Information Centre for Economics.
    13. Udaya Shankar Mishra & Hrushikesh Mallick & Balakrushna Padhi, 2023. "An Inquiry into Households’ Confidence Levels in Various Institutions in India: A Temporal Assessment from the IHDS," Review of Development and Change, , vol. 28(1), pages 90-111, June.
    14. Eicher, Theo S. & García-Peñalosa, Cecilia & Kuenzel, David J., 2018. "Constitutional rules as determinants of social infrastructure," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 182-209.
    15. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.
    16. Givens, David, 2013. "Defining governance matters: A factor analytic assessment of governance institutions," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 1026-1053.
    17. Asongu, Simplice A. & Nwachukwu, Jacinta C., 2017. "Quality of Growth Empirics: Comparative gaps, benchmarking and policy syndromes," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 861-882.
    18. Zwane, Talent & Biyase, Mduduzi & Binda, Thandolwethu, 2021. "Institutions and Technical Efficiency: A Stochastic Frontier Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 74(4), pages 415-438.
    19. Balan, David J. & Knack, Stephen, 2012. "The correlation between human capital and morality and its effect on economic performance: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 457-475.
    20. Francesco Pasimeni & Paolo Pasimeni, 2016. "An Institutional Analysis of the Europe 2020 Strategy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1021-1038, July.

    More about this item

    Keywords

    Economic Growth; Flexicurity; European Union;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lan:wpaper:238220512. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Giorgio Motta (email available below). General contact details of provider: https://edirc.repec.org/data/delanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.