Transcript Development Forum on Productive Employment and Decent Work

Employment and Decent
Work in the Era of Flexicurity
Robert Boyer
PSE - PARIS-JOURDAN SCIENCES ECONOMIQUES
(Joint research unit CNRS-EHESS-ENPC-ENS)
48, Boulevard Jourdan 75014 PARIS, France
Phone: (33-1) 43 13 62 56 — Fax: (33-1) 43 13 62 59
e-mail: [email protected]
web site: http://www.jourdan.ens.fr/~boyer
“Development Forum on Productive Employment and Decent Work”,
panel 3: Labour Market Flexibility and Decent Work, New-York, UnitedNations, ECOSOC Chamber, 8-9 May 2006
Introduction
A basic question:
How to promote decent work and productive
employment in the era of globalization and
flexibility?
The method :
1.What do theoretical advances tell?
2.Do international comparisons show the
superiority of flexibility strategies for OECD
countries?
3.What are the constraints and opportunities for
developing countries?
I. Theory: A reappraisal of the
flexibility/security debate
The inadequacy of the typical pure competition
model:
1 In a stochastic world , it is not rational to adapt
instantaneously.
2.In a complete macroeconomic model, the
maximum speed of adjustment of employment
may generate structural instability.
3.Similar results for capital adjustments.
4. To take risks and accept changes, individuals
have to benefit from a minimum degree of
security.
Figure 1 – Why the competitive equilibrium theory is
not suited for assessing the impact of the security
brought by welfare systems
Index of
performance
The market view : security introduces a
distance with respect to the general
equilibrium that is a Pareto optimum.
The institutionalist view:
Full security may be contradictory with
the requirement of a capitalist economy.
No security at all may create instability in
the employment relation and institutional
equilibrium.
In between, some security may be
optimum for economic performance as
well as for welfare.
Index of security
1
Optimal level of
security
0
The externalities associated to the various forms of security
have to be taken into account:
1 Income security: a contribution to demand and an impact
upon expectations.
2.Employment security: an incentive to investment in firm
specific skills.
3.Representation security: more commitment and
acceptance of technical change.
4.Life security: significant impact upon productivity and
welfare.
5.Skill security: more productivity and adaptability to
changes
Figure 2 – How various securities may enhance
dynamic efficiency
From possible static inefficiency to a
contribution to dynamic efficiency and
growth.
1 Security is a cost in the short run…..
2…but also an investment in a form of“social
capital”...
3…hence a possible contribution to an
endogenous process of growth.
Figure 3 - A reconciliation of two opposed visions
of the impact of welfare
II. Empirical evidence for OECD
economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce
redeployment
Figure 4 – Quality of job prospects and insecurity,
selected European countries, 1995-2000
(percentage)
Source:
ILO (2004), World
Employment
report 2004-05,
p. 206.
II. Empirical evidence for OECD
economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce
redeployment
2.Labor market policies can reduce job
insecurity
Figure 5 – Job insecurity and spending on labor market
policies, selected OECD countries, 2000
Source: ILO (2004), World Employment report 2004-05, p. 207.
II. Empirical evidence for OECD
economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce
redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active
employment policies
Figure 6 – Spending on labor market policies increases
with openness, selected industrialized countries,
1970-2000
Source: ILO (2004), World Employment report 2004-05, p. 190.
II. Empirical evidence for OECD
economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active employment
policies
4.Active welfare may complement innovation policy
Figure 7 – Changed in MFP growth and change in
business R&D intensity
Differencies in multi factor productivity (MFP) growth
rate between 1980-90 and 1990-98
1,5
Australia
1
Denmark
United States
New Zealand
Portugal
0,5
0
-0,4
0
Austria
Belgium
Greece
-0,2
-Germany
Netherlandfs
Canada
Finland
Sweden
Ireland
0,2
0,4
0,6
Japan
-0,5
France
-1
-1,5
-Spain
-2
Difference in Business and Enterprise RD intensity between 1980-90 and 1990-98
Source: Bassanini A., Scarpetta S., Visco I. (2000: 27)
0,8
II. Empirical evidence for OECD
economies : flexicurity and not only
flex-flexibility
1.Job security contributes to workforce redeployment
2.Labor market policies can reduce job insecurity
3.Small open economies have more active employment
policies
4.Active welfare may complement innovation policy
5.A whole spectrum of configurations for workers secutity
Table 1 – Employment or employability protection?
A typology of OECD countries late 1990s
and early 2000s
Source: ILO (2004), World Employment report 2004-05, p. 209.
III. More security for workers in
developing countries
1.Constraints and opportunities for
productive employment and decent work
Table 2 – Obstacles and opportunities for decent
work in developing countries
1. Large hidden obstacles to open
employment Large informal sector
2. Weak states
3. Weak / non existing unions




4. Low income level and resources for
insurance
5. Rural activity as structurally uncertain
6. Large macroeconomic instability

7. More uncertainty with the opening to the
world economy

8. Rare public training



Frequently attributed to the excessive
security granted to the formal sector
Social compact
Role of consumers of third world products
Institution of representative unions by
State regulation
Human development: a condition as well
as an outcome of economic development
Move from the agriculture to the services
The smaller the economy, the more likely
flexibility, significant welfare
Globalization may be a trump:
- Higher wage for multinationals
- Higher wage in the export sector
- Codes of conduct
Shortage of skilled labor as an incentive for
upgrading competences
III. More security for workers in
developing countries
1.Constraints and opportunities for
productive employment and decent work
2.The ambiguous impact of globalization on
labor standards
Figure 8 – Chances and constraints on productive
employment and decent work
III. More security for workers in
developing countries
1.Constraints and opportunities for
productive employment and decent work
2.The ambiguous impact of globalization on
labor standards
3.A method for drawing a dividing line
between flexibility and security
Figure 9 – A growth diagnostics approach to
employment creation
III. More security for workers in
developing countries
1.Constraints and opportunities for productive
employment and decent work
2.The ambiguous impact of globalization on labor
standards
3.A method for drawing a dividing line between
flexibility and security
4.The institutional setting in order to promote the
related configurations
Table 3 – The paths to workers security
WHAT CONDITIONS WOULD FAVOR DECENT WORK?





Business codes
National labor law
Collective voice of workers
Social conflicts
Social compacts
Corporate Social Responsibility (CSR)
° Scarcity of workers
° Full employment
III. More security for workers in
developing countries
1.Constraints and opportunities for
productive employment and decent work
2.The ambiguous impact of globalization on
labor standards
3.A method for drawing a dividing line
between flexibility and security
4.The institutional setting in order to promote
the related configurations
5. Some developing countries do suceed
Table 4 – Some developing countries are quite
successful in enhancing security
IV. Conclusion
1.Modern theorizing: a minimum workers
security is required given the specificity of
the wage labor nexus.
2.For OECD countries flexicurity delivers
better outcomes than conventional
flexibility
3.Employment diagnosis and alternative
institutional designs opens some strategy
for developing countries
Many thanks for your attention
Robert BOYER
PSE, CNRS, E.H.E.S.S.
48, Boulevard Jourdan 75014 PARIS, France
Tél. : (33-1) 43 13 62 56 –
Fax : (33-1) 43 13 62 59
e-mail : [email protected]
web site : http://www.jourdan.ens.fr/~boyer/