Jump to ContentJump to Main Navigation
Youth Labor in TransitionInequalities, Mobility, and Policies in Europe$

Jacqueline O'Reilly, Janine Leschke, Renate Ortlieb, Martin Seeleib-Kaiser, and Paola Villa

Print publication date: 2018

Print ISBN-13: 9780190864798

Published to Oxford Scholarship Online: January 2019

DOI: 10.1093/oso/9780190864798.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2019. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in OSO for personal use (for details see www.oxfordscholarship.com/page/privacy-policy).date: 24 May 2019

Labor market flexibility and income security

Labor market flexibility and income security

Changes for European youth during the Great Recession

Chapter:
(p.132) 5 Labor market flexibility and income security
Source:
Youth Labor in Transition
Author(s):

Janine Leschke

Mairéad Finn

Publisher:
Oxford University Press
DOI:10.1093/oso/9780190864798.003.0005

Abstract and Keywords

In all European countries, young people are both more likely to be unemployed than adults and to account for comparatively higher shares of the workers in temporary employment. Moreover, they have more difficulty fulfilling eligibility criteria for unemployment benefits, including minimum contributory periods and means testing in secondary benefit schemes. Aggregate European Labour Force Survey data are used to estimate the access of young people to unemployment benefits as well as their participation in short-time working schemes. This analysis is complemented by an institutional analysis using databases such as LABREF and MISSOC to chart recent changes in unemployment benefit criteria directly or indirectly targeted at youth. Our results show that benefit coverage among youth has decreased further in a number of countries in the wake of the crisis, highlighting the weaknesses in protection for young people against economic shocks.

Keywords:   youth, unemployment benefits, flexibility, security, Europe, income security

5.1. Introduction

This chapter examines how young people have been affected by the Great Recession. In particular, it analyzes the relationship between labor market flexibility and the income security of youth in Europe. Given the exponential increase in youth unemployment during the Great Recession, a specific focus is placed on institutional developments regarding unemployment benefits—a topic that has remained under-researched to date.1

To provide some context, young people in most European countries are more likely than adults to be working on temporary contracts with limited job security, and they are also likely to move in and out of unemployment more frequently (external numerical flexibility) (Organization for Economic Co-operation and Development (OECD) 2014; Flek, Hála, and Mysíková, this volume). At the same time, young people tend to have less access to unemployment benefits compared to adults, given that eligibility for such benefits (income security) usually depends on a certain minimum amount of time spent in employment within a specific reference period, often with additional requirements regarding thresholds for earnings or working hours. Unemployment benefits and social assistance are frequently means tested at the household level. Adequate unemployment benefit coverage not only renders young people more financially independent of their parents but also been shown to lead to better post-unemployment outcomes, (p.133) including earnings and job stability (Gangl 2004). Moreover, there is evidence that due to (on average) lower tenure and work experience (important assets when employers are deciding who to retain and who to fire), young people do not benefit as much as adults from subsidized short-time working (Arpaia et al. 2010)—a measure that grants internal numerical flexibility to employers and at the same time (at least to a certain degree) sustains the income security of employees. Youth are thus faced with a situation in which they bear the brunt of a disproportionate share of external numerical labor market flexibility and at the same time lack income security.

Income security during unemployment has received considerable policy attention at the international, European, and national levels throughout the Great Recession, but particularly during the first years, as certain groups—such as youth and nonstandard workers—have suffered a disproportionate share of job losses. Prior to the Great Recession, little attention was paid to this issue (Eurofound 2003; Leschke 2008; Schulze Buschoff and Protsch 2008), particularly at the practical policy level.2 More comprehensive unemployment benefit coverage for youth and nonstandard workers can be achieved by ensuring the availability and adequacy of lower tier schemes, such as social assistance, and via permanent or temporary changes to the eligibility criteria under unemployment insurance schemes.3

Particularly during the early years of the crisis, serious efforts were made in several countries to improve the income security of those groups that had been disproportionally hit by unemployment, including youth and temporary workers. These efforts focused both on sustaining employment (introduction of state-subsidized short-term working schemes or expansion of existing schemes to new groups) and on cushioning unemployment (more inclusive unemployment benefits). There was also increased concern about the income security of nonstandard workers and youth at the European and international levels, as evidenced by a number of publications (OECD 2010a; European Commission 2011a) and the explicit mentioning of the need for adequate social protection for fixed-term and self-employed workers under guideline 7 of the 2010 European Employment Strategy (Council of the European Union 2010). Moreover, a basic unemployment insurance for the Euro area, which could serve as an automatic stabilizer in downturns, has been discussed (Dullien 2013; Del Monte and Zandstra 2014). By contrast, austerity measures often targeted employment and social policies (Heise and Lierse 2011; Lehndorff 2014), which impacted on the initial expansionary adjustments to unemployment benefits in some countries.

Against this background, this chapter adopts a comparative European approach. It traces developments at the interface between numerical flexibility (both internal and external) and income security for youth during different phases of the Great Recession. We examine young (aged 15–24 years) and older (aged 25–29 years) youth separately so as to explore differences between these age groups. Older youth were also affected by the crisis, but given that (p.134) they typically have more work experience, and thus longer tenure, we can expect them to do better than younger youth at the flexibility–security interface. Section 5.2 frames the chapter by discussing the European Union’s approach to flexicurity and by describing possible interactions between labor market flexibility and income security. Section 5.3 briefly discusses developments in external and internal numerical flexibility for youth during different phases of the Great Recession. Section 5.4, the core of the chapter, examines income security during unemployment—a dimension that has thus far remained underexplored. First, we map the institutional changes occurring in the design of unemployment benefits in a number of European countries during the Great Recession, with the intention of making benefits more inclusive for youth and other particularly affected labor market groups. Second, we analyze benefit coverage for young and older youth compared to adults—based on special extracts of aggregate European Union Labour Force Survey (EU-LFS) data. The chapter concludes that youth are doing worse than adults on all examined dimensions of the flexibility–security interface. Despite initial expansionary measures regarding income security in a number of countries, it emerges that income security has been undermined for youth overall when the austerity period is taken into consideration.

5.2. Relationships between labor market flexibility and income security

In examining the type of relationship that exists between labor market flexibility and income security, previous research has shown that nonstandard employment does not always act as a stepping stone to regular employment. On the contrary, nonstandard employment is often permanent or recurring, and—due to more limited job security—is frequently associated with transitions out of employment into either unemployment or inactivity (Anxo and O’Reilly 2000; Gash 2008; Muffels 2008; European Commission 2009; Leschke 2009; Berloffa et al., this volume). What little research is available on the income security of flexible workers shows that nonstandard workers are more likely to be excluded from access to unemployment benefits (to varying degrees, depending on the country and the group of workers in question). Once they qualify for access, they may actually be in a position to receive proportionately higher benefit levels because of the progressive nature of some of the systems (low benefit ceilings, flat-rate schemes, etc.; see Grimshaw and Rubery 1997; Talós 1999; Klammer and Tillmann 2001; Eurofound 2003; Leschke 2008; Schulze Buschoff and Protsch 2008), although in absolute terms the levels might not suffice to make ends meet.

Turning to the literature on flexicurity, there has been enduring criticism of the flexicurity concept as proposed by the European Commission during the second half of the Lisbon Strategy (European Commission 2007).4 The European Trade Union Confederation (ETUC) has repeatedly questioned the shift in focus (p.135) from job security granted by strict employment protection legislation (EPL) to more labor market flexibility combined with employment or employability security—to be achieved, for example, through active labor market policies (ALMPs) and lifelong learning measures. ETUC has also questioned the framing of flexibility and security as trade-offs, as well as the one-sided attribution of flexibility needs to employers and of security needs to employees (ETUC 2007). The Great Recession has put the flexicurity concept under further pressure (Heyes 2011; Ibsen 2011) and—in view of the youth unemployment crisis and the fact that workers with temporary contracts have been disproportionally affected—has also called into question the strong focus on labor market flexibility as opposed to cushioning security measures (Tangian 2007; Burroni and Keune 2011). In view of this criticism and in particular of the experience of the crisis, the Europe 2020 strategy has somewhat modified the EU’s take on flexicurity. Under Europe 2020, the EU places more emphasis on the role of job security for those countries that have very segmented labor markets and thereby removes the focus from labor market adaptation via increasing external numerical flexibility.5 Europe 2020 also calls attention to the importance of income security during transitions. More adequate social security benefits for some groups of nonstandard workers, namely fixed-term workers and the self-employed, were specifically mentioned in the 2010 integrated guidelines on economic and employment policies (Council of the European Union 2010, guideline 7). The most recent guidelines have returned to a rather vague formulation stipulating a design of social protection systems that “facilitates take-up for all those entitled to do so . . . and helps to prevent, reduce and protect against poverty and social exclusion through the life cycle” (Council of the European Union 2015, guideline 8). In addition, the positive role of internal flexibility devices—such as short-time working measures and working-time accounts—in buffering employment shocks is emphasized by the Commission in its agenda for new skills and jobs (European Commission 2010a).

A critical use of the flexicurity concept is particularly important with regard to youth, who—even more so since the onset of the crisis—tend to accumulate negative flexicurity outcomes (Madsen et al. 2013). Young people are more prone than adults to moving between fixed-term jobs (with limited job security) and unemployment (see Section 5.3); at the same time, because of contracts of shorter duration and thus greater difficulties in fulfilling the eligibility requirements for unemployment benefits, their access to benefits is considerable weaker than that of adults (see Section 5.4). Thus, the flexibility–security interface could be described as vicious (young people lose out on both dimensions because higher contractual flexibility means more frequent unemployment, which is less often covered by benefits).

As we show in this chapter, the crisis has not only triggered a change in discourse at the EU and international levels but also facilitated institutional change (although often only of a temporary nature), making unemployment benefits (p.136) for youth and temporary workers more inclusive in a number of countries. In the second part of the crisis, some of these developments have been reversed again, or benefit eligibility for young unemployed has been made more conditional on participation in education or training measures. Wilthagen and Tros (2004), building on the concept of transitional labor markets developed by Schmid and Gazier (2002), have proposed a matrix combining different forms of flexibility, on the one hand, with different dimensions of security, on the other hand. Leschke, Schmid, and Griga (2007) and Schmid (2008)—working within the framework of transitional labor market theory—propose exploring the links between these dimensions more comprehensively by going beyond trade-offs and also examining cases in which both flexibility and security can be improved (termed virtuous relationships) and in which both can be undermined (termed vicious relationships). In this chapter, we focus in particular on the interface between numerical flexibility (both internal and external) and income security for youth, given that these dimensions have seen dynamic changes during the Great Recession.

5.3. Tracing changes in labor market flexibility for youth during the crisis

In this section, we examine developments regarding different components of labor market flexibility for youth during the crisis. Labor market transitions are a common phenomenon among young people. School-to-work transitions are often characterized by moves in and out of the labor market before a stable job is found (OECD 2010a). These transitions are a result of rather unstable first-time jobs (e.g., temporary contracts for probationary periods) or jobs that by definition are of shorter duration (e.g., training contracts). Some youth withdraw from the labor market for prolonged periods of time—for example, to return to education. Spells of unemployment (and inactivity) are therefore a frequent phenomenon among young people.

Figure 5.1 illustrates for the EU as a whole the disproportionate levels of unemployment and the different forms of nonstandard employment (temporary employment and part-time work) experienced by youth (aged 15–24 and 25–29 years). It shows data for the precrisis period (2007), stimulus period (2009), and austerity period (2013). Young people both started from higher levels (with the exception of part-time employment for the older youth group) than adults and were more affected by increases in unemployment and nonstandard employment over the course of the crisis. During the austerity period, unemployment lies at 23.3% for the younger and at 14.6% for the older youth group, compared with 8.8% for adults. The spread across Europe is large, with an unemployment (p.137) (p.138) rate of 58.3% for youth (aged 15–24 years) in Greece and of 7.8% for youth in Germany. Temporary employment is the prime example for external numerical flexibility—here the share in 2013 lies at 42% for young youth and at 21.7% for older youth, while the adult share stands at 9%. Both youth groups have slightly higher temporary employment shares during the austerity period than before the crisis (2007), whereas the adult temporary employment rate in 2013 is still slightly below its 2007 level.

Temporary employment is often involuntary (inability to find a permanent job), and this is on average more pronounced among older youth and adults (approximately 55% and 65%, respectively) than among younger youth (approximately 33%) across the EU27. In most EU countries, more than half of the respondents in the age group of 15- to 24-year-olds are involuntarily in temporary employment. Only in Austria, Germany, and Denmark are the majority of temporary contracts of young youth composed of training contracts (Eurofound 2013).

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.1 Development of unemployment and nonstandard employment in EU27 by age group and year (2007, 2009, and 2013).

Source: Eurostat EU-LFS, special extracts.

There is a direct trade-off between external flexibility (in the form of temporary contracts) and job security because temporary employment by its nature enjoys less protection than regular employment. As a result of notice periods and severance pay, among other components, permanent employment is more protected than temporary employment. Temporary employment usually runs out after a predefined period based on a legal maximum number of successive fixed-term contracts and a maximum cumulated duration, as regulated by the European fixed-term work directive and other regulations. Countries vary substantially in the strictness of EPL for both permanent and temporary contracts (for details, see OECD 2013). Countries with lax rules regarding the dismissal of workers on permanent contracts usually have comparatively lower shares of people in temporary employment because labor market flexibility can already be achieved through hire-and-fire policies around permanent jobs—the United Kingdom is a case in point. Schömann and Clauwaert (2012), drawing on country studies, identify a clear trend during the Great Recession of many member states making their labor markets more flexible by changing the rules governing atypical contracts. They highlight, in particular, the trend toward increasing the maximum length of fixed-term contracts or the maximum possible number of renewals of such contracts. They also point to the creation in several member states of new types of contracts that are often less protected and are frequently targeted explicitly at young people (Schömann and Clauwaert 2012, Section 2.2 and Table 1). Reforms of rules on redundancy that undermine the protective role of individual and collective dismissal are also highlighted by Schömann and Clauwaert for a substantive number of European countries (Section 2.3 and Table 1). The latter trend is confirmed by a comparison of the 2008 and 2013 OECD indicators on strictness of EPL for individual (p.139) and collective dismissals pertaining to regular contracts (OECD 2016; see also Berloffa et al., this volume).

Working-time accounts or short-time working measures also create flexibility for employers in times of slack demand. Both have been used during the Great Recession and particularly the economic recession of 2008–2009, with a slightly stronger focus on short-time working: Almost all countries that already had these publicly funded schemes in place before the crisis expanded the schemes to increase their reach,6 while some other countries (BG, CZ, HU, NL, PL, SK, SI, LV, and LT) newly introduced such schemes temporarily during the crisis. Newly introduced schemes are usually less generous in terms of duration and benefits than those that are already established; however, they also usually cover a broader range of employees (Arpaia et al. 2010). Since the crisis, some countries have introduced temporary schemes covering specific types of firm or sector.7 No such schemes exist in Cyprus, Estonia, or Malta, which suggests that in these countries, working-time reductions usually go hand in hand with wage cuts of the same proportion. In contrast to temporary employment, which is often involuntary (as noted at the beginning of this section), short-time working measures carry advantages for employees in that they have enabled job preservation and the avoidance of unemployment during the crisis (Hijzen and Martin 2012). Short-time working schemes partially compensate for lost wages through the unemployment benefit fund—topped up in some countries (e.g., Belgium) by sector-level funds either directly or via the employer.

In the past, short-time working measures were restricted in many countries to core workers—either explicitly by requiring that temporary workers be released first or implicitly by offering participation in these schemes only to workers who were eligible for unemployment benefits. During the crisis, however, several of these countries (e.g., AT, BE, FR, DE, and LU) deliberately opened up their schemes—either temporarily or permanently—to new groups of workers (for country details, see Arpaia et al. 2010; European Commission 2010b). The available empirical evidence indicates, however, that the positive impacts were limited to permanent workers (Hijzen and Venn 2011; Hijzen and Martin 2012).

Figure 5.2 illustrates the evolution of short-time working for both youth and adults before and during the Great Recession. It shows, on EU27 average, the share of people working fewer hours than usual during the interview reference week because of slack demand for technical or (usually) economic reasons as a share of total employment. In all years, adults emerge as being more likely than young people to participate in short-time working measures. In line with the expansion of these schemes to new groups of workers, among them the temporarily employed, participation peaked in 2009 for all groups (somewhat more pronouncedly for adults and older youth). The share subsequently declined, although it still stands at a higher level in 2013 than before the crisis for all three groups. (p.140)

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.2 Evolution of short-time working (with or without partial benefits) in EU27 by age group, 2007–2013 (% of total employment).

Source: Eurostat EU-LFS, special extracts.

Figure 5.3 provides information on short-time working by country and age group for the year 2009 when stimulus measures peaked. The EU-LFS data have the advantage that they are comparable across countries; they do not, however, tell us anything about whether short-time working is compensated by partial unemployment benefits.8 Using the information provided in Arpaia et al. (2010), we therefore group countries into those without compensation (/), those with long-standing and usually more generous schemes ($), and those with new, temporary, and usually less generous schemes (¤). Figure 5.3 illustrates that young youth (aged 15–24 years) were considerably more likely to participate in short-time working measures in 2009 in Denmark, the Netherlands, Latvia, Malta, and Lithuania—albeit with considerable variation in overall participation across these countries. In Belgium, Bulgaria, Greece, and Hungary, the participation of young youth was slightly higher than that of adults.

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.3 Short-time working (with or without partial wage replacement) by age group and country in EU27, 2009 (% of total employment).

Source: Eurostat EU-LFS, special extracts.

In conclusion, overall, in contrast to external numerical flexibility, in which youth (and particularly younger youth) are considerably over-represented, internal numerical flexibility, as captured here by short-time working, is less segmented than initially expected—at least when the EU-LFS indicator is used. It is younger rather than older youth who seem to have been over-represented in short-time working. Note that a positive assessment of short-time working only holds as long as it has prevented even sharper increases in unemployment. Also, in countries or sectors where no partial compensation of working-hour reduction is available, short-time working will have more adverse effects on the economic situation of affected workers. (p.141)

(p.142) 5.4. Evolution of income security for unemployed youth during the Great Recession

Turning to income security, substantial shares of unemployed people do not have access to unemployment (insurance) benefits. In part, this is deliberate policy (i.e., a link between contributions and benefits is intended), whereas in other cases there is “implicit disentitlement” (Standing 2002) whereby, as a result of the trend away from dependent, permanent, and full-time “standard employment relationships,” growing numbers of unemployed workers cannot fulfill the qualifying criteria for unemployment insurance benefits.

Unemployment insurance benefits are the first tier of provision and are usually based on contributions from employers and employees. All EU countries have unemployment insurance schemes, although their eligibility conditions and benefit rates (generosity) differ substantially (Kvist, Straubinger, and Freundt 2013; OECD Benefits and Wages). In order to contextualize the following analysis of reforms of unemployment benefits during the stimulus and austerity periods of the crisis, Table 5.1 provides an overview of benefit generosity during an individual’s initial phase of unemployment (1 or 2 months of unemployment). We depict benefit generosity using net replacement rates for single persons at 67% of average wages because this likely comes closest to the situation for an average young person. Table 5.1 does not take access to benefits into account in any way: Generous benefit levels can easily go hand in hand with exclusive benefits and vice versa (see Table 5.3).

Table 5.1 Unemployment insurance benefit generosity of EU27 countries (in order of generosity) in 2013

Generosity (NRR)

Benefit insurance NRR for single person at 67% of average wage in initial phase of unemployment

Most generous (NRR > 71%)

Belgium, Slovenia, Denmark, Latvia, Luxembourg, Spain, Bulgaria, Portugal, Netherlands, Italy, Finland

Mid-level generous (NRR = 55%–70%)

France, Hungary, Czech Republic, Slovakia, Sweden, Germany, Austria, Estonia

Low-level generous (NRR = 41%–54%)

Lithuania, Ireland, Poland, Romania, Malta

Least generous (NRR < 40%)

Greece, United Kingdom

NRR, net replacement rates.

Source: OECD Benefits and Wages, 2013; authors’ compilation.

An unemployed person who is not eligible for unemployment insurance or whose entitlement has been exhausted may be entitled to unemployment assistance, which is typically less generous, noncontributory, means tested at the household level, and financed by general taxation.9 The fact that unemployment assistance is assessed at the household rather than the individual level implies (p.143) that young people living at home have broader household means taken into consideration as part of their assessment (Eurofound 2013). Typically, unemployment assistance does not require qualifying periods; in cases in which it operates with qualifying periods, these are laxer than those for unemployment insurance benefits.10 In some cases, unemployment assistance is restricted to certain categories, such as unemployed people with dependent family members; in some cases, youth or specific types of youth are explicitly excluded (see OECD Benefits and Wages).11 In almost all EU countries, as a last tier, tax-funded social assistance subject to means testing exists.

This section seeks to highlight the exclusion of youth from access to unemployment benefits, which is an underexamined topic in comparative welfare-state research (Van Oorschot 2013). Our analysis makes special reference to changes during the first period of the crisis (2008–2009) and to developments throughout the austerity period (2010–2014). Given that unemployment benefit systems are designed to meet complex (and fast-changing) conditions, there is no room here to specify the different qualifying conditions and other design features, although some details are provided as they relate to youth (also as temporary workers).12 Regularly updated comparative information on the design of unemployment benefit systems can be found in the European Commission’s Labour Market Reforms (LABREF) database (2015), the European Commission’s Mutual Information System on Social Protection (MISSOC) Comparative Tables database (2014), and the OECD Benefits and Wages series. Detailed comparative information on unemployment benefit schemes, particularly with regard to part-time workers, is also available from a special OECD (2010b) survey.

5.4.1. Review of Youth Integration in Unemployment Benefit Schemes

Young workers are subject to both explicit exclusion in terms of differential rules of access to unemployment benefits and implicit exclusion (Standing’s (2002) “implicit disentitlement”) from such benefits through their over-representation in temporary contracts and an average shorter tenure. Earnings or hours thresholds directly exclude those who work on low-hours, part-time contracts, while the qualifying period (usually a minimum contribution period within a given reference period) can further restrict the access of young people whose contracts are of short duration (for details and specific country examples, see Eurofound 2013; Leschke 2013). There are also rules affecting youth directly with both positive and negative consequences for benefit coverage. We provide some concrete examples in the following discussion.

Three countries explicitly exclude certain types of temporary workers from eligibility for unemployment benefits: the Czech Republic, Poland, and Slovakia (for details, see Eurofound 2013). In Slovakia, for example, all temporary workers were excluded from unemployment benefits until January 2013; (p.144) now temporary workers above a certain earnings threshold qualify more easily than permanent workers (2 years of employment within a reference period of 4 years, compared to a reference period of 3 years for permanent workers; Eurofound 2013).

In general, it is easier for young people (and temporary workers) to access unemployment benefits in countries that have short contribution periods within a long reference period (however, this says nothing about the generosity of the benefits received). According to Eurofound (2013), in practice it seems to be easiest for workers with short contract duration, in particular temporary workers, to qualify for unemployment benefits in France, Spain, Greece, Malta, and Finland. Qualifying conditions are likely to be most difficult to meet in the Netherlands, Ireland, Latvia, Poland, and Bulgaria (for details, see Eurofound 2013, 20–21).

Age also plays a role in access to benefits and is an explicit factor that can negatively impact on the access of young people. In the United Kingdom, for example, those younger than age 18 years are not entitled to any form of benefit, irrespective of what type of contract they have had (European Commission 2011a). On the other hand, the qualifying criteria for unemployment benefits in some countries can be more relaxed for youth or can include criteria other than a certain contributory period. In Finland, for instance, youth (aged 17–25 years) wishing to access unemployment insurance benefits can have a vocational qualification, 5 months’ work history, or 5 months’ participation in ALMPs. Romania grants graduates who are looking for work an exemption from qualifying periods for unemployment benefits (MISSOC 2014).

Young people can also be entitled to lower amounts and shorter benefit duration. In Italy and Ireland, for example, younger workers’ benefit rates are lower than those of older workers (European Commission 2011a). Several countries make benefit duration dependent on the length of the contribution period (e.g., AT, BG, DE, and NL), which disproportionally affects younger workers with shorter employment tenure (MISSOC 2014).

5.4.2. Recent Reforms of Unemployment Benefit Schemes Affecting European Youth

This section examines reforms in unemployment benefit schemes throughout the crisis, dealing separately with the first (“stimulus”) period (2008–2009) and the second (“austerity”) period (2010–2014). The focus during the stimulus period was predominantly—although not exclusively—on opening up access to unemployment benefits, whereas during the austerity period, unemployment benefits were among the targets of austerity measures in several countries. A number of benefit reforms were explicitly geared toward youth, usually comprising direct links to education and training programs (see examples discussed later). The majority of reforms, however, were of a more general nature and were related to (p.145) relaxing or tightening up qualifying conditions or to increasing or decreasing benefit levels that indirectly impact on youth. Here, we review the changes to unemployment benefit systems in the EU27 with regard to qualifying criteria, benefit levels (including one-off payments), and duration.13 For country examples of these reforms, see the remainder of Section 5.4 and Table 5.2.

(p.146) 5.4.2.1. Stimulus Period (Economic Recession of 2008–2009)

In the first part of the recession (2008–2009), which was characterized in most countries by a number of measures to stimulate the economy, qualifying criteria were relaxed in Finland, France, Italy, Latvia, Portugal, Spain, and Sweden (Latvia and Portugal previously had rather strict qualifying criteria), with positive impacts on employees with short tenure (for details, see European Commission 2010c, 137; European Commission 2011a, 18–24). The relaxation was achieved by reducing contribution periods, increasing reference periods (or both), or opening up schemes explicitly to new groups of workers. Sweden, for example, temporarily lowered the condition of membership (in an unemployment insurance fund) for income-related unemployment benefits from 1 year to 6 months and—by abolishing the work requirement—made it possible for students to join an unemployment insurance fund (European Commission 2011a). In Italy, from 2009 to 2011, ordinary unemployment allowance was extended to apprentices with at least 3 months’ tenure, while a broad group of employees—including fixed-term, temporary agency workers, and apprentices—was allowed to apply for exceptional unemployment benefits (European Commission 2011a). France made means-tested welfare benefits available to jobseekers aged between 18 and 25 years, who had previously been excluded. To prevent students from gaining access to this benefit, a relatively strict qualifying condition of 2 years’ employment within 3 years was added, taking into account all types of employment contract (LABREF 2015). Several of the measures introduced in this time period were temporary.

A number of countries, including France, Greece, Italy, and Spain, granted temporary lump-sum or one-off payments to unemployed workers not eligible for regular unemployment benefits. In France, these were directly targeted at youth who did not fulfill the eligibility criteria for unemployment benefits (LABREF 2015).

Unemployment benefit levels were increased in Belgium, the Netherlands, Bulgaria, the Czech Republic, and Poland, as well as in Latvia and Finland (European Commission 2011b, 76–78). As an exception to this trend of improving the situation of groups with less coverage, Ireland substantially reduced the benefit level for young claimants (aged 18–24 years) in 2009. However, these reduced benefit rates did not apply to those participating in training or education programs (European Commission 2011c).

Benefit duration of unemployment insurance or assistance was increased in Finland, Romania, Latvia, and Lithuania, although in the latter case only in municipalities that had been hit particularly hard by the crisis (European Commission 2011b, 76–78). Targeting the benefit duration of persons already eligible for unemployment benefits, the Spanish government approved a temporary flat-rate unemployment assistance benefit payable for 6 months to all persons whose unemployment insurance benefits had expired.14 A similar reform was carried out in Portugal. Conversely, Ireland, the Czech Republic, Poland, France, and Denmark decreased the maximum duration of unemployment (p.147) benefits.15 The Irish reform explicitly targeted young youth (aged <18 years) by reducing the duration of Job Benefit from 12 to 6 months for this age group (European Commission 2011a).

Second-tier systems such as social assistance were improved in a number of countries, as evidenced by increases to housing support, for example. Some countries (e.g., Estonia) had planned improvements to their unemployment benefit systems, which then were not implemented or were postponed because of the crisis. Only a few countries had reduced benefits during this initial crisis period as a part of fiscal consolidation measures (e.g., Ireland); in most cases, these reductions concerned benefit duration.

5.4.2.2. Austerity Period

During the economic recession (2008–2009), the focus was often on relaxing eligibility criteria and increasing benefit levels. The austerity period (2010–2014), by contrast, was characterized by tightening eligibility and decreasing benefit levels (see Table 5.2). Reforms relating to eligibility, even when not explicitly geared toward youth, have a particularly disproportionate effect on young unemployed given their shorter average tenure. However, there were also a few countries that relaxed qualifying criteria during this period, often with a view to supporting young people. These reforms usually stipulated a link between passive benefit entitlements and participation in education and training programs (European Commission 2014; MISSOC 2014).16 Here, we provide details regarding a number of reforms explicitly targeting youth (marked with an asterisk in Table 5.2).

In Ireland, benefit levels for those aged 22–26 years were reduced further (a first reduction had already taken place in 2009). Higher rates apply if the jobseeker participates in education or training or has dependent children. Belgium and Denmark tightened qualifying criteria for youth: In 2012, Belgium increased the waiting period before benefit allowance is granted to 12 months for all recipients (previously it had stood at 6, 9, and 12 months). The Belgian benefit is now called “vocational development benefit” and requires proactive steps with regard to finding employment. In Denmark, since 2013, people younger than age 30 years and without education no longer receive social assistance.17 There is an equivalent student benefit if youth embark on education, whereas those not ready for education will still receive social assistance if they participate in activation measures geared at inclusion in education. In Spain, Slovenia, and Italy, on the other hand, qualifying criteria for youth were relaxed during this period—the benefits to be accrued are usually short term and/or means tested. In Spain, for example, a temporary program was introduced in 2011 geared toward youth, long-term unemployed, and other vulnerable groups, making a means-tested flat-rate unemployment subsidy of 6 months dependent on participation in individualized training actions (European Commission 2011a). In Slovenia, qualifying conditions were relaxed for all unemployed in 2011 and were further (p.148) relaxed for those younger than age 30 years in 2013. In Italy, since 2013, young people on apprenticeships are eligible for regular unemployment benefits. The Czech reform shortened the reference period for eligibility (making benefits more difficult to access) but at the same time opened up unemployment benefits to students fulfilling the eligibility criteria (Eurofound 2013). Table 5.2 provides a summary overview of countries that modified their unemployment benefit schemes during the stimulus and austerity periods.18

Clearly, Southern European and Central-Eastern European welfare systems show more activity in relation to changing policies for youth, particularly—but not exclusively—in the austerity period. Thus, it seems that the trend is for greater change in countries that were affected more severely by the Great Recession. At the same time, these countries had a tradition of benefit provision that was not as long-standing or as robust as in corporatist or Nordic countries—traditions that were more neoliberal or relied on familial ties. Moreover, Greece, Ireland, and Portugal—which received bailouts in exchange for implementing programs of economic adjustment described in the so-called Memoranda of Understanding—all feature in Table 5.2, with Ireland and Greece showing a profile of tightening conditions, whereas Portugal has a more mixed profile. Spain and Italy experienced more informal pressure to implement structural reforms. According to our analysis, Spain shows a mixed profile, whereas Italy has an expanding profile, albeit from a very low starting point in terms of benefit coverage, in particular.

Table 5.2 Initial typology of EU27 countries with modifications in unemployment benefit systems directly or indirectly targeted at youth during the first period of crisis (2008–2009) and during the austerity period (2010–2014)

(Temporary) Modifications of

Direction of change

2008–2009

2010–2014

Eligibility (qualifying conditions)

Relaxed

Finland, Italy*, Latvia, Portugal, Sweden(*)

Portugal, Slovenia(*), Spain*

Tightened

Ireland

Belgium*, Czech Republic, Denmark*,1, Greece, Hungary, Romania

Explicitly opened up to new groups of workers

France*, Italy(*), Spain

Czech Republic*, Italy*, Slovenia

Benefit levels

Increasing

Belgium, Bulgaria, Czech Republic, Netherlands, Poland, Slovenia

Belgium, Bulgaria, Slovenia

Lump sum/one-off payment

France*, Greece, Italy, Spain

Spain

Decreasing

Ireland(*)

Greece, Ireland*, Latvia, Poland, Portugal, Romania, Spain

Benefit duration

Increasing

Finland, Latvia, Lithuania, Portugal, Romania, Spain

Denmark

Decreasing

Czech Republic, Denmark, France, Ireland, Poland

Greece

Notes: Because of the complexity and the variation of benefit systems, some of the changes are difficult to classify. In 2013, for example, the number of days for which unemployment benefit could be paid was capped in Greece. The maximum of 450 days within a 4-year period now cannot be extended if one becomes unemployed again, and this affects both benefit duration and general eligibility. We have therefore listed Greece in both rows. In addition, in some cases there are uncertainties as to the exact year in which the reforms became active.

(*) = Reform explicitly relating to youth.

((*)) = Parts of the reform explicitly relating to youth.

(1) = Refers to social assistance.

Source: Authors’ depiction based on European Commission (2011a, 2011c), Eurofound (2013), Leschke (2013), MISSOC (2014), and LABREF (2015).

5.4.3. Income Security: Access to Unemployment Benefits for Youth During the Crisis

The remainder of Section 5.4 examines the access of youth versus adults to unemployment benefits during different stages of the Great Recession. The aim is to explore the question as to whether youth were disproportionately affected during the crisis. Special extracts from aggregate EU-LFS data are used, and we present figures regarding persons who are registered with the Public Employment Service (PES) and are in receipt of unemployment benefit or assistance. We examine here exclusively the short-term unemployed (1 or 2 months).19 Given that the EU-LFS information on people in receipt of unemployment benefits has been identified as unreliable as a result, among other things, of under- and misreporting (Immervoll, Marianna, and Mira D’Ercole 2004, 58–67),20 when we report country results, we show relative distributions and changes over time in benefit coverage rather than absolute levels (for a similar strategy, see OECD 2011). It is unlikely that reporting errors will vary substantially between different age groups in the same country or over time. Table 5.3 uses ranges on benefit coverage in 2013 with regard to the adult population (aged 30–64 years) in order to put the following analysis into perspective.

Table 5.3 Coverage with unemployment insurance or assistance benefits as share of all unemployed adults (aged 30–64 years) in EU countries, 2013 (EU27 = 44.7%)

Coverage (%)

Countries

<20

Italy, Malta, Romania

≤ 20 < 35

Bulgaria, Lithuania, Poland, Slovakia

≥35 to <50

Cyprus, Estonia, Greece, Hungary, Latvia, Luxembourg, Portugal, Slovenia, Sweden, United Kingdom

≥50 to ≤65

Austria, Czech Republic, France, Spain

≥65

Belgium, Denmark, Finland, Germany

Notes: Duration of unemployment 1 or 2 months. Registered with PES and receiving benefits or assistance as percentage of all unemployed.

Source: Eurostat EU-LFS, special extracts.

As a first indication, Figure 5.4 highlights differences in unemployment benefit coverage for the EU27 by previous contract type, age, and for three time (p.149) points, using the main reason for having left the previous job as a proxy for permanent or temporary job prior to being unemployed. We calculate the coverage rate as those registered with the PES and receiving benefits or assistance as a percentage of all unemployed. Older youth (although only limited data are available) are doing better than younger youth in this respect, and if they have been on a permanent contract prior to unemployment, their coverage rate is (p.150) in fact close to that for adults. Distinguishing now by previous contract type, temporary workers in all age groups are less likely than permanent employed to have access to unemployment benefits if they become unemployed. Previous temporary workers in the young youth group are least likely to have access. The differences across age may be due either to the explicit difference in youth access to benefits or to variations across age groups in the distribution of different types of temporary contracts or both. In line with the improvements in benefit design during the stimulus period, the situation of temporary workers seems to have improved somewhat in the first years of the crisis. However, the positive development stalled and indeed turned negative during austerity. This confirms our previously mentioned findings that national and supranational responses to the exclusion of certain labor market groups from benefit access were not sustained.

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.4 Short-term unemployed in receipt of unemployment benefit by previous contract type (temporary vs. permanent), age group, and year (2007, 2009, and 2013) in EU27 (% of all unemployed).

Source: Eurostat EU-LFS, special extracts.

Figure 5.5 shows the benefit coverage of youth as a share of adults for all EU27 countries with complete data for 2013. With a few exceptions (RO, LT, and EE), in the majority of countries youth are considerably less likely to receive unemployment benefits than adults. On average, younger youth have a coverage rate corresponding to 30% of that of adults. Coverage for older youth corresponds to 70% of the adult rate. Regarding young youth in Germany, the United Kingdom, Belgium, and Austria, the coverage is approximately one-half that of adults. The examples of the United Kingdom and Germany show that for youth coverage, universal basic benefit schemes (as second-tier benefits) work relatively well. However, the benefits payable under these schemes are means tested and relatively low. In all other countries with available information, the younger youth share compared to adults lies under 40%, while it is below 20% in eight countries. Among the countries with very low youth coverage, the majority also have high temporary employment shares among youth, which points to a vicious relationship between flexibility and security. It is important to square these findings with youth unemployment rates, generosity of benefits, and other transition options such as apprenticeships or training or education with compensation.

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.5 Benefit coverage of youth (aged 15–24 and 25–29 years) as share of adults (aged 30–64 years) by country, 2013.

Source: Eurostat EU-LFS, special extracts.

Figure 5.6 shows relative changes in benefit coverage during the crisis period for young youth using 2007 as the basis. For ease of readability, we only display data for 2009 (the year of the recession when most money was spent on stimulus measures) and the most recent available year, 2013. The majority of countries with available information saw an increase in unemployment benefit coverage of youth during the first part of the crisis, with the most pronounced increases occurring in Slovenia, Portugal, Denmark, and Spain. Both improvements in access to unemployment benefit systems and also, importantly, changing characteristics of newly unemployed during the crisis will have played a role here.21 When we compare 2007 precrisis data with 2013 austerity-period data, we see (p.151) (p.152) that only for a limited number of countries is this positive coverage trend still visible. It is most pronounced in Italy (not included in the figure), Greece, and Denmark—countries that have medium to low relative coverage rates of youth as compared to adults (see Figure 5.5). Benefit coverage was lower in 2013 than in 2007 in Spain, Portugal, and Cyprus, among others.

Labor market flexibility and income securityChanges for European youth during the Great Recession

Figure 5.6 Evolution of benefit coverage for youth (aged 15–24 years) by country during crisis (stimulus and austerity periods); 2007 = 100.

Source: Eurostat EU-LFS, special extracts.

Table 5.4 summarizes the findings of the previous analysis, also including information for older youth and adults.

Table 5.4 Relative change in access to unemployment insurance and assistance benefits for EU27 countries before crisis (2007) and in stimulus (2009) and austerity (2013) periods

Age group (years)

Substantial decrease in access

Substantial increase in access

Missing data

EU27 (relative)

EU27 (absolute)

15–24

2009

CY

EL, SE, FR, SK, ES, DK, PT, SI, IT

IE, NL, BG, EE, LT, LU, LV, MT

99

–0.1

2013

CY, PT, CZ, PL, ES, AT (2012), HU

RO, DK, EL, IT

81

–3.3

25–29

2009

EL

PL, UK, PT, CY, ES, SI, IT, RO

IE, NL, BG, EE, LT, LU, MT

100

0.1

2013

EL, SE, AT (2012)

UK, PL, RO, SI, IT

85

–5.4

30–64

2009

LU

IT, PT, BG, LV, ES, EE, LT, MT

IE, NL

102

0.9

2013

MT, RO

UK, ES, IT

104

1.7

Notes: Cut-off point for substantial decrease is <75% on 2007 value and for substantial increase is >125% on 2007 value. Duration of unemployment 1 or 2 months. Registered with PES and receiving benefits or assistance as percentage of all unemployed.

Source: Eurostat EU-LFS, special extracts.

The analysis in this chapter has highlighted two important issues. First, it has emerged that it is important not to limit such a study to youth between ages 15 and 24 years or to merge the younger and older (aged 25–29 years) youth groups. Older youth have been shown to be better off than younger youth in terms of external (but not internal) numerical flexibility, although we still lack detailed and age-specific information on compensation during short-time working. Older youth are also better off with regard to income security. At the same time, both youth groups differ from adults in that they are more affected by external numerical flexibility and are less likely to enjoy internal numerical flexibility or income security. Second, this analysis has highlighted the complexity of unemployment benefit schemes; how greatly they vary across Europe in terms of both access and generosity, as well as availability of secondary schemes; and their frequent adjustment (not always in a strategic way, as seems to have been the case during the economic recession of 2008–2009). In this regard, comparative analysis on the dimension of benefit access is difficult. Attempts to create “simple” indices for benefit coverage—as they exist for benefit generosity—have so far not been successful (Alphametrics Ltd. 2009). The data testify to this complexity. Indeed, because the EU-LFS (in addition to (p.153) other potential comparability weaknesses) does not allow a distinction between insurance and assistance benefits, we questioned the reliability of the information on benefit coverage rates in a cross-national perspective and therefore only used relative change within countries in our analysis.

5.5. Conclusions

The previous analysis has illustrated that youth are not only more likely to hold temporary contracts with limited job security and to experience unemployment with potential long-term scarring effects but also less likely to have access to unemployment benefits than adults. Limited unemployment benefit coverage comes about due to their lacking, or shorter-term, labor market experience, which translates into difficulties in fulfilling the eligibility conditions for access to unemployment benefits, given that these schemes are still predominantly modeled on so-called standard employment. This combination of external numerical flexibility and lower income security during unemployment can be termed a vicious relationship between flexibility and security and seems to be the predominant long-term trend despite temporary improvements during the economic recession (2008–2009).

(p.154) In light of surging youth unemployment—and indeed a youth unemployment crisis—in a number of European countries, concern about the previously overlooked explicit or implicit limited access of youth to unemployment benefit schemes emerged on the international and supranational agenda (e.g., of the OECD and the European Commission). The previous focus on supply-side measures was no longer deemed very fruitful, given the lack of realistic possibilities to include large numbers of youth in employment again within a reasonable period of time. Several European countries—particularly, but not exclusively, during the economic recession (2008–2009)—accordingly improved income security for youth. More generally, temporary workers also experienced improvements with regard to access to and the generosity of unemployment benefit schemes. This was achieved by relaxing qualifying criteria, offering lump-sum or one-off payments, and increasing benefit levels or benefit duration. However, already during the economic recession (2008–2009), the reforms in terms of unemployment benefits not only took the direction of greater generosity. Although no countries restricted access to benefits during the stimulus period, and only Ireland cut benefit levels, a sizable number of countries shortened the duration of benefits. In the second crisis period (2010–2014), characterized by austerity policies, eligibility was tightened and benefit levels were reduced in many countries. There was still a focus in a few countries on improving the income security of youth, though usually conditional on participation in education or training. Increased coupling of benefit receipt with enforcement of education or training components for youth seems to be a more general recent trend according to our analysis. These developments have been summarized in Table 5.2.

More activity in relation to changing unemployment benefit policies is recorded for Southern European and Central-Eastern European welfare systems, the bulk of which were affected more severely by (youth) unemployment and at the same time had more limited unemployment benefit provisions than corporatist and Northern European countries. Several of the countries that were recommended to implement fiscal consolidation and structural reforms feature in Table 5.2 and for the most part show a profile of expanding eligibility during the severe recession of 2008–2009 and tightening conditions again at least on some dimensions thereafter, illustrating the short-term nature of upward adjustments.

Using the EU-LFS data on access to unemployment benefits and notwithstanding the limitations of these data (especially compositional effects, besides changes in access due to changing eligibility), our analysis reveals—in line with the institutional changes outlined previously—an improved situation in coverage for both the youth and adult groups during the economic recession of 2008–2009 (for details, see Table 5.4). When we take into account the austerity period, we see that on European average, both younger and older youth are worse off than before the Great Recession. This is not the case for adults. Accordingly, we can see that the benefit coverage of youth, which is considerably lower than that of adults to start with, has decreased further in a number of countries. This (p.155) outcome highlights the weaknesses in the system for protecting against shocks and illustrates that the current design of unemployment benefit systems—despite short-term adjustments—tends to protect older workers with more secure employment contracts as opposed to younger workers, who carry the bulk of labor market flexibilization and at the same time lack an income-security cushion. This finding corroborates longer term dualization trends in labor market and social security systems between those who are well protected (more often people in standard employment) and those who are poorly protected (more often people in nonstandard employment), including along the lines of age, as highlighted, for example, by Seeleib-Kaiser, Saunders, and Naczyk (2012) for Germany and the United Kingdom.

Reliable unemployment benefits of a certain generosity and duration make it possible to search for an adequate job. Income security during transitions thus can facilitate a better match between skills and occupation instead of forcing unemployed youth to take the first best option—including informal or casual labor that will not contribute to increasing the tax and contribution base for funding social security schemes in the future. More comprehensive and reliable unemployment benefit coverage can also have other positive effects—both from the viewpoint of the individual and from that of wider society—in that it might place youth in a situation of independence from their families, in which they can consider forming families of their own. The trends we are witnessing and that were already evident before the Great Recession imply, however, that these functions of social protection are being weakened.

When examining the interface of flexibility and security in a comparative perspective, it is important to consider the context and potential functional equivalents. A case in point here are countries such as Spain, Portugal, Cyprus, and Slovakia, which combine very high youth unemployment and high temporary employment shares (external numerical flexibility) with very low relative benefit coverage rates (income security). On the other hand, the low benefit coverage rate for young youth in Denmark might be less problematic in light of Denmark’s relatively small youth unemployment population and its generous education allowance and comparatively generous social assistance—both of which can act as functional equivalents. Similarly, short-time working measures also acted as functional equivalents to unemployment benefits during the period under observation, and young people were relatively well represented. Short-time working measures were newly introduced in a number of countries (often temporarily) and were also expanded to include new groups of workers. Such measures are an instrument of internal numerical flexibility that enables job preservation while at the same time often cushioning working-time reductions to a certain degree and thereby granting some income security.

In summary, although virtuous relationships between flexibility and security were strengthened for youth and other disadvantaged labor market groups in the first part of the crisis—when these groups had been severely (p.156) affected by unemployment—this remained a short-term trend in most cases. In overemphasizing labor market flexibility to the detriment of income security, the more recent developments point again to trade-offs and vicious relationships and thereby continue the precrisis trend toward dualization and segmentation in accordance with age, gender, and other sociodemographic characteristics.

(p.158)

References

Bibliography references:

Alphametrics Ltd. 2005. “Feasibility Study: Indicators on Coverage of Social Security Systems for People in Flexible Employment.” Study commissioned by the European Commission, VC/2003/0228. Royston: Alphametrics Ltd.

Alphametrics Ltd. 2009. “Flexicurity: Indicators on the Coverage of Certain Social Protection Benefits for Persons in Flexible Employment in the European Union.” Study commissioned by the European Commission, VC/2007/0780. Royston: Alphametrics Ltd.

Anxo, Dominique, and Jacqueline O’Reilly. 2000. “Working-Time Regimes and Transitions in Comparative Perspective.” In Working-Time Changes. Social Integration Through Transitional Labour Markets, edited by Jacqueline O’ Reilly, Inmaculada Cebrián, and Michel Lallement, 61–92. Cheltenham, UK: Elgar.

Arpaia, Alfonso, Nicola Curci, Eric Meyermans, Jörg Peschner, and Fabiana Pierini. 2010. “Short Time Working Arrangements as Response to Cyclical Fluctuations.” Occasional Papers 64. Brussels: European Union.

Burroni, Luigi, and Maarten Keune. 2011. “Flexicurity: A Conceptual Critique.” European Journal of Industrial Relations 17 (1): 75–91.

Clasen, Jochen, and Daniel Clegg, eds. 2011. Regulating the Risk of Unemployment: National Adaptations to Post-Industrial Labour Markets in Europe. Oxford: Oxford University Press.

Council of the European Union. 2010. “Council Decision of 21 October 2010 on Guidelines for the Employment Policies of the Member States (2010/707/EU).” Official Journal of the European Union L 308: 46–51.

Council of the European Union. 2015. “Council Decision (EU) 2015/1848 on Guidelines for the Employment Policies of the Member States for 2015.” Official Journal of the European Union L 268: 28–32.

Del Monte, Micaela, and Thomas Zandstra. 2014. “Common Unemployment Insurance Scheme for the Euro Area.” Cost of Non-Europe Report PE 510.984. Brussels: European Parliamentary Research Service, European Added Value Unit.

(p.159) Dullien, Sebastian. 2013. “A Euro-Area Wide Unemployment Insurance as an Automatic Stabilizer: Who Benefits and Who Pays?” Paper prepared for the European Commission (DG-EMPL). Brussels: European Commission.

Eurofound. 2003. Flexibility and Social Protection: Reconciling Flexible Employment Patterns Over the Active Life Cycle with Security for Individuals. Luxembourg: Publications Office of the European Union.

Eurofound. 2013. Young People and Temporary Employment in Europe. Luxembourg: Publications Office of the European Union.

European Commission. 2007. “Towards Common Principles of Flexicurity: More and Better Jobs Through Flexibility and Security.” Communication from the Commission COM (2007) 359 final. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2007:0498:FIN

European Commission. 2009. “Labour Flows, Transitions and Unemployment Duration.” In Employment in Europe 2009, 47–103. Luxembourg: Office for Official Publications of the European Communities.

European Commission. 2010a. “An Agenda for New Skills and Jobs: A European Contribution Towards Full Employment.” Communication from the Commission COM (2010) 682 final. http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2010:0682:FIN

European Commission. 2010b. “Labour Flows, Transitions and Unemployment Duration.” In Employment in Europe 2010, 75–107. Luxembourg: Publications Office of the European Union.

European Commission. 2010c. Labour Market and Wage Developments in 2009. European Economy 5 (provisional version). Luxembourg: Publications Office of the European Union.

European Commission. 2011a. Adapting Unemployment Benefits to the Economic Cycle 2011. European Employment Observatory Review. Luxembourg: Publications Office of the European Union.

European Commission. 2011b. Labour Market Developments in Europe, 2011. European Economy 2. Brussels: Directorate-General of Economic and Financial Affairs.

European Commission. 2011c. Youth Employment Measures 2010. European Employment Observatory Review. Luxembourg: Publications Office of the European Union.

European Commission. 2014. Stimulating Job Demand: The Design of Effective Hiring Subsidies in Europe 2014. European Employment Policy Observatory Review. Luxembourg: Publications Office of the European Union.

European Trade Union Confederation. 2007. “Flexicurity will get nowhere without reinforcing rights for workers, says the ETUC” Press Release 13.09.2007. Brussels: European Trade Union Confederation. https://www.etuc.org/en/pressrelease/flexicurity-will-get-nowhere-without-reinforcing-rights-workers-says-etuc

(p.160) Eurostat EU-LFS. n.d. European Union Labour Force Survey data, special extracts. http://ec.europa.eu/eurostat/web/microdata/european-union-labour- force-survey

Gangl, Markus. 2004. “Welfare States and the Scar Effects of Unemployment: A Comparative Analysis of the United States and West Germany.” American Journal of Sociology 109 (6): 1319–64.

Gash, Vanessa. 2008. “Preference or Constraint? Part-Time Workers’ Transitions in Denmark, France and the United Kingdom.” Work, Employment and Society 22 (4): 655–74.

Grimshaw, Damian, and Jill Rubery. 1997. “Workforce Heterogeneity and Unemployment Benefits: The Need for Policy Reassessment in the European Union.” Journal of European Social Policy 7 (4): 291–318.

Heise, Arne, and Hanna Lierse. 2011. Budget Consolidation and the European Social Model: The Effects of European Austerity Programmes on Social Security Systems. Berlin: Friedrich-Ebert-Stiftung.

Heyes, Jason. 2011. “Flexicurity, Employment Protection and the Jobs Crisis.” Work, Employment and Society 25 (4): 642–57.

Hijzen, Alexander, and Sébastien Martin. 2012. “The Role of Short Term Working Schemes During the Global Financial Crisis and Early Recovery: A Cross Country Analysis.” OECD Social, Employment and Migration Working Paper 144. Paris: OECD.

Hijzen, Alexander, and Danielle Venn. 2011. The Role of Short-Time Work Schemes During the 2008–09 Recession. OECD Social, Employment and Migration Working Paper 115. Paris: Organization for Economic Co-operation and Development.

Ibsen, Christian L., 2011. “Strained Compromises? Danish Flexicurity During Crisis.” Nordic Journal of Working Life Studies 1 (1): 45–65.

Immervoll, Herwig, Pascal Marianna, and Marco Mira D’Ercole. 2004. “Benefit Coverage Rates and Household Typologies: Scope and Limitations of Tax-Benefit Indicators.” OECD Social, Employment and Migration Working Paper 20. Paris: OECD.

Klammer, Ute, and Katja Tillmann. 2001. Flexicurity: Soziale Sicherung und Flexibilisierung der Arbeits- und Lebensverhältnisse. Düsseldorf: Ministerium für Arbeit und Soziales, Qualifikation und Technologie des Landes Nordrhein-Westfalen.

Kvist, Jon, Simon Grundt Straubinger, and Anders Freundt. 2013. “Measurement Validity in Comparative Welfare State Research: The Case of Measuring Welfare State Generosity.” European Journal of Social Security 15 (4): 321–40.

LABREF. 2015. LABREF Labour Market Reforms database (European Commission and Employment Committee). https://webgate.ec.europa.eu/labref/public

(p.161) Lefresne, Florence. 2008. “Regard comparatif sur l’indemnisation du chômage: la difficile sécurisation des parcours professionnels.” Chronique Internationale de l’IRES 115. Paris: Istitut de Recherches Economiques et Sociales.

Lehndorff, Steffen, ed. 2014. Divisive Integration: The Triumph of Failed Ideas—Revisited. Brussels: ETUI.

Leschke, Janine. 2008. Unemployment Insurance and Non-Standard Employment: Four European Countries in Comparison. Wiesbaden: VS Verlag für Sozialwissenschaften.

Leschke, Janine. 2009. “The Segmentation Potential of Non-Standard Employment: A Four-Country Comparison of Mobility Patterns.” International Journal of Manpower 30 (7): 692–715. [Special issue]

Leschke, Janine. 2013. “La crise economique a-t-elle accentué la segmentation du marché du travail et de la protection sociale? Une analyse des pays de l’UE (2008–2010).” Revue Française des Affaires Sociales 4: 10–33. [Special issue]

Leschke, Janine, Günther Schmid, and Dorit Griga. 2007. “On the Marriage of Flexibility and Security: Lessons from the Hartz-Reforms in Germany.” In Flexicurity and Beyond: Finding a New Agenda for the European Social Model, edited by Henning Jørgensen and Per Kongshøj Madsen, 335–64. Copenhagen: Djøf Forlag.

Madsen, Per Kongshøj, Oscar Molina, Jesper Møller, and Mariona Lozano. 2013. “Labour Market Transitions of Young Workers in Nordic and Southern European Countries: The Role of Flexicurity.” Transfer: European Review of Labour and Research 19 (3): 325–43.

MISSOC. 2014. “Comparative Tables.” https://www.missoc.org/missoc-database/comparative-tables

Muffels, Ruud, ed. 2008. Flexibility and Employment Security in Europe: Labour Markets in Transition. Cheltenham, UK: Elgar.

Organization for Economic Co-operation and Development (OECD) “OECD Benefits and Wages. Country Policy Descriptions.” http://www.oecd.org/els/soc/benefits-and-wages-country-specific-information.htm

Organization for Economic Co-operation and Development (OECD). 2010a. “How Good Is Part-Time Work?” In Employment Outlook 2010, 211–66. Paris: OECD.

Organization for Economic Co-operation and Development (OECD). 2010b. “Detailed Description of Part-Time Work Regulations and Unemployment Benefit Schemes Affecting Part-Time Workers.” Supporting material for Chapter 4. “How Good Is Part-Time Work?” In Employment Outlook 2010. Paris: OECD.

Organization for Economic Co-operation and Development (OECD). 2011. “Income Support for the Unemployed: How Well Has the Safety-Net Held Up During the ‘Great Recession’?” In OECD Employment Outlook 2011, 15–83. Paris: OECD.

(p.162) Organization for Economic Co-operation and Development (OECD). 2013. “Protecting Jobs, Enhancing Flexibility: A New Look at Employment Protection Legislation.” In OECD Employment Outlook 2013, 65–126. Paris: OECD.

Organization for Economic Co-operation and Development (OECD). 2014. “Non-Regular Employment, Job Security and the Labour Market Divide.” In OECD Employment Outlook 2014, 141–209. Paris: OECD.

Organization for Economic Co-operation and Development (OECD). 2016. “OECD Indicators of Employment Protection. Annual Time Series Data 1985–2013.” Paris: OECD. http://www.oecd.org/els/emp/oecdindicatorsofemploymentprotection.htm

Sanz de Miguel, Pablo. 2011. “Government Endorses New Measures to Encourage Growth and Reduce Deficit.” EurWORK, European Observatory of Working Life, March 1. Dublin: Eurofound. https://www.eurofound.europa.eu/is/observatories/eurwork/articles/other/government-endorses-new-measures-to-encourage-growth-and-reduce-deficit

Schmid, Günther. 2008. Full Employment in Europe: Managing Labour Market Transitions and Risks. Cheltenham, UK: Elgar.

Schmid, Günther, and Bernard Gazier, eds. 2002. The Dynamics of Full Employment: Social Integration Through Transitional Labour Markets. Cheltenham, UK: Elgar.

Schömann, Isabelle, and Stefan Clauwaert. 2012. “The Crisis and National Labour Law Reforms: A Mapping Exercise.” ETUI Working Paper 04. Brussels: European Trade Union Institute.

Schulze Buschoff, Karin, and Paula Protsch. 2008. “(A-)typical and (In-)Secure? Social Protection and ‘Non-Standard’ Forms of Employment in Europe.” International Social Security Review 61 (4): 51–73.

Seeleib-Kaiser, Martin, Adam Saunders, and Marek Naczyk. 2012. “Shifting the Public–Private Mix: A New Dualization of Welfare.” In The Age of Dualization: The Changing Face of Inequality in Deindustrializing Societies, edited by Patrick Emmenegger, Silja Häusermann, Bruno Palier, and Martin Seeleib-Kaiser, 151–75. New York: Oxford University Press.

Standing, Guy. 2002. Beyond the New Paternalism: Basic Security as Equality. London: Verso.

Talós, Emmerich, ed. 1999. Atypische Beschäftigung: Internationale Trends und sozialstaatliche Regelungen. Vienna: Manz.

Tangian, Andranik. 2007. “European Flexicurity: Concepts, Methodology and Policies.” Transfer: European Review of Labour and Research 13 (4): 551–73.

Van Oorschot, Wim. 2013. “Comparative Welfare State Analysis with Survey-Based Benefit Recipiency Data: The ‘Dependent Variable Problem’ Revisited.” European Journal of Social Security 15 (3): 224–48.

Wilthagen, Ton, and Frank Tros. 2004. “The Concept of ‘Flexicurity’: A New Approach to Regulating Employment and Labour Markets.” Transfer: European Review of Labour and Research 10 (2): 166–86.

Notes:

(1) We thank Ute Klammer, Igor Guardiancich, Martin Seeleib-Kaiser, Paola Villa, and Traute Meyer, as well as the participants at the Turin and Krakow STYLE meetings, for very comprehensive and useful comments on earlier versions of this chapter.

(2) Notable exceptions are two studies commissioned by the European Parliament on indicators for monitoring the coverage of social security systems for people in flexible employment (Alphametrics Ltd. 2005, 2009).

(3) Clasen and Clegg (2011) and Lefresne (2008), for example, provide country case studies addressing the extent to which benefit schemes have adapted—or have failed to adapt—in recent decades to the major changes affecting labor markets.

(4) The Lisbon Strategy was launched by the European Commission in 2000, listing among its aims the generation of growth and of more and better jobs; in 2010, it was replaced by the Europe 2020 strategy for “smart, sustainable and inclusive growth.”

(5) See, for example, the discussion on the single open-ended contract, which, however, has been ardently criticized by ETUC.

(6) For instance, opening them up to more firms than previously; less bureaucratic access conditions; and temporary increases in the level, duration, and/or coverage of public financial support.

(7) Greece has introduced such schemes for small and medium-sized enterprises, while Sweden has for manufacturing, for example (LABREF 2015).

(8) Note, however, that because of differences in the definition and delimitation of short-time working, the EU-LFS figures diverge somewhat from other available figures, including OECD and national-level data.

(9) Based on country-specific information from OECD Benefits and Wages, 12 EU countries have unemployment assistance schemes (AT, DE, EE, EL, ES, FI, FR, IE, MT, PT, SE, and UK). However, in countries that do not have an unemployment assistance scheme, social assistance can act as a functional equivalent, although it is potentially more stigmatizing.

(10) Examples are Estonia, Greece, and Portugal (OECD Benefits and Wages).

(11) For example, in Ireland, Job Allowance is not available to those who are younger than age 18 years or who have been out of school for less than 3 months. It can, however, be paid to those in ALMPs or with dependents (p.157) (European Commission 2011a). In both Austria and Ireland, unemployment assistance cannot be accessed directly but, rather. only after unemployment insurance benefits have been exhausted.

(12) EPL is another area of reform that is important for understanding this topic. However, we confine ourselves here to an analysis of policies and practices related to income security because this in itself is quite voluminous and complex. Furthermore, focusing on income security measures prioritizes the security offered to people outside of the working relationship and not just to those in work (as in the case of EPL).

(13) Changes with regard to contributions that took place in a number of countries are not reviewed here because they do not usually have a direct impact on the coverage of nonstandard workers. They can, however, have an indirect impact if they create incentives to hire individuals on standard rather than nonstandard contracts (see, e.g., Spain, where in the past the government has tried to encourage employers to hire individuals on regular contracts by reducing related contributions).

(14) Unemployment assistance in Spain is usually restricted to specific labor market groups, such as unemployed persons with family responsibilities or older workers. The special benefit introduced in January 2009 was abolished in February 2011; it had covered approximately 700,000 unemployed people (Sanz de Miguel 2011).

(15) Denmark formerly had a comparatively long universal duration of unemployment insurance benefits of 4 years; in 2010, this was reduced to 2 years.

(16) Labor market integration, for example, is promoted through one-off benefits, special benefits for the young, and benefits for partial and temporary employment (for details, see MISSOC 2014).

(17) Given its level, Danish social assistance can be viewed as a functional equivalent to unemployment benefits.

(18) It is important to note here that it is challenging to compile extremely comprehensive data on these developments. The difficulty lies in the frequent changes to policy, in the time limits imposed on some policies, and in the time that is needed to establish the impact of general policies on youth. Here, we draw on MISSOC and LABREF as sources, in addition to all publications that to our knowledge are available on the topic at the time of writing. However, our study represents a first effort at mapping this policy landscape, and we believe that more work is needed to fully complete the analysis. We do not distinguish between different causes for unemployment benefit reforms; although most will have been directly linked to the (unemployment) crisis, in some countries changes might also be part of a longer term reform agenda.

(19) This allows us to get around issues such as varying average duration of unemployment (different long-term unemployment rates), differences in duration of unemployment insurance benefits, and timing of granting of unemployment assistance benefits across countries.

(20) Differences in the wording of survey questions across countries play a crucial role here. Immervoll, Marianna, and Mira D’Ercole (2004) show for selected countries that the figures on unemployment benefit receipt rates from administrative data sources differ substantially from those from labor force surveys, with no clear direction in difference.

(21) For instance, men were more affected by unemployment than women in the first part of the crisis, whereas—due to being more often in standard employment—they are usually more likely to fulfill eligibility criteria for unemployment benefits.