Temporary employment: The trade-off between efficiency and equity
Elke Jahn, Regina T. Riphahn, Claus Schnabel 10 October 2012
Economic policymakers across Europe have sought to increase labour market flexibility by promoting the use of temporary employment. This column points to a possible trade-off between efficiency and equity when deregulating labour markets, suggesting that flexible forms of employment can be both a boon and a bane for labour markets and for society as a whole.
Over the last three decades, the use of flexible forms of employment such as fixed-term and temporary agency work contracts has increased substantially throughout much of Europe. This development has been driven by government efforts to ease restrictions on temporary employment, whereas the regulation of permanent contracts has been left essentially unaltered. The reforms of temporary employment have intended to increase overall employment by lowering dismissal and adjustment costs for flexible jobs and thereby providing firms with new opportunities.
unemployment, temporary contracts, equity, efficiency
Assessing the recent labour market agreement in France
Gilles Saint-Paul 01 February 2008
France has agreed a raft of labour market reforms. Here one of France’s most market-oriented labour economists evaluates the likely impact, concluding that it’s an improvement, but heightens incentives to become unemployed.
In my view, the recent agreement between employers and unions on labour market reforms is globally positive. While it is not a step in the direction of a fully flexible labour market (but this is not on the agenda anyway), it exploits existing margins of improvements in order to reduce non-wage labour costs to firms – in particular, the ones they face when deciding to get rid of a worker – while preserving the protection of the workers as they move between jobs. We are moving to a model of labour relations which is not perfect, but is a clear improvement over the present one.
France, unemployment, labour market reforms, benefit system, turnover costs, temporary contracts