Strained compromises? Flexicurity during crisis

Paper by Christian Lyhne Ibsen

The Danish version of flexicurity is not only about a balance between labour market flexibility and social security. Arguably, it is also series of more or less stable underlying compromises between social partners about the main mechanisms and aims of labour market regulation which - supposedly - should be focused on employment rather than jobs and competition on quality rather than on labour costs. However, most studies on Danish flexicurity have been carried out under favourable economic conditions with social partners almost naturally agreeing to the merits of the model - at least in principle. But has the current recession challenged these compromises? The present paper analyses the robustness of agreement by comparing social partner responses before and during the current economic recession. The evidence suggests that the underlying compromises are indeed strained by the economic cycle which underlines the dangers of building models based on short periods of stability.

Article for the IIRA Regional Congress, June 28th to July 1st 2010, Copenhagen