Symposium Introduction: Labour Market Reforms, Employment Performance, Employment Quality, and Changing Social Risks
| Date | 01 March 2015 |
| DOI | http://doi.org/10.1111/bjir.12116 |
| Published date | 01 March 2015 |
| Author | Sabina Avdagic,Colin Crouch |
Symposium Introduction: Labour Market
Reforms, Employment Performance,
Employment Quality, and Changing
Social Risks
Sabina Avdagic and Colin Crouch
Labour market reforms have been high on the political agendas of European
governments in recent times. Ever since the early 1990s, when European
economies experienced considerably higher unemployment rates than the
United States, orthodox economists have insisted on a need for labour
market deregulation. In this view, institutions such as strict employment
protection legislation, generous unemployment benefits and strong unions,
are seen as impediments to employers’ ability to adjust quickly to changing
market conditions, and thus the underlying reason for Europe’s high unem-
ployment. Employment protection in particular has been portrayed as a key
obstacle to job creation. Because employers anticipate the potential future
costs of dismissals, it is argued, they will refrain from hiring new workers
even during economic upturns if the restrictions on dismissals and severance
payments are high (e.g. Lazear 1990; Siebert 1997; St Paul 2004). Strict
employment protection is also thought to be responsible for longer spells of
unemployment, because it reduces flows in and out of employment
(Blanchard and Portugal 2001). In this perspective, job security regulations
generate high turnover costs, which insulate insiders (employees) from com-
petition of outsiders (unemployed) and encourage them to pursue wage hikes
(Lindbeck and Snower 1990).
Endorsed forcefully by the OECD Jobs Study (1994), the deregulatory view
has dominated policy debates over the last two decades. Although the OECD
has subsequently moderated its advocacy of across-the-board deregulation
(Bassanini and Duval 2009; OECD 2004), this idea has underpinned reforms
that brought about a weakening of employment protection in a number of
European countries. While the type and scope of reforms differs across
countries, the common denominator has been a move from standard forms of
employee protection to the maximization of labour force participation.
During 1990–2007 the EU countries undertook over 100 deregulatory
reforms. About a quarter of those were structural and involved a significant
weakening of employment protection for standard workers, while the rest
Sabina Avdagic is at the University of Sussex. Colin Crouch is at the University of Warwick.
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British Journal of Industrial Relations doi: 10.1111/bjir.12116
53:1 March 2015 0007–1080 pp. 1–5
© 2015 John Wiley & Sons Ltd/London School of Economics. Published by John Wiley & Sons Ltd,
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