Labour Market Policy in Europe: What Reactions Facing the Economic Crisis ?

Before the crisis, labour market policies have undergone several years of reforms, focused on activation, work incentives, and flexicurity. Most European countries share the same trends, partly supported by the European Employment Strategy since 1997, even though important differences between national models remain. The economic downturn in 2007 has led to a very spectacular rise in unemployment in some countries, especially concentrated among low educated and young men. Facing this new context, the reactions of labour market policies seem ambiguous. On the one hand, institutional reforms and in work incentives still follow previous reform trends, especially the activation framework. On the other hand, a large number of countries also develop internal flexibility devices (including partial unemployment), and reinforce unemployment insurance or minimum income policies. These types of policies may have contributed to temper the direct impact of the crisis on labour market trends (especially in continental countries). They also lead to the reintroduction of some old debates (on working time sharing, on the minimum wage), especially in the new member states. Nevertheless, it seems that the turn towards restrictive budgetary policy in the first half of 2010 is compromising these trends, and even endangering last decade’s virtuous models, especially the Danish model.

Christine Erhel, Socio-Économie du Travail n°33 (Économies et Sociétés, tome XLV), août 2011, p.1354-p. 1359.

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