Labor Market Institutions and the Role of Elites in Flexicurity Societies

Peter Flaschel, Alfred Greiner and Sigrid Luchtenberg

Review of Political Economy, 2012, vol. 24, issue 1, 103-129

Abstract: The paper argues that a process of capital accumulation exhibiting recurrent mass unemployment—due to the conflict over income distribution—does not represent a process that is adequate for a democratic society in the long run. The paper develops a basic macrodynamic framework where this process of cyclical growth is overcome by an ‘employer of first resort’ (an entity that provides employment security but not job security), added to an economic reproduction process that is highly competitive (flexible). Such a flexicurity system is characterized by high labor and capital mobility, with fluctuations of employment in the private sector made socially acceptable through a second labor market where all remaining workers are able to find meaningful occupation and sufficient income. We study on this basis a disaggregation of the labor market into skilled and high-skilled labor, as well as professional and political elites. The stability and sustainability propositions of the homogeneous labor case generalize to this extended situation.

Date: 2012
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DOI: 10.1080/09538259.2011.636605

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