Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States

Werner Eichhorst and Paul Marx ()
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Paul Marx: University of Bonn

No 5035, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The paper compares employment structures in five Continental welfare states. These countries feature broad similarities in their reliance on a more dualised model of labour market flexibility, particularly in service occupations with low skill requirements. However, a closer look also reveals considerable differences between national patterns of standard and non-standard work. In Germany (and to a lesser extent Austria), marginal part-time provides a fertile ground for low-paid service jobs, as non-wage labour costs are minimised. In France, fixed-term contracts are a flexible and also cheaper alternative to permanent contracts, especially for younger workers. Dutch service sector employers follow an eclectic approach, as can be seen from high shares of self-employed and part-timers, as well as temporary workers. Finally, Belgium has large proportions of very low-skilled, own-account self-employed and involuntary fixed-term contracts. On the basis of these results, we identify four transformative pathways towards a more inclusive or flexible labour market: growing wage dispersion, defection from both permanent full-time employment as well as from dependent employment, and government-sponsored labour cost reductions.

Keywords: labour market dualisation; Continental Europe; fixed-term contracts; part-time work; wage dispersion (search for similar items in EconPapers)
JEL-codes: J21 J38 J41 J58 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010-06
New Economics Papers: this item is included in nep-eec, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published - published in: P.Emmenegger et al. (eds.): The Age of Dualization, Oxford: 2012, 73-99

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