The Inter-generational costs of flexicurity, labour market transitions of young workers in nordic and southern european countries

Abstract

The economic crisis has revived the interest on the increasingly vulnerable position of youth in the labour market. In this paper we analyze flexicurity policies in the Nordic and in Southern European countries in the period previous to the crisis and explore whether they contribute to explain this trend and differences across countries. First of all, it is argued how the disadvantaged position of this group in the labour market has long-running causes and is not just the consequence of deterioration in labour market conditions as a result of the crisis. Labour market policies under the flexicurity umbrella haven't been able to mitigate the increasing dualization of many EU labour markets. This also applies to young workers that are more exposed to the flexibility envisaged under this paradigm and in many countries less protected by the compensating security measures. However, the analysis shows how the crisis is widening the gap between countries in the degree and form of uncertainty facing young workers. Those in countries with labour market policies closer to the flexicurity paradigm perform better before and after the crisis compared to countries with institutional configurations far from the flexicurity ideal-type. It is finally argued how record youth unemployment jeopardises the sustainability of welfare state arrangements across European Social models and poses serious challenges to social cohesion.