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

Author

Listed:
  • Eichhorst, Werner

    (IZA)

  • Marx, Paul

    (University of Bonn)

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.

Suggested Citation

  • Eichhorst, Werner & Marx, Paul, 2010. "Whatever Works: Dualisation and the Service Economy in Bismarckian Welfare States," IZA Discussion Papers 5035, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5035
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    References listed on IDEAS

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    12. Eichhorst, Werner & Hemerijck, Anton, 2008. "Welfare and Employment: A European Dilemma?," IZA Discussion Papers 3870, Institute of Labor Economics (IZA).
    13. Danielle Venn, 2009. "Legislation, Collective Bargaining and Enforcement: Updating the OECD Employment Protection Indicators," OECD Social, Employment and Migration Working Papers 89, OECD Publishing.
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    Citations

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    Cited by:

    1. Konle-Seidl, Regina, 2010. "Make further vocational training pay : possibilities and limits of promoting transitions by Public Employment Services (PES)," IAB-Discussion Paper 201018, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Jeroen Horemans, 2016. "Polarisation of Non-standard Employment in Europe: Exploring a Missing Piece of the Inequality Puzzle," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 125(1), pages 171-189, January.
    3. Durazzi, Niccolo, 2017. "Inclusive unions in a dualized labour market? The challenge of organising labour market policy and social protection for labour market outsiders," LSE Research Online Documents on Economics 69527, London School of Economics and Political Science, LSE Library.
    4. Werner Eichhorst, 2015. "The Unexpected Appearance of a New German Model," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 49-69, March.
    5. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," LEQS – LSE 'Europe in Question' Discussion Paper Series 42, European Institute, LSE.
    6. Hassel, Anke, 2011. "The paradox of liberalization – understanding dualism and the recovery of the German political economy," LSE Research Online Documents on Economics 53212, London School of Economics and Political Science, LSE Library.
    7. Schwander, Hanna, 2015. "Labor market risks in times of welfare state transformation," TranState Working Papers 192, University of Bremen, Collaborative Research Center 597: Transformations of the State.
    8. Jeroen Horemans, 2017. "Atypical Employment and In-Work Poverty: A Different Story for Part-Timers and Temporary Workers?," Working Papers 1701, Herman Deleeck Centre for Social Policy, University of Antwerp.
    9. Stef Bouwhuis & Dimitris Pavlopoulos & Mauricio Garnier‐Villarreal & Wendy Smits, 2024. "Ad hoc decisions as latent strategies: How do firms use nonstandard employment contracts?," Industrial Relations Journal, Wiley Blackwell, vol. 55(2), pages 81-99, March.
    10. Anke Hassel, 2011. "The paradox of liberalization – Understanding dualism and the recovery of the German political economy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 2, London School of Economics / European Institute.
    11. Busemeyer, Marius R., 2011. "Varieties of cross-class coalitions in the politics of dualization: Insights from the case of vocational training in Germany," MPIfG Discussion Paper 11/13, Max Planck Institute for the Study of Societies.
    12. Eichhorst, Werner & Weishaupt, J. Timo, 2013. "Mit Neo-Korporatismus durch die Krise? Die Rolle des Sozialen Dialogs in Deutschland, Österreich und der Schweiz," IZA Discussion Papers 7498, Institute of Labor Economics (IZA).
    13. Niccolo Durazzi, 2015. "Inclusive unions in a dualised labour market? The challenge of organising labour market policy and social protection for labour market outsiders," LEQS – LSE 'Europe in Question' Discussion Paper Series 99, European Institute, LSE.
    14. Marius R. Busemeyer, 2012. "Business as a Pivotal Actor in the Politics of Training Reform: Insights from the Case of Germany," British Journal of Industrial Relations, London School of Economics, vol. 50(4), pages 690-713, December.
    15. Eichhorst, Werner & Konle-Seidl, Regina & Koslowski, Alison & Marx, Paul, 2010. "Quantity over Quality? A European Comparison of the Changing Nature of Transitions between Non-Employment and Employment," IZA Discussion Papers 5285, Institute of Labor Economics (IZA).
    16. Jan Behringer & Till van Treeck, 2018. "Revisiting debt-led and export-led growth models: a sectoral balances approach," IMK Working Paper 195-2018, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    17. Anke Hassel, 2014. "The Paradox of Liberalization — Understanding Dualism and the Recovery of the German Political Economy," British Journal of Industrial Relations, London School of Economics, vol. 52(1), pages 57-81, March.

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    More about this item

    Keywords

    labour market dualisation; Continental Europe; fixed-term contracts; part-time work; wage dispersion;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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