Full Employment in Europe

Full Employment in Europe

Managing Labour Market Transitions and Risks

Günther Schmid

Transitional Labour Markets (TLM) – defined as legitimate, negotiated and politically supported sets of various employment options in critical events over the life course – are an essential ingredient of modern full employment strategies. After assessing the European Employment Strategy, this book offers a detailed comparative analysis of employment performance for selected European member states and the United States. It suggests that successful employment systems arise from a new paradigm of flexibility and security (‘flexicurity’) the balance of which varies according to countries’ institutional paths. Whilst there is no ‘best practice’, TLM theory does provide normative and analytical principles that can be generalised for various institutional settings. The book also provides good practice examples for managing critical transitions over the life course – from education to employment, from one job to another, from unemployment to employment, from private activities to gainful work and from employment to retirement – and develops the contours for extending unemployment insurance to work–life insurance.

Chapter 5: Risky Transitions over the Life Course: Bridges or Traps?

Günther Schmid

Subjects: economics and finance, labour economics, social policy and sociology, labour policy


The essential feature of a bridge is that it is a fixed device that lets you transit a discontinuity without getting nervous. (Cohen and Stewart 2000, p. 405) This epigraph serves as a metaphor for the main argument of this chapter: People are willing to tolerate added flexibility if they can rely on bridges to overcome critical discontinuities during their life courses. I therefore start with the hypothesis that such discontinuities are multiplying, that the ‘standard employment relationship’, and hence the social safety net depending on it, is eroding. A close look at the empirical evidence reveals that ‘nonstandard’ jobs are indeed expanding but that visions of an entirely flexible labour market are untenable (section 5.1). Because the empirical evidence is inconclusive, I develop a theoretical model based on Simon’s (1951) seminal distinction between ‘employment contracts’ and ‘sales contracts’ in order to speculate in a more informed way about the future of work. I find reasons for an ongoing keen interest in stable employment contracts, meaning that visions of an entrepreneurial economy based on sales contracts are misleading. However, my prediction is that employment contracts will increasingly contain elements derived from sales contracts that push entrepreneurial risks more and more onto employees (section 5.2). The cultural and media sector represents in embryo many forms of these hybrid employment relationships. A closer look at the labour market for artists and journalists shows that individual strategies for coping with the new risks provide important clues about how to recalibrate the modern welfare...

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