Essays in Honour of Günther Schmid
Edited by Hugh Mosley and Jacqueline O’Reilly
Chapter 13: Transitional labour markets: an economist's view
13. Transitional labour markets: an economist’s view Jaap de Koning INTRODUCTION For decades now most EU countries have been suffering from high unemployment. Many of the unemployed are out of work for long periods, if not permanently. Moreover, unemployment in most countries is highly concentrated among speciﬁc groups, such as the low-skilled and those of foreign origin. Even in the countries that have implemented successful labour market policies unemployment remains a serious problem. It should be noted that we use the term ‘unemployment’ in a broad sense. It also covers older workers who have been given the opportunity to enrol in disability schemes and unemployed people (whether on beneﬁts or not) who have been discouraged from seeking work. On this deﬁnition unemployment (or ‘inactivity’) is still considerable even in countries such as the Netherlands which have a very low ofﬁcial unemployment rate. Schmid (1998) has developed his ideas on transitional labour markets as an answer to the obvious inability of EU countries to solve the unemployment problem. The basic concept is some kind of redistribution of employment between the active and the inactive. However, the main innovation in his vision is that he links the solution of this problem to other key issues in society. The ﬁrst issue is the fact that many of those in stable employment suffer from high work pressure. They do not have enough time to spend on other spheres of life. At some point this may affect their personal health (think...
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