Saturday, February 02, 2008

Is flexicurity an alternative for the French labour market?

Probably not, says Gilles Saint-Paul in his assessment of the recent labour market agreements from France. I agree (and strongly recommend Saint-Paul's short but concise essay on VoxEU, one of my best readings this week).

While it is imperative to make the French labour market more flexible (remember however how a small step in this direction, the infamous CPE, was received in France 2 years ago), trying to handle this as part of a flexicurity package, with generous unemployment benefits complemented by active labour market policies meant to induce unemployed workers to search for and accept jobs fast, might have different effects in France. Next to Saint-Paul's reasons for why the security part in a flexicurity package would possibly misfire in France, here's one more. A major difference between Denmark and France relevant for this context is the fact that France is a melting pot of ethnicities (though, as expected, Sarkozy's proposal of 'officializing' that, by allowing the collection of ethnic statistics, never made it through the Conseil d'Etat) whereas Denmark is incredibly homogenous population-wise (not for nothing, they also fight hard to preserve the status quo; the Danes currently have the most stringent immigration laws within Europe and the nationalistic 'Danish People's Party' has been part of the government coalition since 2001); my take on this issue is that, in its current form, the Danish flexicurity would not be sustainable in the long run even in Denmark, should the composition of its population change significantly. See also a previous, related, discussion on whether Denmark can be scaled up, in general.

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