Employment Revival in Europe: Labour Market Success in Austria, Denmark, Ireland and The Netherlands

Citation

de Bruin, A. (2001), "Employment Revival in Europe: Labour Market Success in Austria, Denmark, Ireland and The Netherlands", International Journal of Social Economics, Vol. 28 No. 8, pp. 681-686. https://doi.org/10.1108/ijse.2001.28.8.681.2

This book addresses the labour market success of four smaller European countries – Austria, Denmark, Ireland and The Netherlands, all members of the EU. The study is based mainly on reports prepared for the ILO country employment policy reviews (CEPRs), which were a follow‐up to Commitment Three of the Declaration and Programme of Action of the 1995 World Summit for Social Development at Copenhagen. Success is ascertained in terms of the objectives of Commitment Three, which sets the goal of full employment as a primary concern of economic and social policies. Additionally, full employment requires that employment and work must be “freely chosen” in that it excludes work with forced or compulsory elements and must have decent working conditions, and “productive”, hence excluding “make work” schemes, and must be non‐discriminatory employment. Both Commitment Three and the ILO 1964 Employment Policy Convention (No. 122), whose principles it recapitulates, comprise two of the five annexes to the book.

Providing a detailed assessment of the four labour markets, as well as the new challenges (see p. 98) for these countries, the study discusses three main factors contributing to their employment revival and success: macroeconomic policy excluding industrial and technology policy, social dialogue and industrial relations, and labour market policy, which includes both passive and active labour market policies. At the outset it is stressed, however, that success is both “relative and multidimensional” (pp. 3, 32). Thus, for instance, the success of these four smaller countries is marked when compared to bigger European countries such as Germany, France and Italy. Yet, success is still relative and not absolute, with none of the four countries attaining full employment if qualitative criteria are also introduced. Thus, for instance, even with Dutch unemployment levels close to the 3 percent benchmark for full employment, the full‐time equivalent employment rate is relatively low and the gender gaps in full‐time equivalent rates are marked, since women are largely part‐time workers.

Auer makes it clear there is no one path to success. Thus when attempting to answer the inevitable question on whether the employment revival and success is sustainable, he initially points out that while all four countries are at times postulated as distinct models (the most famous Dutch “Polder” model, the Irish “Celtic Tiger” model, the Austria “Danube” model and the Danish “Viking” model), none of the models, which have all developed within their own country conditions, should be copied in their entirety. Rather, to draw on lessons from the models requires an examination of sustainability of the relative successes. Obviously, this sustainability will be assisted by the continuation of the three factors which were judged in the first place as accounting in large measure for the success – social dialogue, a sound macroeconomic environment and the activation of labour market policy. Hence, tensions among the social actors or as the author put it, “a return to more adversarial practices” will threaten sustainability. The end of wage restraint, particularly in the wake of emerging labour market shortages and the possibility of conflict associated with new items on the bargaining table – mainly those related to the ageing of the workforce (such as early retirement provisions and pension reform) – are seen as potentially major risks in this area. The author emphasises the maintenance of social dialogue as a mainstay for the continuation of success, adding “the will to find compromises which will not alienate one of the parties” (p. 98) also as a vital component for this maintenance.

In the penultimate, general conclusions chapter, the debatable, yet currently extremely relevant question is taken up: “is full employment still possible today?” (pp. 98‐101). Here the need to re‐define full employment is convincingly argued. The examination of the four selected labour markets highlights that the conventional definition – full‐time labour force participation in the age group 15‐65 – is much less valid in today’s labour market. For instance, the significant rise of “atypical” forms of work, e.g. part‐time work, telework, fixed term contracts and temporary agency work, is a feature of the new world of work. Auer suggests that with the ILO principle of “freely chosen” as a qualitative criterion, “freely chosen part‐time work” should form part of the new definition of full employment. Serious and urgent consideration should now be given to devising, and more universally adopting, a definition of full employment that is more in keeping with the changed work patterns and supply preferences that characterises the labour market of the twenty‐first century. The ideas put forward in this book are an excellent starting point for this exercise.

The concluding chapter provides useful policy recommendations. The need for continuous social dialogue once again features prominently and its fragility is stressed. In the event that social dialogue is viewed skeptically as merely a popular catch‐cry of worker‐friendly organizations such as the ILO (from which this book emanates), a would‐be reader can be assured that the case for social dialogue and practical recommendations for its operation are convincingly put forward by the author. This study proves and further examples, like the recent success of Italian pension reform which would not have been possible without active union participation, show that issues of national welfare significance can be efficiently and effectively resolved through such dialogue.

Finally, returning to the annexes mentioned at the beginning of this review, these are both useful and interesting. The first has some comparisons between the USA and Europe. The second discusses the relative success ranking of the four countries. Annex III focuses on their education and training systems and in keeping with a general theme of the book, the role of social partners in this process is also commented on.

This book makes a valuable contribution to the empirical literature on employment policy, even if its only lasting contribution is in serving to show that established institutions and regulations can effectively adapt to change and facilitate remarkable economic and employment revival. To use the author’s own imagery, “the baby was not thrown out with the bathwater. The baby (institutions) was kept and the water (inefficiencies in the institutions) was at least partially thrown out. This accounts for a large part of European success” (p. 3).