New flexibilities in European labour markets
Because of government-mandated rigidities in European labour markets, it is more difficult for employers to lay off full-time workers in lean times which encourages them to hire the minimum number they can get by with during expansion periods. In Germany, part-time employment as a share of total employment rose from 13.4 percent in 1990 to an estimated 18 percent in 2001.
But because part-time and temporary workers are more easily laid off, companies hire then more readily in the first place and this makes for more flexibility.
Michael Saunders, an economist at Schroder Salomon Smith Barney in London, has charted the rise in the numbers of part-time workers and those on fixed-term contracts in Europe.
Similarly, part-timers in France grew from 12.2 percent to 14.6 percent of total employees.
Part-timers in Italy shot up from 8.8 percent of workers to 12.6 percent in 2001.
In part due to the increased flexibility of part time work, European labour-force participation rates - the ratio of the total labour force to the working age population - rose by more than two percentage points, to nearly 69 percent, in the five years to 2001.
Source: David Fairlamb, Economic Scene: Wiggle Room for Euro Bosses, Business Week, January 21, 2002.
For more on Labour Market Regulations and Growth
FMF Policy Bulletin\30 January 2002
Publish date: 06 February 2002
The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.