Performances of labour markets during recession in different labour market regimes

Jandrić, Maja and Stevanović, Slavica (2012) Performances of labour markets during recession in different labour market regimes. In: New challenges in changing labour markets. Institute of Economic Sciences, Belgrade, pp. 191-213. ISBN 978-86-80315-93-5

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Abstract

Objective of this paper was to analyze differences in labour market performance in various labour market regimes during and after the latest recession. Different labour market regimes had specific paths of adjustments to recessional macroeconomic shocks, which can be related to underlying labour market institutions, as well as other institutional characteristics. Reaction of European labour markets on economic crisis 2008‐2009 varied across the Member States. Classification of countries was primarily based on principal component analysis performed in order to capture two main labour market features: flexibility and security. These features are a basis of the “flexicurity” concept and they are mainly determined by labour market institutions. Key determinants of flexibility and security balance in the labour market are: employment protection legislation, unemployment benefits system and active labour market policies. Within the labour market regimes results have been rather uneven, but we might say that Nordic and Continental regime tend to have had better labour market performances compared to Anglo‐Saxon and Mediterranean. However, one must be careful with definite conclusions, since a lot of other factors, beside labour market institutions, influenced labour market performances.

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