Unemployment is the scourge, not youth unemployment per se. The misguided policy preoccupation with youth. CEPS Policy Brief No. 294, 26 June 2013

This Policy Brief argues that too much effort and political capital is being spent by the Commission and member states on being seen to be doing something quickly about youth unemployment when, in fact, the structural measures proposed will only have long-term effects. Expectations of immediate relief are running well above what can be delivered, especially at the EU level. Given the macroeconomic situation, no policy option will deliver a significant dent in either youth unemployment or unemployment in general. The EU policies on the table that are supposed to have an immediate effect, such as increased lending from the European Investment Bank to SMEs for the hiring of young people, will only have a very marginal impact on youth unemployment. Moreover, this impact will come mostly to the detriment of older unemployed persons excluded from such a scheme. Given the perceived need to ‘be seen to be doing something’, we fear that policies subsidising young workers de facto at the expense of older workers or, even worse, policies that subsidise older workers for not taking young people’s jobs, will proliferate. In fact, it is not at all clear that young people suffer more from being unemployed than older people, or even disproportionately more than older unemployed individuals. In particular, it is not clear that the much-publicised notion of a ‘lost generation’ with permanent ‘scars’ is relevant only to the young generation. The paper ends by highlighting the much-neglected policy option of encouraging labour mobility within the internal market. Although the Commission is ‘upgrading and modernising’ its tools, much more could be done in this area – to the benefit of the individuals concerned, the member states, and European integration in general.

The Danish Flexicurity Model - a Lesson for the US? ACES Working Paper No. 2, May 2007

Within recent years, increasing international competition has caused an increase in job transitions worldwide. Many countries find it difficult to manage these transitions in a way that ensures a match between labour and demand. One of the countries that seem to manage the transitions in a successful way is Denmark, where unemployment has been dropping dramatically over the last decade without a drop in job quality. This success is ascribed the so-called Danish flexicurity model, where an easy access to hiring and firing employees (flexibility) is combined with extensive active and passive labour market policies (security). The Danish results have gained interest not only among other European countries, where unemployment rates remain high, but also in the US, where job loss is often related to lower job quality. It has, however, been subject to much debate both in Europe and in the US, whether or not countries with distinctively different political-economic settings can learn from one another. Some have argued that cultural differences impose barriers to successful policy transfer, whereas others see it as a perfectly rational calculus to introduce 'best practices' from elsewhere. This paper presents a third strategy. Recent literature on policy transfer suggests that successful cross national policy transfer is possible, even across the Atlantic, but that one must be cautious in choosing the form, content and level of the learning process. By analysing and comparing the labour market policies and their settings in Denmark and the US in detail, this paper addresses the question, what and how the US can learn from the Danish model. Where the US and Denmark share a high degree of flexibility, they differ significantly on the level of security. This also means that the Danish budget for active and passive labour market policies is significantly higher than the American, and it seems unlikely that political support for the introduction of Danish levels of security in the US can be established. However, the paper concludes that there is a learning potential between the US and Demnark in the different local level efficiency of the money already spent. A major reason for the Danish success has been the introduction of tailor made initiatives to the single displaced worker and a stronger coordination between local level actors. Both of which are issues, where a lack of efficiency in the implementation of American active labour market policies has been reported.

Do Changes in Regulation Affect Employment Duration in Temporary Work Agencies? CES Germany & Europe Working Papers, No. 07.1, 2007

Over the past three decades Germany has repeatedly deregulated the law on temporary agency work by stepwise increasing the maximum period for hiring-out employees and allowing temporary work agencies to conclude fixed-term contracts. These reforms should have had an effect on employment duration within temporary work agencies. Based on an informative administrative data set we use a mixed proportional hazard rate model to examine whether employment duration has changed in response to these reforms. We find that the repeated prolongation of the maximum period for hiring-out employees significantly increased average employment duration while the authorization of fixed-term contracts reduced employment tenure.