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Dynamics of National Employment Models

Final Report Summary - DYNAMO (Dynamics of National Employment Models)

The institutional arrangements of capitalist societies differ. The expectation of difference applies especially to employment systems, in which it is human labour that is exchanged. Employment contracts are necessarily incomplete contracts, since the actual output required is constantly subject to new decisions after the contract has been concluded. To limit uncertainty, institutions, both formal and informal, influence not only the contractual conditions but also the rights of employees or their representatives to codetermination with regard to working conditions and the organisation of the work process. These inherently political and historical compromises inevitably give rise to varieties of employment arrangements and conditions.

However, the sources of differences in the employment relationship extend beyond the industrial relations and production systems to include the societal institutions that produce and reproduce labour itself, the family and the education, training and social security systems. This multiplicity of institutions influencing the supply, utilisation and demand for labour in a given country constitute what we call national employment models.

It is well established that there are a wide variety of national socioeconomic models within Europe that have significant consequences for the employment system. These models are under pressure from a range of different forces and have to develop new solutions to cope with these challenges. There was a need, therefore, to study national socioeconomic models as dynamic models.

The DYNAMO project focused on the employment implications of the dynamic development of socioeconomic models. A major issue was whether the pursuit of a distinctive European path depends upon the maintenance of distinctive national models within the wider European Union (EU) or whether these models could converge without loss of ability to combine the achievement of economic and social objectives.
The stages of analysis included:
1. the analysis of national models in 10 EU countries and the main directions of change within the national models;
2. specific studies of how the different national models are responding to changes at the level of particular sectors;
3. conclusions with respect to the effectiveness of the European employment and Lisbon strategies.

The participants in the DYNAMO project analysed the dynamics of their respective national employment models from three different angles.
The first, and basic, undertaking had been the analysis of institutional change in the employment models over the past decades. The reference periods for comparison differed across countries as the main target was to capture the most relevant period of institutional change in each country.

As a second element, the perspective of analysis shifted from the traditional focus on institutions towards the individual lifecycle, i.e. to the question of the employment-related institutional support given to individuals over the life course, from the phase of education and preparation for the labour market until the end of their careers and the transition into the old-age pension system.

As a third element, a range of three sectors per country were analysed with respect to their interaction with the national employment model. That is, we were interested in the effects of overall changes at the sector level and, conversely, in potential impacts on the national employment model emanating from individual sectors.

The sectors were chosen in order to provide meaningful examples of the influence of particularly interesting challenges to national employment models: elderly care, as an example of how national models react to the challenge of ageing societies, the IT sector, as an example of how national models take on the challenge of new technologies and international business models, the construction industry, as an example of labour migration and EU regulations impacting on national labour markets, urban public transport, as an example of EU free-market policy impacting on an industry traditionally sheltered and run by local public authorities, the hotel and restaurant business, as one of the usual suspects for high shares of low-wage labour, and the motor industry as the arguably most prominent example of the international re-division of labour and re-organisation of value chains and their repercussions on industrial relations.

As far as the results of the project are concerned, the main conclusion was that, given both external and internal pressures and their interaction within a neoliberal mainstream, there is a growing need for multi-level institution building aimed at a revitalisation of national employment models in Europe.