but also from other disciplines such as political science (Mosley 2002), economics ...... Regulating Working-time transitions in Europe, Cheltenham Edward Elgar ...
TRANSITIONAL LABOUR MARKETS: Past, Present and Future Applications1 Drs. Irma Reçi Vrije Universiteit, The Netherlands Prof. Dr. Jeanne de Bruijn Vrije Universiteit, The Netherlands
Over the past years many researchers have used the theory of transitional labour markets (TLM theory), grounded by Günther Schmid (1998), as a framework from where they could organise and analyse transitions in and around the labour market. However, the literature misses a review that organises and summarises the cumulative empirical evidence of these studies. This article provides such a review by integrating 38 conducted empirical studies drawn from the perspective of transitional labour markets; discusses the context in which the theory has been used; examines the contribution of the theory through the macro and micro findings and offers directions for future research.
1. INTRODUCTION Rising levels of unemployment characterised the labour markets of many European countries in the beginning of the 80’s. High spells of unemployment involved many problems for all levels of the labour market. In order to get a grip over the pessimistic situation, many European countries realised that – among others – a return to more labour-intensive growth was needed in order to diminish the financial pressures present at the collective services (Heuvel et al., 2000; Nickell & van Ours, 2000; Visser, 2003). In the 90’s the processes of globalisation and individualisation involved new changes on the supply and demand structures of the labour market (Schmid, 2001; Luijkx et al. 2004; Mills & Blossfeld, 2004). However, unemployment remained a major problem for many countries, which involved economical and social problems.
This work is part of the thesis “Institutional Arrangements and Occupational Mobility in comparative perspective” within the Faculty of Social Sciences at Vrije Universiteit in The Netherlands. The authors thank dr. Nick van de Heuvel, dr. Melinda Mills and Erik Mooi for their comments on earlier versions of this article. 1
Driven from the negative effects of unemployment and focussed on the changing forces of the labour market, Günther Schmid introduced in the beginning of the 90’s the concept of transitional labour markets as a labour market policy reform proposal to reintegrate excluded groups - such as women, unemployed, low-educated and minorities - into the labour market (Gautié et. al. 2003). The concept was based on the assumption that by the right support of the institutions, individuals should be facilitated to make smooth transitions from one life domain to the other. The smooth transitions between life domains would improve the functioning of the labour markets and would also offer individuals the possibility to find an optimal combination between their working careers, care duties, education and free time. In the following years Schmid improved and expanded the concept of transitional labour markets by reconsidering the assumptions of the concept, the changing notion of ‘fullemployment’ and the conditions that ‘good transitional labour markets’ had to fulfil. In 1998 his in the beginning introduced proposal had taken the shape of a theory. After its introduction, the theory of transitional labour markets (TLM theory) received a wide attention from different scientific disciplines. The shown interest resulted in many studies, not only from the academic discipline of sociology (Schmid 1993, O’Reilly 1996, Wilthagen, 2001) but also from other disciplines such as political science (Mosley 2002), economics (Muffels 2001; Gazier 2002; Auer 2002; De Koning 2001), organisation theory (Rubbery 2002) and law (Rogowsky 2002). The reason for the received attention lies on the combination of two concepts, namely the concept of the life-course and the concept of transitional labour markets. This combination offers a new paradigm, which pays attention on the institutional (macro) and individual (micro) aspects of the labour markets. With respect to the institutional aspects the theory pleads through her normative component for the development of measures and arrangements that on one side weaken the barriers between different critical transitions in the human’s life and on the other side prevent critical events from becoming downward spirals. These arrangements that function as institutional responses on critical times are called transitional labour markets. The attention of the theory on the individual aspects is manifested on the usage of the life-course concept. The theory identifies the following critical transitions: (1) the transition from school to work, (2) the transitions from part time to full time work or vice versa, (3) the transition between family work and labour market work, (4) the transitions between employment and unemployment, (5) the transition to retirement. By looking at the critical transitions the theory makes it possible to organise and analyse the flows between life domains that occur in both directions and emphasis the dynamics of the labour market. 2
In many studies the TLM theory is used as a conceptual model to simplify the chaotic reality of labour dynamics and their interaction between life domains. However, the literature misses a review that organises and summarises the cumulative empirical evidence of these conducted studies. As a result it is not clear which topics remain unresolved and how the TLM theory can be extended and refined in the future. In this paper we purpose to provide such an overview that on one hand identifies and examines the context in which the theory is used by the conducted studies and on the other hand analyses the contribution of the theory through the findings of the studies. We begin this paper with a brief overview of the origins, assumptions, definitions and components of the TLM theory in the next section. We then provide in section III a review that centers around three specific questions: (1) In what contexts has the TLM theory been applied through the conducted studies and what research methods have researchers used to measure issues present on the macro and micro level of the labour markets? (2) What kind of contribution has the theory offered to investigate macro and micro issues of the labour market? (3) Which theoretical issues deserve more attention in the future? Section IV summarises the findings and ends up with a brief conclusion. 2. THE THEORY OF TRANSITIONAL LABOUR MARKETS This section intends to provide a brief introduction of the key constructs of the TLM theory. In order to elaborate this introduction we will briefly outline the origins of the theory, its assumptions, definitions, components and some comments regarding the assumptions of the theory.
2.1 The Origins The idea of transitional labour markets has its roots in the implementation of the active labour market policies2 by the Nordic EU-countries (Wilthagen 2001). Until the late 80’s the EUNordic countries where identified as ‘an island of low unemployment in a sea of high European joblessness’ (Elmeskov, 1994:29). The low share of unemployment was attributed to several measures and arrangements taken by the EU-Nordic governments regarding investments in active labour market policies to stimulate the social integration of vulnerable groups – such as ill, women, low-educated and minorities – in the labour market (Furaker et al., 1990). Furthermore, they involved an expansion of the welfare state, which provided a rise
in the public employment of the EU-Nordic countries and compensated the job losses in the private sector until the early 90’s (Jochem, 1997). Inspired by the advantages of the active labour market policies in the Nordic EU-countries, particularly in Sweden, Günther Schmid (1993) introduced the concept of transitional labour markets as a labour market policy reform proposal to reintegrate excluded groups - such as unemployed, ill, women, ethnic minorities in the labour market (Gautié et. al. 2003). After a further study Schmid (1995) recognised that under current conditions ‘full employment’ was not longer achievable. He assumed that creation of a new working time regime of average 30 hours a week (on a life time basis) would make redistribution of the work volume possible under more individuals and could lead into full employment. As a result of this redistribution the quality of life would increase because of the created care, schooling and leisure time. This argument was in line with an earlier life course proposal of De Bruijn, called A National Care Plan (De Bruijn, 1993), who also pleaded for the establishment of a working time regime of average 28 hours a week over the life course in order to achieve a redistribution of working time over men and women in order to create more work and care combination-scenarios3. After completing his proposal by further assumptions Schmid introduced the concept of transitional labour markets as a fundamental new employment strategy in Europe (Schmid, 1995) meant to function as an innovative and qualitative growth strategy co-ordinated at European level (Muffels 2001). In 1998 his former proposal had taken the shape of a theory (Schmid, 1998), which offered a new way of looking at the labour market by linking the need and support of (new) preventive institutional arrangements to the critical transitions of individuals during their life course. Drawing from the framework of the theory many researchers tried to find empirical support according to the different critical transitions and assumptions of the theory (O’Reilly 2002; Muffels 2001; Wilthagen 2001; Schömann 2002). Before we elaborate the empirical support by other researchers, we will first take a brief look into the assumptions and key constructs of the theory.
2.2 Assumptions of the theory of transitional labour markets The processes of globalisation and individualisation involved many changes over the last decade. Increase of capital flows across international boundaries, free trade and more 2
Active labour market policies are policy instruments by which states seek to assist individual transitions into the labour market (O’Connell and McGinnity, 2002)
freedom for employers and employees in determining working conditions were some economical trends that globalisation involved in the 90’s. These developments were followed by the trend of individualisation, which entailed a lot of changes in family and demographic structures such as decline of birth rates, increase of divorce rates, increased numbers of single parents and increased number of female participation in the labour market (Schmid, 1998). One other demographic consequence of these changes constitutes also ageing, which can be seen as the product of relatively high birth rates from 1945 to 1965 followed by low birth rates since 1965. The numbers of elderly increase rapidly at the same time as the absolute size of the labour force falls (McDonald 1996). This shift in the age structure confronts many (post) industrialized countries with a new problem, as additional resources are required to finance the pension systems. The TLM theory is based on the observation of these dynamic changes and takes into account the emergence of new labour market risks such as less stable two-earners working careers, ageing of the workforce and rise of inequalities (Gautié and Gazier, 2003). The theory argues that only by understanding the dynamics of modern labour markets and the causes of structural unemployment, new and effective institutional arrangements could be designed to protect individuals from the loss of incomes and social exclusion (Schmid, 2002c). The theory is based on the assumption that under the present circumstances full employment and employment for all is not longer sustainable. By establishing a new working time regime of average 30 hours a week (on a life-time basis) redistribution of the actual work volume among more individuals would become possible, which subsequently would lead to full employment. This assumption is in contradictory to the call of many governments lately to increase the working time volume in order to be able to push down the economical costs and maintain the support basis of the welfare states. Furthermore, questions arise about the application of this assumption under the present circumstances such as: would this kind of redistribution be applicable at all segments of the labour markets? What kind of short and long-term effects would arise from this redistribution and what would be the net trade-off between these effects? In line with the life course perspective, the TLM framework distinguishes five critical transitions between different life domains in where individuals are supposed to be most vulnerable. According to the life course perspective transitions refer to changes in status that are bounded in duration although their consequences may be long-term (Elder, 1985). 3
Examples of combination-scenarios are arrangements that allow combinations between work and care; work and education or a mixture of these possibilities as well for women as for men 5
In the tradition of stratification studies these critical transitions are called ‘trigger events’ that “have the potential to trigger a change in a household’s future income trajectory” (DiPrete & McManus, 2000) and “catalyze subsequent deteriorations in the economic status of the affected workers and their families” (Gangl, 2004:1321). According to the TLM theory the effects of these ‘trigger events’ can be eliminated by the institutionalisation of employment policy arrangements. This assumption argues that by support of the institutions individuals should be facilitated to make smooth transitions from one life domain to the other. The smooth transitions between life domains would improve the functioning of the labour markets and would offer individuals the possibility to find an optimal combination between their working career, care duties, education and free time during their life courses. The TLM theory implies on the social security level the development of multiple riskmanagement institutions which would help to protect individuals not only against loss of earnings, but also against fluctuations in earnings as result of changes in their employment relations. In addition to the key assumptions of the TLM theory, the framework includes maintaining and extending employability as an assumption as well. Strengthening the personal capacities of individuals through lifelong learning could be important to encourage optimism and confidence among individuals and can influence the quality of their working career in a positive way (Schmid, 2002b). Based on the assumptions of the theory a pro-active role of the government and more active labour market policies are needed. Although the theory is well accepted by quite some researchers there exist different definitions and interpretations of the TLM theory. The next sub-paragraph shows some of the used definitions and will also come with our own definition about transitional labour markets.
2.3 Definitions of the theory of transitional labour markets The TLM theory is well accepted by quite some researchers in many countries and is seen as a ‘sensitising concept’ for future developments and designs of labour market (Muffels, et al. 2002). However, the interpretation of the theory varies across countries, depending on the particular nature of the labour market problems countries face (Muffels, et al. 2002). In our literature study we noticed different interpretations of the notion of transitional labour markets by different researchers. One difference was centered around the question whether the notion of transitional labour market is a perspective, approach, paradigm or a theory. Remarkable, was the fact that researchers underlined either the macro or the micro dimension of the theory
in their definitions. For example some studies emphasised the macro dimension and defined it as: “a concept that introduces new arrangements which simplify transitions between life phases” (Muffels, R. 2000: 3) or as “an approach focussed on policies that seek to weaken the barriers and differences between core and secondary employment…” (O’Reilly et. al., 2002: 411). Other studies emphasised the micro dimension of the theory and defined it as: “an approach focused on the systematic management process of transitions in and around the labour market” (Gautié & Gazier, 2003:7) or as : “the theory… that makes clear that in a good functioning labour market transitions from, into and out of the labour market should be passed as simple as possible’ (Wielers, P. et. al.: 68; own translation). In this paper we see the TLM theory as an adequate framework for the representation of today’s EU-labour markets. According to Hawking (1998; 2002) "a theory is a good theory if it satisfies two requirements: it must accurately describe a large class of observations on the basis of a model that contains only a few arbitrary elements, and it must make definite predictions about the results of future observations." In our opinion the TLM theory is “a paradigm that on one hand describes the dynamics of labour market phenomena and on the other hand offers valid conditions about future observations”. The theory tries to offer policy solutions in order to facilitate labour market adjustments and to make institutional arrangements effective and less unequal. However, during our literature review we noticed that some areas of the theory could be further extended in order to enlarge the explanatory and predictive power of the theory to reveal the macro-micro interplay and to offer future observations. Before we go deeper to the possible refinements of the theory we will first discuss the two components of the theory.
2.4 The two components of the theory of transitional labour markets The TLM theory has a two-folded objective. First, it tries to signal tendencies and to describe different labour market phenomena by understanding the dynamics between the humans’ transitions. Secondly, it tries to achieve social integration by pleading for the innovation of present policies and design of new arrangements that weaken barriers between different life domains. Since these two aims touch the individual as well as the institutional level of the labour market, the theory has developed two components that are concerned with aspects within the area of policy developments – the normative component – and the area of life course transitions – the analytical component. We will shortly go deeper into these two components in the next sub-paragraphs.
2.4.1 The analytical component According to the theory human’s life cycle has become less stationary and more a random walk through various employment or non-employment statuses (Schmid, 2002a). The flexible and discontinuous working careers and the involved insecurities and risks (such as unemployment) make it for individuals more difficult to move from one domain to the other. For a part drawing from the life course perspective that distinguishes different domains related to age and duration (Elder, 1985), the analytical component of the theory distinguishes five critical transitions where individuals are supposed to be the most vulnerable. These critical transitions are: (1) the transition from school to work and vice versa, (2) the transitions from different kinds of employment statuses or contracts and vice versa, (3) the transition between family work and labour market work and vice versa, (4) the transitions between employment and unemployment and vice versa, (5) the transition to retirement. Figure 2.1: The framework of the theory of transitional labour markets Private Household III
IV Unemployment Source: Schmid, G., et. al. (2002b)
Whereas these transitions are also used in other studies to describe the life course of individuals, in the perspective of Schmid these transitions are linked to the labour market and point at timings in where individuals could be the most vulnerable to become victims of negative events such as becoming ill, unemployed or social excluded. Furthermore, the analytical component of the theory focuses on the flows within the labour market and tries to understand the new dynamics of the labour market. By looking and understanding the labour dynamics around these five critical life course transitions, the TLM theory pleads for the development of measures and arrangements
that support and help individuals during difficult times by providing a supportive institutional environment (Schmid, 1998). 2.4.2 The normative component The normative component of the theory refers to the policies and arrangements needed to prevent or to reduce the high flows into long term unemployment (Schmid, 2002a). According to Schmid “institutional arrangements that allow such intermediate phases are called transitional labour markets” (Schmid, 1998: 5). In line with the life course perspective (Elder, 1985), transitional labour markets (or TLM arrangements) would be regarded as institutional responses to critical events in labour markets (Schmid, 1998) whereas in line with stratification perspective these TLM arrangements would be regarded as tools to prevent trigger events from involving deteriorations in the economic status of the affected workers and their families (Gangl, 2004). In operative terms, TLM arrangements are characterised by four principles. From the (1) organisational point of view they are a combination of gainful employment and other useful social activities that are not valued on the market such as volunteer work, care work and education. Thus, e.g. the redistribution of the work volume stimulates individuals to combine work with other societal activities. (2) From the income point of view TLM arrangements are a combination of wages, transfer payments and other income sources. (3) From the social policy point of view TLM arrangements are legally, collectively or privately contracted entitlements that opt for transitional employment. (4) Finally, from the fiscal point of view TLM arrangements finance employment or other useful activities instead of unemployment. According to Schmid, TLM arrangements need to fulfil some conditions in order to be able to support individuals through their critical transitions. Empowerment is the first condition that TLM arrangements have to fulfil. Empowerment would increase the capacity of individuals to handle new risks in their work and social life. Strengthening personal resources through life long learning could be a tool as well. Creating sustainable employment and incomes is the second condition of TLM arrangements. This means that TLM arrangements have to support transitions in the direction of regular labour market by providing the right incentives (such as bonuses, encouragement’s) in order to activate the unemployed and underemployed individuals. Flexible co-ordination is the third condition. TLM arrangements could establish a new balance between centralised rules and self-organisation by delegating more decision power to the individuals or to local institutions in order to adjust into the needs 9
of individuals and local circumstances. The last condition is co-operation where TLM arrangements could support and stimulate existing local networks and public private agencies. Linking resources to each other can make a potential synergy possible. As we could see, the normative and analytical components are the key constructs of the TLM theory. They point at the need of (new) arrangements that stimulate and facilitate individuals to make frequent transitions between gainful employment and other social activities. According to Schmid, TLM arrangements are not completely new. There already exist a wide range of policies that support integration of transitions and help to reduce unemployment and social exclusion. However, the character and effects of these policies vary between countries, and can be reconsidered with the goal of reducing unemployment (O’Reilly & Bothfeld, 2002).
2.5 Comments on the theory of transitional labour markets Currently, there are three main criticisms on the TLM theory. The first criticism lies on the application of the assumption about the redistribution of work volume and doubts whether redistribution of the work volume creates the right stimuli for individuals from the economic point of view. Some researchers argue that the application of this assumption could possibly lead to a decrease of the labour supply, because individuals would prefer a combination of work and social benefits instead of a full-time job (Muffels, 2001). Furthermore, redistributing the work volume among low-educated individuals could be less effective and almost impossible. The improvement of the chances of low educated could be achieved only by enlargement of their competencies through training’s and courses and not by redistribution of the working volume (De Koning & Gelderblom, 2001). The creation of second-class labour market is the second criticism. Shortening of the working time could be seen as luxury that individuals located at higher regions of the labour market can afford. Employees at lower regions cannot permit such reduction in the working time instead they have to work harder in order to keep their jobs. The last criticisms stresses the market process and argues that TLM arrangements might be too costly and possibly lead to loss of productivity. Therefore it would be of importance to make sure whether the realised safeties on the social benefits and extra tax incomes could compensate the extra costs that arise as a result of the development of new arrangements that the theory notices (Muffels, 2001).
In sum, although the TLM theory has been an inspiration for research as well as politics, it still needs to be improved and to take the criticisms under consideration. In this paragraph we paid attention on the assumptions, definitions and other key constructs of the TLM theory. The following paragraph will reveal the present applications of the theory through the conducted labour market research. 3. TRANSITIONAL LABOUR MARKETS: THE REVIEW The purpose of our review is to identify and examine the context and contribution of the theory through the conducted studies and to offer directions for further research by identifying research areas that have remained over– or underrepresented within the conducted studies. This section will be focussed on three specific aspects: (1) the context in which the TLM theory has been applied within the conducted research and their used research methods to study issues on the macro and micro level of the labour markets (2) the contribution of the theory to investigate different issues of the labour market and (3) future orientations.
3.1 Literature search and criteria for inclusion Our review integrated over 38 empirical studies, published from 1998 to 2003 in a variety of academic journals, discussion papers and academic editions. In order to identify suitable articles for this review we used electronic databases in social sciences (such as, Web of Science, Picarta, Science Direct etc.), academic journals, discussion papers (such as, Cambridge Journal of Economics; American Journal of Sociology; American Sociological Review; Journal of Human Resources; European Sociological Review; Work, Employment and Society; OSA working papers, Discussion papers written by the Wissenschaftszentrum für Sozialforschung) and bibliographies from empirical articles. Articles were included in this review if they met the following criteria. First, they had to be data based articles that drawn from the framework of the TLM theory examined different aspects in the labour market present on the macro and micro level as well. In addition, articles had to include macro and/or micro variables. Macro variables are those related to the institutional set up and labour market regulation in a country whereas micro variables are those related to one’s individual background. Second, data based articles were included if they were executed between the period 1998 – 2003. In order to limit the voluminous amount of TLM literature, we decided to exclude from our review theoretical
articles that provided only a description of the TLM framework and did not add new evidence or data. Based on these criteria our review captures studies, which focus on the examination of issues present at macro and micro level of the labour market. Generally, we believe that our selection of the articles has provided a representative sample of empirical work conducted to find empirical support for the assumptions of the theory of transitional labour market. A summary of the sample, variables and key findings of these studies are presented in Appendix 1.
3.2 The context in which the theory has been used Many researchers have used the TLM theory as an important framework in which they could identify and investigate several aspects that influence the direction of transitions during the life course. In our literature research we identified studies within two main contextual domains: (1) policy-oriented domain and (2) mobility-oriented domain. In this sub-paragraph we will discuss the context in which the theory is used in the mentioned domains and the issues that have been researched. 3.2.1 Policy-oriented studies Drawing from the normative component of the theory, the policy-oriented studies have tried to examine policy-related issues focussing on employment systems, institutional frameworks, flexible regulation and working-time regimes. Within these studies we have distinguished comparative studies (which compare policy-related issues between countries), validity studies (which examine the validity of the assumptions of the theory) and case studies (which describe the institutional framework of a certain country). 184.108.40.206 Comparative studies These studies have compared policy-related issues - such as flexibility of the labour market and working-time regulation - between two or more countries or between two or more sectors. The contribution of these studies has been in that they have examined the impact of working time arrangements across different countries on the life course of individuals. For example, in many countries part-time work is used as a tool to reintegrate the excluded groups into the labour market, except for the young and more highly qualified people who have more possibilities in finding a full-time job. The study of Anxo & O’Reilly (2002) shows that parttime work has different functions among gender. For example men in different European 12
countries (except British men) spend very short periods of time in part-time work until they move to something better, whereas women use part-time work as a tool to combine work and private life. This was one example to explain the relationship between the presence of working time arrangements and their impact on the life course transitions of individuals. There are also comparative studies (Auer, 2002; Detzel & Rubery, 2002) that focus on other issues such as the examination of the general trade-off between employment protection and social protection in different European countries or the examination of employment systems of youth labour markets in different European countries. 220.127.116.11 Validity studies Within the comparative studies we have also identified few studies, which examine the validity of the TLM theory. These studies have examined whether the theory could be applied to measure different labour market issues such as occupational mobility patterns and impact of institutional arrangements on individuals’ life courses. In the study of Muffels et al. (2002) there is investigated whether the theory could be used to measure the relationship between the size and nature of labour market transitions as well as the performance of the welfare regimes in terms of flexibility and security. Another study, which investigates also the validity of the concept of transitional labour market, is the study of Anxo & O ‘Reilly (2000). They researched whether the concept of transitional labour markets could be applied to describe the impact of working-time regimes in different countries on the mobility patterns of individuals. The study showed that not only specific regulations influence patterns in the working-time transition, but the societal and institutional arrangements in a given society influence as well. The impact of different policy developments on the labour market transitions is investigated more detailed in the case studies. 18.104.22.168 Case studies These studies have emphasised the policy developments within one country or sector and have traced the effects of these developments on the working-time transitions. The institutional framework related to the working-time arrangements is by far the most frequently investigated issue within the case studies. Anxo & Storrie (2003) underline in their study the institutional set-up under which working-time arrangements and transitions occur in Sweden. Similar studies related to different countries within the European Union were conducted also by Boulin et al. (2003), Cebrián et al. (2003), O’Reilly & Bothfeld (2003), Rubery et al.
(2000), Smith (2003), Wilthagen (2001) and Visser (2001). More detailed the findings of these studies will be shown in section 3.4. 3.2.2 Mobility-oriented studies Drawing from the analytical component of the TLM theory, the mobility-oriented studies have attempted to analyse several issues related to the transition-movements. The investigated issues within this category varied from the kind and nature of flows within the labour market (Albert, 2002; Audier, 2002; Gelderblom, et al., 2002) to the duration of transitions (Gelderblom & De Koning, 2001), frequency of certain movements (Audier, 2002; Wielers, et al., 2000; O’Reilly et al. 2002), and the dynamics between the life domains (Kruppe, 2002; Muffels, et al., 2000; Vandenbrande, 2000; Schömann, 1998). As the analytical component of the theory recognises five critical transitions during the lifetime, the studies have been concentrated around those five transitions. 22.214.171.124 School-to-work mobility oriented studies In many school-to-work mobility-oriented studies the analytical component of the TLM theory is used as a framework from where the interaction of flows between ‘education-andwork’ could be analysed, as well as the factors that might influence those flows. In this context the study of Albert et al. (2002) has attempted to analyse the impact of certain factors on the demand for (further) education by looking at the relationship between the labour market position of parents and the children’s demand for education. Among others the study showed that educational background of parents influenced the probability of demanding secondary and tertiary education. One other study, which also underlines the factors that influence the choice of young entrants, is that of Audier (2002). She investigated whether the transitions from school-to-work show the same pattern in different countries. Among others, the study showed that even though educational level of young entrants differs among the investigated countries, they experience particular modes of labour market entry, which is influenced the most, by their individual level of education. These kinds of school-to-work mobility-oriented studies are mainly focussed on the young entrants into the labour market and analyse the issues concerning this target-group by discussing also the differences between the educational systems among countries. During our literature review we experienced some difficulties in the classification of studies that underline the effects of training of individuals during their mid-life career, situated at the domain of employment, unemployment or care. Drawing from the subject of 14
these studies we call them training-oriented studies. Since these studies involve the effects of further education/training to specific groups of individuals we decided to classify these studies under the school-to-work transition studies as well. In order to eliminate vagueness we will clarify the differences of these studies and their target groups. The training-oriented studies can be divided into training oriented studies offered by (a) the institutional level and (b) by firm level. The first type of training-oriented studies examines the effect of different active labour market programs on the vulnerable groups, which include women, older workers, and to some extent minorities situated at the phases of unemployment, care and inactivity. The active labour market programs are offered by the institutions and are meant to promote reemployment under the mentioned group. The second type of training-oriented studies are mostly focused on working men, women and older workers situated at the phase of employment and investigate the training policy in firms and their effects on the career developments of employees. The training-oriented studies used the TLM framework to investigate the factors that stimulate or hinder the two-way transitions between education and work during the life course of individuals. Different authors such as Jolivet (2002), Gelderblom & De Koning (2002), O’Connell (2002) and Giraud (2002) provided significant contributions in the literature of training-oriented studies. Jolivet (2002) investigated in her study the inequalities and possible training selectivity in French organisations with respect to the older workers. In another study Gelderblom and De Koning (2002a) used individual company data to investigate on one hand the relationship between the wages and the labour productivity and on the other hand the age composition and training intensity of workers in the Netherlands. Gelderblom et al. (2002b) offered another contribution on these training-oriented studies. In this study the contribution of training – offered by a firm – has been investigated on the reduction of the unemployment risk. Among others the authors found evidence that the risk of becoming unemployed was partly determined by the persons’ unemployment history over the previous two years. Studies on aspects of training selectivity (O’Connell, 2002) and (in) equality among individuals (Giraud, 2002) have also given an important contribution to the literature by investigating the relationship between enterprise-related training programs and the initial education of individuals in the organisation. In the study of O’Connell and McGinnity (2002) there is investigated whether the active labour market policies affect the transition patterns of individuals. The study showed among others that participation in market-oriented programmes leads to higher chances of employment 18 months after leaving the programme. Schömann and Becker (2002) conducted a comparable study, by focussing on the selective 15
training possibilities of men and women in East and West Germany. Among others they investigated the effects of training in Germany based on micro-level estimates like training participation, training effects and employment/unemployment transitions combined with training. 126.96.36.199 Care-to-work mobility oriented studies The studies in this category used the TLM theory to analyse the impact of certain working time arrangements, on the mobility and lifestyle of women and men. The selected studies in this category were mainly focussed on women and to a very little extent on men. Interesting in these studies is the comparison of working-time arrangements between two or more countries. In the study of Cebrian et al. (2000), European countries have been compared to each other regarding the employment dynamics and the working-time transitions. The studies of Anxo et al. (2000) and Bothfeld & O’Reilly (2000) involved also international comparisons. Bothfeld & O’Reilly underlined the differences in labour dynamics and mobility patterns of individuals in Germany and Britain as result of different workingtime arrangements. The researchers found significant differences in the degree of women’s labour mobility and labour participation between the two countries. Also the study of Anxo et al. (2000) found different degrees in mobility and labour market participation among countries even though the countries had implemented similar working time arrangements. The study of Lathouwer & Bogaerts (2003) investigated another important macro-related aspect for the case of Belgium. There is evaluated whether shortening of the social benefits period influences the labour market participation of long term unemployed women. The study showed that the limitation of social benefits period leads to a withdrawal of long-term unemployed women from the formal labour market and that the chance of re-entering the labour market – for long-term unemployed women – is the most influenced by age, period of inactivity and citizenship. 188.8.131.52 Work-to-work mobility oriented studies In these studies the TLM theory is used to analyse the nature and kind of transitions around the domain of work. One interesting work-to-work study is that of De Koning et al. (2003). The authors focussed on the probabilities of individuals on moving from one employment status to the other. Surprisingly, this study is one of the few studies, which have looked at the satisfaction of employees toward their working career. Among others the study showed that
age, presence of children and attendance of training are factors, which influence the transition probabilities the most. Another interesting study is the study of Kruppe (2002). By means of the TLM theory he has been able to analyse the interaction of flows between different domains. A comparable study has been also conducted by Muffels et al. (2002). In their study the employment dynamics were linked to different types of employment regimes (as classified in the framework of Esping-Anderson, see also pp. 22). The study showed that people experience different mobility patterns in different kind of employment regimes. For example, the liberal employment regime counts the most frequent movements into up- and downward mobility, whereas individuals within social democratic employment regimes were less able to move from a part-time job into a full-time job because of different labour market constraints. As we can see the work-to-work mobility oriented studies often compare different countries to each other too. In almost all the results of the studies in this classification, we can see findings, which address to the size, nature or direction of flows into other domains. In De Koning et al. (2003), Vandenbrande (2001), Anxo et al. (2000) some of the results have been also relevant for the transition between care-to-work. Other studies such as Kruppe (2002), Smith et al. (2000), Schömann (1998), De Koning & Mosley (2001) show among others interesting results about the dynamics and flows around the transition from unemployment-to-employment. The study of Grimshaw et al. (2000) was the only study in this category, which analysed the employment flows and statuses within a single sector among three countries. This kind of cross-national investigation still needs to be conducted more in the future in order to look at the differences or similarities of industrial sectors regarding the labour dynamics. 184.108.40.206 Unemployment-to-employment mobility oriented studies Although the work-to-work mobility oriented studies analysed issues related to unemployment, this category underlines the effects of active labour market programs on the unemployed groups. In this context the TLM theory is used as a framework from where can be evaluated whether active labour market programmes (ALMP) have had results in terms of movements from ‘negative’ transitions, such as unemployment, into the ‘positive’ ones, such as employment or education. The studies showed that, although relatively small, there is some empirical support for the claim that these programs help to reduce total unemployment and long-term unemployment (De Koning & Mosley, 2001). The rate of return on training
programmes for ‘hard-to-place’ individuals such as ethnic minorities or women with long career interruptions is relatively high in case of course completion (Schömann, 2001). De Koning (2002) has given a significant contribution in his study by writing a review of all training-oriented studies and summarising the results of the programs for the unemployed. His review study showed among others that unskilled persons have been underrepresented in most training instruments and that there exists a lack of information among the unskilled persons about the role of implementation of those instruments. The study of Gelderblom et al. (2002) has also been focussed on the training participation of unemployed and the factors that influence the risk of becoming unemployed. Another study, De Koning et al. (2003) examines factors that influence the probabilities of moving from one domain to the other. 220.127.116.11 Employment-to-retirement mobility oriented studies During our literature review we could not find studies that used the framework of transitional labour markets to investigate aspects on this area. The few studies we found were focussed on the participation of older workers in training programs. For example the study of Gelderblom & De Koning (2002) analysed the relationship between productivity and age and was focussed on the older workers from 55 - 64 years old. Also the study of Jolivet (2002), which investigated the training practices of older workers, was focussed on the same group.
3.3 The used research methods In addition to the contextual diversity in which the TLM theory is used by different researchers, we identify also a substantial degree of methodological diversity. In this subsection we will go briefly through the used research methods and will summarize the used data collection, data sets and variables employed in the TLM literature. These issues are important because they show what types of data sets and variables different researchers used to investigate aspects on the macro and micro level of the labour market drawn from the TLM framework. 3.3.1 Data collection and used data sets As noted previously we identified studies within two main contextual domains: (1) policyoriented domain and (2) mobility-oriented domain. The studies within these domains use different means of data collection. The policy-oriented studies collect their data by means of empirical materials based on literature studies and surveys about specific institutional systems
and labour market regulation in a country. Except empirical material based on secondary publication about the statutory legislation, many authors (Rubery et al. 2000; Anxo & Storrie 2003; Auer, 2002; Boulin et al. 2003) used in their studies also additional information. This information comes from the employment and statistical services at national level and in some extent from collective agreements at industry/branch level. For example, Rubery et al. (2000), collected their information on the industry level, by means of a range semi-structured interviews conducted with personnel managers from the bank sector, trade union representatives, branch managers and call-centre managers. Anxo et al. (2000) on the other hand collected their empirical materials by looking at the working-time agreements at industry, company and individual level. Mobility-oriented studies used another kind of materials in order to examine the dynamics and mobility patterns of individuals. The data sets from European Commission Household Panel (ECHP) and European Labour Force Survey (ELFS) were the most used in different mobility studies (Albert et. al. 2002, Cebrián et al., 2000, Kruppe, 2002, Muffels, et al. 2002). By interviewing a representative sample of households, the ECHP data offers a wide range of research possibilities about different topics. The only limitation of this data set is that the studies could only use information of the first wave of the panel survey. Because of this only examination of short-term issues could be possible such as labour market participation or labour market mobility in a certain year. As information of other waves will become available other kind of research about long-term implications will become possible. The data from European Labour Force Survey (ELFS) on the other hand have also been useful for researchers in analysing the labour market participation of specific groups in or between countries at a given moment of time. The advantage of the ELFS data is the large sample of households, which are being interviewed over a period of five quarters. The limitation of this data set is the relative short period information gained from the survey. Furthermore, there is also a problem according to attrition. There are individuals who fail to respond on each interview period. In this way not only there is a sample loss, but also the vulnerable groups remain underrepresented in the sample. Because of the limitation of this panel and survey data the studies that used the ECHP and LFS data sets, conducted discrete type of measurements by comparing two different years with each other and by examining short-term aspects of labour market. Other panel data sets offered by the Dutch Institute for Labour studies (OSA), German socio-economic panel (GSOEP and GLHS) and the British Household Panel Survey (BHPS) offered information suitable for research over a longer period. The studies that used these data sets, conducted a 19
continuous type of measurement by following the transitions of individuals over a longer period. Despite of the advantages and disadvantages of different kind panel and survey data, the used data sets have been useful and have provided information about the kind and nature of transitions, frequency of movements and different other aspects that are important in mobility-oriented studies. 3.3.2 Independent and dependent variables In general all the studies in our review used dependent and independent key constructs to measure aspects on macro and micro level of the labour market. We noticed three common types of independent key variables that – although the different natures – are present in the policy-oriented studies as well as in the mobility-oriented studies. We classify these types in (a) macro (b) meso and (c) micro independent variables. Macro variables are those related to the institutional set up in and around the labour markets and labour market regulation in a country. Meso variables are those related to the labour market sectors and industries while micro variables are those related to one’s individual background. In the policy-oriented studies the macro and micro variables are by far the most occurring independent variables. Some of the policy-oriented studies used only macro variables to describe specific labour market regulations and policy developments in and around the critical transitions as introduced by the framework of the TLM theory. For example the studies of Anxo et al. (2002); Visser, (2003); Wilthagen, (2001); Boulin et al. (2003); Cebrian et al. (2003); Muffels, (2000) use the existing working time regulation in different countries of the European Union as a macro variable in order to describe the degree of working-time flexibility and the emergence of non-standard employment in different European countries. Other policy-oriented studies (O’Reilly et al. 2003; Smith, 2003; Anxo et al. 2003; Anxo et al., 2000) used on the other hand macro and micro variables to evaluate the effects of different policy developments on the labour dynamics of individuals situated at different labour market segments. There are also policy-oriented studies (Detzel, et al. 2002; Rubery et al. 2000), which used macro, micro and mezzo variables to evaluate the effects of different policy developments on the labour dynamics of individuals situated at different sectors in the labour market. As the research topics of the policy and mobility-oriented studies differ from each other, also the types of macro variables within both kinds of studies have different natures. For example policy-oriented studies used working time regulation as a macro variable to describe their effects on the labour dynamics of individuals in a country, while mobility20
oriented studies used among others the mobility rate as a macro variable to describe the dynamic interaction of flows between different life domains. Mobility-oriented studies (O’Connell et al., 2002; Albert et al., 2002; De Koning et al, 2001; Gangl, 2000; Lathouwer et al., 2003; Anxo et al. 2000) combined macro and micro variables to analyse the impact of institutional set ups and/or policy developments on wages, work productivity, employment dynamics, quality of employment and decisions regarding future education and working career. In sum, this section gave us the possibility to introduce and describe the research issues of the 38 studies as well as the context in which the framework of the theory has been used. Furthermore, we highlighted briefly the used data sets their limitations and possibilities, as well as the different types of used variables in the policy and mobility-oriented studies. In the next section we will discuss the contribution of the TLM theory on the labour market literature by discussing macro and micro findings of the conducted studies.
3.4 The contribution of the theory on the labour market research In this section we will provide an assessment of the contribution of the theory by integrating the key findings of the 38 conducted studies. Since we could find only few studies concerning the industrial level in our literature review, we have chosen to analyse macro findings (related to different policy developments) and micro findings (related to the mobility patterns, transitions and dynamics of individuals in and around the labour market). By analysing the macro and micro findings of the studies we will try to examine whether the TLM theory has provided a solid framework to describe and explain different labour market phenomena. 3.4.1 Macro findings Through time governments in many countries have developed many arrangements and policies to take care of individuals. However, the last decades have brought many changes as result of modernisation processes (demographic changes, blurring of boundaries between domains and changing labour markets). The challenge for the governments has been to anticipate to these changes by presenting arrangements that prevent individuals from existing and new risks. The policy-oriented studies show that governments have actually developed arrangements that anticipate to some of the demographic changes such as the increase of female labour participation. For example many countries of the European Union have developed working-time arrangements to ease the balance between work and personal life 21
(Anxo & O’Reilly, 2002; Anxo & Storrie, 2003; Cebrian et. al., 2003; Boulin et. al., 2003; O’Reilly & Bothfeld, 2003; Visser, 2003). However the outcome of these arrangements differs between countries. The TLM theory has succeeded in offering researchers a framework from where they could describe, analyse and compare policy developments in different countries. However, the framework has not been able to offer elements that explain the reason of why outcomes of similar arrangements differ between countries. If we would link the descriptive framework of the TLM theory with the explanatory framework of the welfare states of Esping-Andersen (1990), we are able to understand the differences between countries. Esping-Andersen (1990) distinguishes three kinds of welfare states, namely: (1) the social-democratic welfare states characterised by high level of decommodification, universal benefits and high degree of benefit equality; (2) the conservative welfare state characterised by moderate level of decommodification, social benefits mainly dependent on former contributions and status; (3) the liberal welfare state characterised by low level of decommodification and marketdifferentiation of welfare. One important difference between these two frameworks is that Esping-Anderson focuses on the decommodification degree and level of benefit equality among countries in general, while Schmid focuses on the impact of different institutional constructs –such as policies, arrangements, rules – on the life course of individuals and their contribution to prevent negative events - such as unemployment - to become gates to social exclusion. 18.104.22.168 Different functions of working-time arrangements across different welfare states As mentioned previously if we link the classification of Esping-Anderson to the framework of TLM regarding the working time arrangements we would understand how similar arrangements fulfil different functions in different countries. For example the study of Anxo & Storrie (2003) argues that Sweden – which according to Esping-Andersen belongs to the social-democratic welfare state and according to Schmid to regimes with high level of security and low degree of labour flexibility – looks at the working-time as a means to achieve family policy goals and uses it to promote equal gender opportunities. Furthermore, the study shows that the combination of institutional and societal aspects with the decentralisation of the decision-making process concerning working time is one main factor, which provides smooth working-time transitions over the life cycle in Sweden.
Another view appears in France – which according to Esping-Andersen belongs to the conservative welfare state and according to Schmid to regimes with high level of security and low degree of labour flexibility – where the number of measures to reduce labour costs and to enhance flexibility has had a limited effect on unemployment rates. According to the study of Boulin et al. (2003) the encountered arrangements in France – in order to increase workingtime flexibility – have had a very weak impact on the transition between care-to-work, and that because of the unpaid leave programmes. One other aspect that has weakened the impact of working-time arrangements in France are the established recruitment policies. According to the study of Detzel & Rubery (2002) short-term employment contracts in France do not assist entry to more stable employment, because the employment opportunities are more related to initial job and to accumulated work experience than to the educational level attained. In Germany – also part of the conservative welfare state according to Esping-Andersen – the re-organisation and reduction of working time is gone hand in hand with wage moderation (Anxo & O’Reilly, 2000). But also here, there remain differences in the outcomes of working-time transitions. This has often to do with differences in the system of taxation and other regulations within a country. For example the households in Germany are worse off when the female works full-time because the taxation system is found on a family base and not on a individual base (Anxo & O’Reilly, 2000). From the studies appears that the institutional set up of Germany does not stimulate women enough to enter and remain part of the labour force. According to the study of O’Reilly and Bothfeld (2003) the continued presence of the long-term unemployed has indicated limited transition possibilities, in particular for women, making them more vulnerable to drop-out transitions followed by interrupted employment careers and employment periods. In contrast West German men are more likely than women to take a part-time job between training or education opportunities. For the small number of men that make transitions into a part-time job, the transition is associated with moving within the training system to something better, while for women it is more likely that this transition is only a brief interruption to being non-employed (O’Reilly & Bothfeld, 2003). In the Netherlands the encountered working-time arrangements, such as the workingtime reduction, have lead to an increase of employment and women labour market participation (Visser, 2003; Anxo & O’Reilly, 2002). Also the development of the law ‘Flexibility and Security’ has attributed in the flexibility of the labour market and the security of weaker groups (Wilthagen, 2001). However, compared to the Swedish and English women, Dutch and German women show less mobility and participation on the labour market (De 23
Bruijn, Reçi, Bleijenbergh, 2003). One important factor that hinders the mobility of Dutch women constitutes the lack on childcare and unpaid leave programmes. At last we notice also differences in the outcomes of working-time arrangements in England, which according to Esping-Andersen belongs to the liberal welfare state and according to Schmid to regimes with low level of security and high degree of labour flexibility. According to the findings of Detzel & Rubery (2002) there rules career immobility among individuals in England, because of a weakness of the institutional support for the acquisition of formal qualifications. The labour market in England provides a higher extent of stratification by providing a higher level of security on the insiders and a low level on the outsiders of the labour market. According to Smith (2003) the interaction of the labour market and the welfare system has created its own rigidities associated with benefit traps and working poor. These rigidities in the employment regulations create vulnerability of men and women in the labour market because of the lack of social securities and result in different transition patterns among individuals in England. For example British men work very long hours (45> a week) (Anxo & O’Reilly, 2000) to gain a living income and are more vulnerable to drop- out transitions (Anxo & O’Reilly, 2002). Women on the other hand show stable employment careers (Anxo & O’Reilly, 2002), followed by high labour market participation (Smith et. al. 2000). The problem of childcare facilities on the other hand, is laid down to the individuals that often are pushed to rely on the help of family or expensive private day-care (Anxo & O’Reilly, 2000). The stimulation of working-time arrangements in England, such as flexibility of the employment contracts, has not quite been effective in terms of stable and continuous incomes and securities. According to the findings of Smith (2003) temporary or irregular work in England, may lead to more insecurity than a regular flow of income that individuals might receive from the state if they re-enter the benefit system after the loss of a job. Furthermore, the concentration of part-time work in low-paying jobs in England, means that balancing work and family life through part-time work can lead to loss of lifetime income, occupational status and welfare rights (Smith, 2003). In sum, by combining the framework of welfare states (Esping-Andersen, 1990) with the framework of TLM we could see that working-time arrangements fulfil different functions in different countries. We could see that for example in Sweden working-time arrangements were used as a tool to enhance equal gender possibilities and in France as a tool to increase the working time flexibility. While the working time arrangements led into increase of female labour participation in the Netherlands, these arrangements led among others into increased 24
income and career insecurities in England. The functioning of the working-time arrangements (but also other arrangements) depends on a combination of historical, societal, economical and institutional regulations in a county. This means that applying ‘best practices’ as a method to follow each others’ practices does not provide a guarantee for success in other countries. In this case government – as purposed by the TLM theory - government has to take the role of a facilitator, evaluator and if necessary creator of new arrangements that support the stimulation of ‘positive’ transitions in co-operation with the institutional context within a country. 3.4.2. Micro findings As mentioned previously micro findings are related to studies that have examined the mobility patterns, transitions and labour dynamics of individuals in and around the labour market. The framework of the TLM theory has contributed in these studies as a conceptual model from where they could organise and structure the different life domains and organise the transition flows in and around the labour markets. Drawing from the framework of the TLM theory researchers have been able to analyse the impact of specific institutional set ups or development of institutional arrangements on the occurrence, direction and nature of five critical transitions in the life course of individuals as introduced in the TLM framework. In doing so, they have been able to reveal (1) factors that influence the education and early career choices, (2) effects of policy developments on women’s family-work dynamics and (3) labour dynamics. Furthermore, they have been able to (4) highlight the effects of training on the occupational mobility and (5) the effects of training policies on the social integration of the unemployed. In this sub-section we will briefly outline the findings of these studies. 22.214.171.124 Education and early career choices In our review we identified studies that used the TLM theory as a framework to investigate factors that influence the education and early employment choices of young people. A better co-ordination between the educational system and the labour market, as purposed by the framework of the TLM, is important to improve smooth transitions between education and work and leads to better education and early career choices for young people. The findings of Boulin et al. (2003) show that French young people experience difficulties in the transition from the education system to employment. This fact pushes them to spend longer in education than in other European countries. Also the findings of Detzel & Rubery (2002) support the findings of Boulin et al. (2003). They argue that the educational system as well in France as in 25
England is characterised by a lack of co-ordination between the education system and the labour market, creating for young people barriers in the transition from school-to-work. But, there are also countries such Germany where the transition from school-to-work goes very smoothly because of the vocational labour market and its dual system (Detzel & Rubery, 2002). As we can see one of the factors that influences the direction of future transition patterns of young people is the educational system in a country, but other studies show also other factors that influence the direction of future transition patterns as well. Findings of Albert et al. (2002) show that social capital plays an important role on the behaviour of young people toward educational choices. According to this study the choices that young people make about the further education are not only influenced by the educational system in a country, but especially from their individual preferences that are influenced for a great part from the parents’ background and their educational attainment. Especially mother’s educational attainment determines the probability of demanding post-compulsory and tertiary education. Also the study of Verdú et al. (2002) shows that parental background and educational systems influence the demand for further education more than the labour market and income expectations of young people. According to the study of Audier (2002) the young labour market entrants are not in competition with each other since they are segmented into labour markets organized by educational level. However, according to Schömann (2000) second chance education needs to be reformed with elements of transitional labour markets to avoid exclusionary recruitment patterns within industrial sectors and inequality among genders. The study of Gangl (2000) shows that also human capital is a factor, which influences the transition patterns of young individuals as well. According to his study there is a relationship between the human capital and (future) chances on the labour market. The study shows that entrants with higher level of education experience lower unemployment risks and lowest qualified leaver higher unemployment risks (Gangl, 2000). Furthermore, completion of vocational training reduces unemployment risks for both lower secondary leavers and leavers with academic upper secondary education. However, having attained a high level of education does not guarantee a secure and continuous working career anymore. Attendance of different training’s and courses during the working career are important to hold up the needed knowledge in order to remain part of the labour force.
126.96.36.199 Effects of working time arrangements on women’s’ family-work dynamics In these studies the framework of the TLM theory has contributed to analyse the employment dynamics and working time transitions of women as result of the implementation of different working-time arrangements. Providing different working-time arrangements that offer individuals the possibility to find an optimal combination between their working careers, care duties, education and free time - as purposed by the framework of the TLM - is shown to be very important for the female labour participation. According to the study of Cebrián et al. (2000) the working-time arrangements of women are not only affected by different workingtime arrangements but also by the presence of children and their age. Furthermore, age and education of women are two main factors that distinguish women who participate in paid employment from those who do not. The study of Anxo et al. (2000) shows that the participation level of women in the Netherlands and Sweden depends not only on the institutional settings, but also on the general attitudes that exist in a country toward working women. Other interesting result of this study show that Dutch women make more frequent movements from short hour part –time work into housekeeping, while Swedish women move more frequently from short hour part-time work into long hour part-time work. According to the study of Bothfeld and O’Reilly (2000) part-time employment shows grown importance among women in Germany and Britain and has an important function to integrate those outside the labour market. Especially women who have worked full time previously are more likely to move again in full time employment after having worked a while part-time. For the study of Lathouwer and Bogaerts (2003) the TLM theory has contributed to investigate the impact of a shorter social benefits period on the labour supply of long term unemployed women. The study shows that a limitation of social benefit period leads into labour market withdrawal of long term unemployed women. The factors that stimulate their re-entry chances are the period of inactivity, citizenship and age. 188.8.131.52 Employment dynamics The studies in this category used the framework of the TLM theory to analyse the employment dynamics in the labour market and their interaction between different employment statuses. Two-way transitions between education and work, as purposed by the framework of the TLM, has shown to be very important in the stimulation of upward occupational mobility and the social integration. According to the study of Vandenbrande (2001) labour mobility is dependent on the age of individuals, gender and education level. The study shows that in Scandinavian countries like Finland and Denmark the size of labour 27
market mobility is twice so high as in Belgium or Greece, Italy and Portugal. Especially the flows around work and education are high the Scandinavian countries. Also the findings of Schömann et al. (1998) show similar results about the employment dynamics in the EU countries. According to this study age, gender and education are important factors, which determine the job chances in the labour market of many EU countries. Furthermore, they have observed a one-direction movement between education and employment in the most of the EU countries except in the Scandinavian countries. According to the study of Muffels et al. (2002) employment dynamics depend also on the type of employment regimes (as classified by Esping-Anderson, see pp. 22). For example employees in temporary jobs make more frequent transitions in liberal countries than in social-democratic and conservative countries. Furthermore, the study shows that fewer employees in social democratic regimes are able to move from a part-time job into a full-time job. This comes as a result of differences in the construction of the labour market regimes. Also the findings of Smith et al. (2000) show similar results about employment dynamics. According to this study the proportion of movements from and towards unemployment are higher n Spain than in UK and are influenced the most by the presence of temporary contracts. Furthermore, only few Spanish women use part-time work as a tool to combine work and family life, because of a lack of part time jobs and the dominance of the male breadwinner system. 184.108.40.206. Effects of training on the occupational mobility and training selectivity The theory of TLM has contributed in these studies in understanding how training influences the upward or downward occupational mobility of employees in their mid-life career. Empowerment of individuals through life long learning - as proposed by the TLM theory - is shown to have positive impacts on the working career of individuals. According to the study of De Koning & Gelderblom, (2001) O’Connell & McGinnity, (2002) training has a positive effect on the labour market mobility and income of different groups of individuals. Furthermore, the study of De Koning and Gelderblom (2001) shows that for the employed low educated individuals, women and minorities training increases the chances of finding a better job. On the other hand for the older workers training is effective in reducing their expulsion from the labour market and improves the productivity-wage ratio. Thus, the more training attended by older workers the higher the supplied productivity and the higher their chances to remain part of the working force.
The studies show that the effects of training can differ between sub-groups. According to the study of Schömann & Becker, (2002), men who take full-time courses have a much higher risk of becoming unemployed than part-time participants do. With other words those men that take part in courses outside working hours (part-time participants) found employment sooner than other participants or non-participants. The studies of O’Connell & McGinnity, (2002), De Koning et al. (2003) show that unemployed that attend different programs and courses have higher chances to find a job after a period of unemployment (O’Connell & McGinnity, 2002; De Koning et al. 2003). However, on the other hand according to the study of Gelderblom et al. (2002) periods of unemployment reduce the likelihood of attending courses. Despite the positive effects of training on the stimulation of upward mobility of individuals, in practice individuals seem not to experience equal access on training opportunities. According to the conducted studies there exists a training selectivity among firms, which is related to the following factors: (a) Composition of workers in a firm: according to the findings of Jolivet, (2002) if a company has not a large concentration of workers aged 45> in the work force, older workers have a higher access to training. On the other hand the study of Gelderblom et al. (2002) shows that firms with a concentration of low-educated and female workforce often do not offer trainings. The studies show that companies offer training’s to those workers who can justify the labour costs and are able to reverse these costs in returns. This makes other groups – such as women, low educated and minorities - more vulnerable to dismissals since the firm has not invested in them in terms of training. (b) Size of the firm: According to the study of Jolivet (2002) the training selectivity and access inequality is higher in small companies. Findings of O’Connell (2002) show that this comes because the diseconomy of scale raises the unit costs of training for workers in small companies. (c) Construction of employment contracts in a firm: The study of Gelderblom et al. (2002) shows that the lower the number of part-time workers, the more intensive the training in a company. (d) Workers’ degree of education: According to the study of De Koning & Gelderblom (2001) the workers with high education constitute the highest share of the course participants, letting low-educated and older workers underrepresented in the course participation. These findings are supported also by findings of De Koning, (2002), Gelderblom et al. (2002). The difference in participation degree creates training’s selectivity and inequality among individuals and leads to negative transition patterns during the working career. According to the findings of 29
De Koning & Gelderblom, (2001) vulnerable groups - such as low-educated people, minorities and unemployed women – experience a lack of information about the role of training. By not being aware of the importance of the training’s or the possibilities to attend training, the vulnerable group of individuals remain always underrepresented in the training programs (De Koning & Gelderblom, 2001; De Koning, 2002). 220.127.116.11 Effects of training policies on social integration of the unemployed In these studies the framework of the TLM theory is used to examine the impact of active labour market policies on the elimination of long-term unemployment and social exclusion. Empowering individuals with skills that help them to bridge critical events in their lives, as purposed by the framework of the TLM theory, is important to improve the social integration of the unemployed and vulnerable groups such as low educated, women and minorities. The study of De Koning and Mosley (2001) show some empirical support that – despite of their small significance – claim that active labour market policies help to reduce long-term unemployment if there is a close link between these policies and labour markets. Furthermore, the study shows a significant upward effect on the outflow from unemployment to employment. According to the findings of De Koning & Gelderblom, (2001) vulnerable groups - such as low-educated people, minorities and unemployed women – experience a lack of information about the role of training. By not being aware of the importance of the training’s or the possibilities to attend training, these vulnerable groups remain always underrepresented in the training programs (De Koning & Gelderblom, 2001; De Koning, 2002). Summarised, in this section we tried to show the contribution of the TLM theory on the labour market literature by the assessment of macro and micro findings. As we could see the TLM framework offered a large descriptive and analytic contribution for the different studies. However, there are still research areas that remained untouched letting specific groups and topics underrepresented. The next sub-section goes deeper into these future research areas and offers some suggestions for theoretical refinements.
3.5 Future research areas and theoretical questions In this sub-paragraph we will go deeper into the research areas that in our opinion deserve more attention in the future research. We will also try to offer some recommendations for further refinement of the TLM theory.
3.5.1 Future research areas within the policy-oriented domain 18.104.22.168 Broadening the research focus regarding the effects of policy developments During our review we noticed a tendency among policy-oriented studies to use the TLM framework to investigate the impact of working-time arrangements on the life course of individuals. As we could see in the previous section, these studies provided a clear picture about the implications of working-time arrangements on the life course of individuals in and among different European countries. However, we argue that the TLM framework could be also useful to investigate other policy developments at other life domains such as for example the effects of advanced retirement on the flows around employment and retirement or the impact of working-time reduction on the increase/decrease of jobs in the labour market. Furthermore, we argue that the framework could also be used in a broader research context to investigate labour market issues among the EU, United States and Canada. 22.214.171.124 Enlarging research regarding the institutional- industrial impacts Another area that has by far been underrepresented is the area of industrial relations. We have seen that the policy-oriented studies were focussed on the relationship between macro and micro level, neglecting the industrial level. It would be of importance to examine the impact of specific institutional arrangements on firms’ policies toward their recruitment and training and how firms’ policies change over time as result of new institutional arrangements. On the other side there is also research needed to reveal the effects of important events within a firm – such as the acquisition or merger between firms – on the transition behaviour of individuals. 126.96.36.199 Enlarging research in the transition from employment to retirement One other area that has been underrepresented in research is the transition from employment to retirement. During our review we could not find any study that drawn from the TLM theory tried to investigate issues in this transition. Since the TLM theory offers a descriptive framework that helps to describe and analyse issues on the institutional and individual level, it would offer researchers a proper groundwork to analyse and describe issues within this transition. Examples for future research in this area could include the examination of effects of advanced retirement to the increase/decrease of jobs, or the impact of this arrangement to the firms.
3.5.2 Future research areas within the mobility-oriented domain 188.8.131.52 Broadening the research focus on changes within a single domain By trying to analyse the dynamics and mobility in the labour market, many studies often examine the interaction of flows between different domains and pay less attention on the interaction of flows within a single domain. For example drawing from the TLM theory, there are only few studies conducted that examine the interaction of flows within the domain of unemployment regarding the transitions they make within this life domain such as the kinds of activities they undertake during their period of unemployment, whether they participate in social activities, attend a course or participate in voluntary jobs. The same is the case within the domain of retirement. There are no studies conducted from the TLM perspective about the transitions of elderly within the domain of retirement. 184.108.40.206 Applying the TLM framework on minority groups The studies conducted to investigate aspects on the transition from care-to-work used the framework of the theory to conduct country comparative research on labour participation and mobility of women. However, the framework is not applied to the life course of migrant women and the (interrupted) working career during their life. In our review we could not find any research – except the study of De Koning and Gelderblom, 2001 – that addresses to the participation and mobility of migrant women and men among different countries. We argue that the TLM framework decent to investigate differences in labour market participation of homogenous groups of individuals in different countries. By identifying the differences we can be able to explain how unemployment can be combated and prevented within different groups of individuals. 3.5.3 Theoretical questions As we have seen in the previous sections through the unique framework of the theory researchers have been able to provide a wide range of information on the institutional level about the evolution of institutional set-ups among countries, the effects of these evolutions on the development of new arrangements and the effects of the arrangements on the transition patterns of individuals. Despite of the strengths we noticed also some limitations that deal with (1) missing elements of the theory to explain macro related outcomes and (2) the need on a more dynamic nature of the TLM framework in order to follow the macro-micro interplay. 32
220.127.116.11 Missing explanatory elements As we could see previously, many policy-oriented studies described and compared institutional set ups of countries regarding specific arrangements by means of the TLM framework. In spite of this descriptive contribution, the TLM framework has not been able to offer elements that explain implications of institutional arrangements among different European countries. In the mentioned macro findings we could see that a combination of the framework of Esping-Anderson with the framework of TLM could offer a framework that broadens the existing insights about institutional differences between countries by showing that similar institutional arrangements imply different outcomes in different countries. Building further on one earlier study of Muffels et al. (2002) adding two dimensions on the macro level of the TLM theory would make it possible to explain differences in labour market performance of different countries. As suggested in the study of Muffels et al. (2002) these two dimensions would be (a) labour market flexibility and (b) work-security. Labour market flexibility deals with the degree of occupational mobility between different employment statuses and work security deals with the continuous employment stability present in a certain welfare regime. Combining the classification of Esping-Anderson with these new dimensions of transitional labour markets would provide the following picture: Figure 3.1: Two dimensions of TLM
Social democratic Conservative regime
The study of Muffels et al. (2002) has shown that liberal regimes offer low employment securities, but on the other hand experience a high degree of occupational mobility for a part due to the flexible labour market not bounded at complex rules and employment protections. The southern regimes perform worse in terms of enhancing occupational mobility and on
offering continuous employment stability. On the other hand social-democratic and conservative regimes offer more security in order to prevent social exclusion, but as result make the labour market less flexible. The study shows that adding dimensions on the macro level of the TLM theory offers researchers the possibility to derive hypothesis and to measure the impact of certain institutional arrangements - in terms of flexibility and work-security - on the transition patterns of individuals. In doing so the framework of TLM theory would be able to offer explanations about differences in policy outcomes among different countries. 18.104.22.168 The need of a more dynamic model As we could see previously the analytical component of the theory pays attention on the moments of vulnerability of the individuals and analyses the interaction between flows, but pays little or no attention on the occurrence of the transitions and the way they change over time. According to the studies of Blossfeld, (1989,1995,1996); Mayer and Tuma, (1990); Huinink, (1993) life-courses are time-related and selective shaped by the history-specific institutions and culture as well as by individuals. They emerge and change under particular historical conditions and differ between different cohorts. The present framework of the TLM is static in the sense that it is not able to follow the macro – micro processes over time. In order to achieve that, we need to study the transitions of individuals from the perspective that they interact with these processes over time. According to Blossfeld (1996:182): “a good sociological theory should not only allow us to explain (or understand) a given outcome at present with reference to the closed past, but also help us to predict outcomes in an uncertain future with reference to the known past and present conditions”. The TLM framework needs to be refined in this area and to take the dimension of time under consideration. In doing so, the framework will offer not only a descriptive framework but also a model that explains and predicts the macro-micro interplay. In sum, this section pointed at areas that deserve more attention in the future research and offered some suggestions to extend the explanatory power of the theory and to turn the nature of the TLM framework into more dynamic in order to capture the occurrence and changes of transitions over time.
4. CONCLUSION The purpose of this paper was to provide a theoretical review of the TLM theory. Prior to the theoretical review we offered a brief outline of the key constructs of the theory and discussed briefly the origins, assumption, definitions and the two important components of the theory in the second section of the paper. In the third section we tried to provide the purposed theoretical review by focussing at three questions: (1) In what contexts has the TLM theory been applied through the conducted studies and what kinds of research methods were used to investigate topics on the macro and micro level of the labour markets? (2) What kind of contribution has the theory offered to investigate different issues of the labour market? (3) Which theoretical issues deserve more attention in the future? During our literature research we identified studies that used the framework of the theory of transitional labour markets within two main contextual domains: (1) policy-oriented domain and (2) mobility-oriented domain. Within the policy-oriented studies we could notice (1a) case and (1b) comparative studies, which evaluated whether the designed institutional arrangements had been able to reduce the high flows into unemployment, inactivity and social exclusion. On the other hand validity studies (1c) were one other sub-category of policyoriented studies, which evaluated whether the concept of transitional labour markets could be applied to measure different labour market issues. Within the mobility-oriented studies, research was focussed on the investigation of labour market dynamics around the five critical transitions, namely: (2a) school-to-work, (2b) care-to-work, (2c) work-to-work, (2d) unemployment-to-work and (2e) work-to-retirement. Except contextual diversity in which the TLM theory was used by different researchers, we identified also a substantial degree of methodological diversity. Through empirical evidences we could see that the TLM theory has contributed in offering the researchers a framework from where they could organise and structure the different transitions in and around the labour market. From the macro findings we could see that the TLM theory has contributed in the extension of the labour market research according to the effects of working-time arrangements in different countries. By means of the TLM theory many studies were able to investigate the impact of specific working-time arrangements on the life course of individuals. From the micro findings we could see that the theory of TLM has contributed to offer a framework from where researchers could analyse not only the transition patterns of individuals but also the forces that influence their directions. By underlining the forces that influence these patterns they have been able to show areas on the educational and institutional systems, which deserve special attention in the 35
future. For example we could see that a good co-ordination between the educational system and labour market plays a crucial role in the transition patterns of young peoples, while a proper facilitation of training policies in firms would lead into the elimination of selectivity and inequality among employees. Finally, the usage of the TLM theory as a conceptual framework for the studies contributed also in the enlargement of country comparative research. In doing so, the theory offered a closer look to the practical examples of European countries and a groundwork in where different countries can learn from each other’s practices. In spite of the supplied contribution of the theory there still remain some research areas - within and between life domains - that deserve more attention in the future. Also important to take under considerations are two suggestions for further refinement of the theory. The first suggestion was related to the fact that the framework of the TLM theory misses dimensions that make certain measurements and predictions possible for certain future phenomena and/or patterns. The second suggestion pointed at the static nature of the present TLM framework. Extending and refining these areas in the future would make the TLM framework much more useful not only in explaining labour market phenomena on the macro and micro level, but also on predicting different issues. According to the study of Rindfleish & Heide (1997) “the first step in refining any theory is to conduct a thorough assessment of its current status and a synthesis of its key findings”. By offering this theoretical review we lay the conceptual groundwork for a further refinement and extension of the theory. We hope that this review will challenge researchers to provide further extensions of this intriguing theory.
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