Flexicurity: Panel Data Analysis for OECD Countries

Abstract

This study examines the changes occurring as a result of the changes in modern labor markets and technological developments with panel data analysis for the member countries of the Organization for Economic Development and Cooperation (OECD). Flexibility policy components by the European Commission are grouped under four main headings: flexible and reliable contract arrangements, lifelong learning, effective labor market policies, and modern social security system. Indicators of these policy components have been determined to monitor and evaluate the policies implemented, as each country adopts different flexicurity strategies. Using at least one indicator for each component, a data set of 35 OECD countries for the period 2008-2017 was created. The effects of flexicurity practices on the general unemployment rate, youth unemployment rate, long-term unemployment rate, and general employment rate, which are among the main indicators of the labor market, were estimated with panel data analysis models. According to the results of the estimates, it can be said that the increase in the strictness of the legislation regarding the protection of employment, especially temporary employment, causes the unemployment rates to remain high while decreasing the employment rate. The relatively flexible implementation of the legislation to protect the labor force, the increase in spending on lifelong learning and modern social security practices stand out as factors that support the decrease in unemployment rates and the increase in the employment rate.

Keywords

• Flexicurity
• Labor Market Flexibility
• Panel Data Analysis
• Regression Analysis
• Random Effect Model
• Fixed Effect Model

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