Do Flexicurity Policies Affect Labour Market Outcomes? An Analysis of EU Countries

The paper examines the issue of flexicurity in the EU Member States and studies the relationship between flexicurity policy components (i.e., employment protection legislation, lifelong learning programmes and active and passive labour market policies) and labour market performance (i.e., employment, unemployment and long-term unemployment rates) in 20 EU Member States over the 1990-2008 period. The panel regression analyses showed that expenditures for active employment policies and participation in lifelong learning positively associate with labour market outcomes, as they enhance human capital of workers and therefore increase their probability to be employed. On the other hand, generous PLMPs negatively correlate with unemployment-employment transitions. Less explicit are results regarding the relation with EPL strictness. The research findings point to the importance of shaping balanced flexicurity policies for further development of European labour markets and economies.