Flexicurity

Flexicurity (a portmanteau of "flexibility" and "security") is a welfare state model with a pro-active labour market policy. The term was first coined by the social democratic Prime Minister of Denmark Poul Nyrup Rasmussen in the 1990s.

The term refers to the combination of labour market flexibility^[1] in a dynamic economy and security for workers.

The Government of Denmark views flexicurity as entailing a "golden triangle" with a "three-sided mix of (1) flexibility in the labour market combined with (2) social security and (3) an active labour market policy with rights and obligations for the unemployed".^[2]

The European Commission considers flexicurity as an integrated strategy to simultaneously enhance flexibility and security in the labour market. Flexicurity is designed and implemented across four policy components: 1) flexible and reliable contractual arrangements; 2) comprehensive lifelong learning strategies; 3) effective active labour market policies; and 4) modern social security systems providing adequate income support during employment transitions.

It is important to recognize that the flexicurity concept has been developed in countries with high wages, besides clear progressive taxation, as in for example, Denmark.

^ The term flexibility effectively encompasses two different models, on the one hand 'numerical flexibility', i.e. the idea of easier to hire and fire contracts as well as 'functional flexibility', closely linked to the concept of 'knowledge society' or 'lifelong learning' (LLL), whereby the European workforce is being prepared for a changing working life, where only a multitude of skills (polivalency) will ensure employment (Crouch, 1999).
^ See http://www.bm.dk/sw3792.asp Archived 7 June 2007 at the Wayback Machine. Another widely referred to definition is "… a degree of job, employment, income and combination security that facilitates the labour market careers and biographies of workers with a relatively weak position and allows for enduring and high quality labour market participation and social inclusion, while at the same time providing (2) a degree of numerical (both external an internal), functional and wage flexibility that allows for labour markets' (and individual companies') timely and adequate adjustment to changing conditions in order to maintain and enhance competitiveness and productivity." Wilthagen and Tros (2004: 170)

[1] The term flexibility effectively encompasses two different models, on the one hand 'numerical flexibility', i.e. the idea of easier to hire and fire contracts as well as 'functional flexibility', closely linked to the concept of 'knowledge society' or 'lifelong learning' (LLL), whereby the European workforce is being prepared for a changing working life, where only a multitude of skills (polivalency) will ensure employment (Crouch, 1999).

[2] See http://www.bm.dk/sw3792.asp Archived 7 June 2007 at the Wayback Machine. Another widely referred to definition is "… a degree of job, employment, income and combination security that facilitates the labour market careers and biographies of workers with a relatively weak position and allows for enduring and high quality labour market participation and social inclusion, while at the same time providing (2) a degree of numerical (both external an internal), functional and wage flexibility that allows for labour markets' (and individual companies') timely and adequate adjustment to changing conditions in order to maintain and enhance competitiveness and productivity." Wilthagen and Tros (2004: 170)

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