Transitional Labour Markets: Theory and Policies
Weon-Ho Jeong, Young-Sun Ra, Ki-Rak Ryu, Kyung-Soon Park
In the flexible labour market of today, labour force transitions occur frequently. Such transitions are in genera accompanied byl the deterioration of the position of the labour force in the labour market. This inevitably leads to resistance against the transition itself, which constrains the flexibilization of the labour market. Therefore the management of social risks within the transition process and the provision of security within the labour market are required to ensure the flexibilization of the labour market. In other words, the achievement of the right balance between flexibility and security (flexicurity) is important in today's labour market.
The theory of transitional labour markets (TLM) which has been developed since the middle of the 1990s in Europe maintains that flexicurity should be achieved during the whole life-course of an individual through the management of the social risks which occur during the transition processes in the labour market. It identifies the five main types of labour market transitions as 1) transition between education/training and employment, 2) transition in the various employment relations, 3) transition between (unpaid) private or family-based activities and employment, 4) transition between unemployment and employment, and 5) transition between disability/retirement and employment. The TLM theory defines transitional labour markets as the institutional arrangements that promote smooth transitions through the management of the social risks intrinsic to these transition processes, and insists on the achievement of flexicurity through TLMs.
While interest in this theory has also been on the rise in Korea, the basic understanding of the theory in and of itself remains limited. To this end, the present study primarily focused on the development of the correct understanding of this theory, and the bringing about of a theoretical system of TLMs that includes the following elements: definition of the concept, methodologies based on the life-course perspective, social risk management through TLMs, TLMs and flexicurity, labour insurance and the governance of TLMs.
Thereafter, this study reviewed five labour market policies and social policies in European countries which are regarded as having put in place “good practices” under the TLM theory: the vocational education and training system in Switzerland, the work time accounts in Germany, the short-time work in Germany, the family-friendly welfare policy in Sweden and the active aging policy (FINPAW) in Finland. Some policy implications for Korea were then derived based on a review of these policies.