Article i 'Tidsskrift for arbejdsliv' no. 4 2007, page 79-93.
English resume

Does It Pay ?

Flexicurity and pay in the Danish fl exicurity-model

Flemming Ibsen

In studies of the Danish fl exicurity-model the wage formation process is normally excluded. The model is described as a balanced model, where a trade-off between, on the one side, numerical fl exibility and, one the other side, income security and employability balance the model. A different and supplementary interpretation of the model could be that internal and external fl exibility, where wage earners move from one job to another inside the firm or to another firm, rewards the persons in question with a higher hourly wage. Here, income security in not related to unemployment insurance, but rather to an increase in the hourly wage.
The relevant research question in this article is there for: When Danish wage earners are fl exible, will they then receive a wage, which is higher or lower than the previous wage? Does it in fact pay to be fl exible, and which kind of fl exibility pays most, internal or external fl exibility? Or does it pay to stay ‘unchanged’ in the same job in the same firm?
The theoretical approach is based upon the theory of firm specific Human Capital and the theory of compensating wage differentials and the analysis show, that people “staying unchanged” or being internal fl exible have a greater probability to receive a wage increase than people being external fl exible, especially when they move to another sector. The probability to suffer a wage loss is conversely also greater, when people move outside to either another workplace in another trade or quite another sector. But – all in all – the analysis also show, that most Danish wages earners are rewarded with positive wage gains, when they are showing fl exibility. So the article support the concept of income security in the Danish fl exicuritymodel, but from a different angel.


Tidsskrift for arbejdsliv

(Journal for Working Life)


 

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