2.3 Modernizing Antiquated Labor Codes can Remove Barriers to Job Creation and Youth Entry into Labor Markets

Outdated labor codes can restrict entry of young people into the labor market. Lifetime positions, while an important part of job security, can exacerbate many countries’ youth unemployment programs. In many countries, companies hire temporary workers and short-term contractors in order to avoid costs associated with hiring and firing a full-time worker. Arkless provided the example of France. If a new employee underperforms; it can take the company a year and a half and a considerable amount of funds to remove the employee. Some economists look to Denmark and their “flexicurity”1 as a successful model. The Danish model combines flexible hiring and firing with generous unemployment benefits and quality training; this helps to ensure that the right person is in the right job, without stripping workers of their basic security.

  • 1. “Flexicurity is an integrated strategy for simultaneously enhancing flexibility and security in the labor market. It attempts to reconcile employers’ need for a flexible workforce with workers’ need for security – confidence that they will not face long periods of unemployment.” From: http://ec.europa.eu/social/main.jsp?catId=102&langId=en, December 2011.