Hiring, employment, and health in Scandinavia: the Danish ‘flexicurity’ model in comparative perspective

ABSTRACT

Previous research has shown that people with health problems often experience disadvantages on the labour market. Can weak employment protection increase employment prospects for people with ill health? In order to investigate this question, the longitudinal part of the European Union Statistics on Income and Living Conditions (EU-SILC) data material is utilised (2008–2011) and generalised least squares regressions are estimated. The research context is set to Scandinavia. Denmark, Norway, and Sweden are similar in many respects, but deviate on one important point: the employment protection legislation is considerably weaker in the Danish ‘flexicurity’ model. The lenient firing regulations could make employers more prone to take the ‘risk’ associated with hiring someone with a health problem, since the costs related to firing him/her are low. The results reveal that people with ill health have somewhat better hiring likelihood in Denmark than in Norway and Sweden. This pattern is, however, only evident among higher educated individuals. Furthermore, descriptive evidence indicates that the ‘flexicurity’ model seems to come at a cost for people with health problems: The employment rates are not high overall, and temporary work contracts are much more widespread in Denmark. Consequently, labour market attachment for people with ill health remains rather ‘loose’ in the Danish ‘flexicurity’ model.

KEYWORDS:

• Hiring
• employment
• health selection
• flexicurity
• Scandinavia

Acknowledgements

Earlier versions of this manuscript were presented at the Norwegian Sociological Associations’ annual meeting on 23 January 2015, at a workshop on economic crisis and population health in Oslo on 18 May 2015, and at an ESPAnet workshop on health impacts of social policy in Stockholm on 26 September 2015. I wish to thank Jon Ivar Elstad, Gunn Elisabeth Birkelund, Espen Dahl, Elisabeth Ugreninov, and the participants at these seminars for valuable suggestions. I would also like to thank the reviewers for excellent comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributor

Kristian Heggebø has a master’s degree in sociology (2012) from the University of Oslo. He is currently a Ph.D. fellow at Oslo and Akershus University College, on a project named ‘Health Inequalities, Economic Crisis and the Welfare State’. Research interests include labour market analysis, health sociology, educational attainment, and causal inference. His recent work has appeared in Social Science & Medicine, International Journal for Equity in Health, and European Sociological Review.

Notes

1 ‘Economic crisis’ and ‘economic downturn’ will be used interchangeably in this paper.

2 See Minton et al. (2012) for a similar study of newer date.

3 This ‘duality’ is probably the main reason for Denmark (2.10) not being very different from Norway (2.23) and Sweden (2.52) on the OECD employment protection index for individual dismissals for permanent workers (OECD 2013).

4 Pooled EU-SILC cross-sections are not preferable, because it is not possible to localise individuals contributing with several observations.

5 A respondent could easily have status as ‘employed’ in both 2008 and 2009, but still have experienced losing a job and gaining employment between the two survey rounds. This is actually quite common in the current data material.

6 See Tables 4 and 5 for descriptive statistics on employment and temporary work contract in 2011.

7 In absolute numbers: 159, 343, and 331 hirings for Denmark, Norway, and Sweden, respectively. The corresponding numbers for people with bad/fair health are 54, 69, and 48.

8 Significance tests of descriptive statistics are available on request.

9 The differences between people with ill and good health are also significant in OLS regressions of temporary work, by bad/fair health or LLSI, with age, education, marital status, and gender included as covariates.

10 In other words, you probably have to be very sick in order to receive disability benefits in Sweden, at least compared to Denmark and Norway.

Additional information

Funding

This paper is a part of the project ‘Health Inequalities, Economic Crisis, and the Welfare State’, financed by The Research Council of Norway [grant number 221037].