Labor Market Reform in Israel and the Flexicurity Option
Author: Dan Ben-David, Liora Bowers
December 04, 2014
Flexicurity is the name commonly ascribed to a set of labor market and welfare policies, adopted primarily by Nordic countries, providing relatively high levels of hiring and firing flexibility to employers alongside a financial safety net and employability for workers.
Flexicurity countries have higher levels and faster growth in labor productivity and the gap between these countries and Israel has been increasing for decades. These countries are also characterized by higher rates of employment and lower rates of poverty and income inequality than Israel – which raises a number of questions, chief among them: is the better socioeconomic performance in flexicurity countries due to flexicurity policies and could this approach be a viable option for Israel? This chapter explores these questions through an examination of the various attributes of flexicurity policies and a comparison of socioeconomic outcomes in flexicurity countries, other country groupings and Israel, and concludes with some relevant policy recommendations.
This paper appears as a chapter in the Center’s annual publication, State of the Nation Report 2014, Dan Ben-David (editor).