Combining flexibility and security for employment and decent work in the Western Balkans

This paper advocates the flexicurity approach for the Western Balkan countries. It starts by a description of the concept and the main elements of the flexicurity approach, which advocates a policy mix combining employment protection legislation, collective bargaining, training, unemployment insurance and active labour market policies as a response to the new employment and social challenges. Further, it provides a brief analysis of recent labour market developments and changes in employment patterns in the Western Balkan countries in comparison with the new EU members, Bulgaria and Romania. It then discusses the possibility that rigidity of employment protection legislation (EPL) may be one possible reason for the poor labour market performance of these countries, as is often claimed by some economists. More generally, evidence on the effect of labour market policy and institutional settings on labour market performance is then presented for the Central and Eastern European countries, since this seems highly relevant for the Western
Balkan countries as well. The last chapter contains conclusions and policy implications.

The paper was discussed at the ILO Informal Ministerial Meeting (Geneva, 6 June 2006).