flexicurity

Flexicurity is a policy model that seeks to reconcile labor market flexibility with comprehensive social protection for workers. It aims to enable firms to adjust quickly to economic changes while ensuring workers have income security and opportunities for mobility through training and active job-search support. The term gained popularity in the 1990s in Denmark and across Europe as a framework for reform.

The model rests on four interrelated pillars: flexible but secure employment relations; robust social security and income support; active labor market policies that promote retraining and job placement; and strong social dialogue among government, employers, and unions to design and implement reforms.

In practice, flexicurity often involves easier hiring and firing rules with safeguards such as severance pay or unemployment benefits, accompanied by generous reemployment services, wage subsidies, and access to lifelong learning. Denmark is frequently cited as a leading example, though variances exist among European countries.

Supporters argue flexicurity boosts competitiveness and reduces long-term unemployment by smoothing transitions. Critics warn that high benefit generosity can raise costs, disincentivize work for some groups, or rely on stable institutions that may be weak in other contexts. The model requires sustainable funding and effective ALMP.

Beyond national policy design, flexicurity informs European labor market strategy by emphasising activation, skills development, and negotiation frameworks that balance flexibility with security.