Varieties of Labour Market Institutions: Flexibility, Social Protection, and The Limits of Neoliberal Orthodoxy

OpenAlex İngilizce

It has been observed that different types of capitalism generate different outcomes in terms of labour market performance. In this context, it is often emphasized that Liberal Market Economies perform better in labour markets compared to Coordinated Market Economies, a performance often attributed to the weaker institutional regulations in LMEs. However, over time, the validity of this claim has begun to decline. Countries with rigid labour markets, characterized by more extensive institutional regulations, have demonstrated positive developments in labour market performance. In this regard, the study seeks to answer the following question: Do flexible labour markets yield better outcomes than rigid and regulated labour markets in terms of labour market performance? To this end, the labour market institutions of 25 countries were examined, taking into account the literature on Varieties of Capitalism. The findings obtained through descriptive statistics indicate that there is pressure toward labour market flexibility. Nevertheless, it has also been observed that different models and institutional structures continue to exist, and these structures have achieved successful outcomes in the context of labour markets.