Economic and Labour Market Analysis Department (EMP/ELM)

In a globalized world, where competition has intensified, labour markets work best when there is an institutional environment that allows adjustment flexibility for firms while ensuring income, social and employability protection for workers. While one notices –in the developed world- the maintenance of employment protection rights and therefore also employment stability at the core of the employment system, a certain shift towards more flexible forms of employment and from employment protection at the company level towards social protection on a more collective level is noticeable. In fact there seem to be trade-offs between employment and social protection and this calls for an extended bargaining agenda of the social partners including employment protection and labour market policies.

These results imply that developing countries –operating very often in unstable environments that impair development- have to find ways to stabilize and gradually formalise, rather than to flexibilize, destabilise and informalize their labour markets further in order to climb higher up the development ladder. Labour market stabilization –that fulfils productivity targets- implies the introduction of labour standards and labour market institutions. Without such an institutional support, productive and more stable and secure employment relationship for many would historically not have been possible in developed countries. It is the embeddedness of private and public sector employment in a network of labour market institutions such as unemployment benefit, re-employment services and training schemes, which is a condition for the management of change as stipulated in the global employment agenda. This institutional embeddedness of employment is also a condition for decent work that can hardly be created by the private sector without the support of labour market institutions.

For the transition countries of central and eastern Europe a general conclusion would be that there is now a need for finding a new balance between labour market flexibility and job stability and security, through much higher investment in human resources and the use of functional flexibility (internal adjustment) rather than numerical flexibility (external adjustment) in enterprises. Also, institutional assistance and labour market policy need to be much strengthened in order to help people (jobseekers and workers threatened by unemployment) improve their employability and find new decent jobs or create their own business as quickly as possible.

The analytical work on these labour market items in OECD and transition countries will continue. The terms of the trade-off and its policy implications have to be assessed, especially for advising the ILO constituents. However, much more attention will be given to the analysis of the formal and informal labour market in developing/emerging countries. Specifically, the applicability of labour market policies with the double aim of flexibility/security to underpin the management of change will be tested in several countries. This will be in line with the global employment agenda. A few case studies will concentrate in this biennium on developing and emerging countries such as Turkey, China, Egypt, Namibia and Mexico.

What's new

  1. Workshop

    Boosting economic dynamics and job growth: the potential of industrial policies, Geneva

    4-5 March 2013

  2. Workshop

    Research Workshop: Employment Quality in Segmented Labour Markets

    10 - 11 December 2012

  3. Inventory Report

    Inventory of Policy Responses to the Financial and Economic Crisis

    The International Labour Organization and the World Bank released a new online data tool and a joint report with the first comprehensive stocktaking of countries’ jobs-related policy responses to the recent global financial and economic crisis, covering 55 low-income and middle-income and 22 high-income countries.



     22 May, 2012

    In its report on the “Global Employment Trends for Youth 2012”, the ILO examines the continuing job crisis affecting young people in many parts of the world. It provides updated statistics on global and regional youth unemployment rates and presents ILO policy recommendations to curb the current trends.  

  5. Working Paper

    Diverging trends in unemployment in the United States and Europe: Evidence from Okun's law and the global financial crisis 

    (Employment Working Paper No. 106)

Key resources


    Global Employment Trends 2012: Preventing a deeper jobs crisis

     12 January 2012

    The Global Employment Trends 2012 takes stock of labour market developments and emerging challenges as the world continues to struggle to forge a sustainable recovery from the global economic and jobs crisis.


    Key Indicators of the Labour Market (KILM), Seventh Edition

    October 2011

    Published every two years since 1999, the KILM is a collection of 18 key indicators of the labour market, ranging from employment and variables relating to employment (status, sector, hours, etc.), the lack of work, the conditions of work (wages, compensation costs, working poverty, etc.) and the characteristics of jobseekers, (education, labour productivity). Taken together, the indicators give a strong foundation from which to begin addressing key questions related to productive employment and decent work.

  3. The global employment challenge

    01 May 2008

    This volume offers an in-depth analysis of the state of employment in the world today, providing a detailed and comprehensive picture of the serious challenges faced by today's policy-makers...

  4. In defence of labour market institutions. Cultivating justice in the developing world

    21 February 2008

    Though labour market regulations have been blamed for the poor economic performance of many developing countries, the evidence on which this argument rests is weak. Rather than constraining economic development, labour market institutions, including the laws that regulate the labour market, are important for both economic growth as well as the well-being of the workforce. Through a survey of different labour market institutions in developing countries, this volume reaffirms the importance of labour market institutions in this era of globalization.

  5. Flexicurity: A relevant approach in Central and Eastern Europe

    25 January 2007

    This book argues, with case studies contributed by outstanding national experts, that the flexicurity approach is the most relevant for Central and Eastern European countries and suggests appropriate reforms of economic policy, institutional framework of the labour market, labour market policy and education and social policies in this region.