There is no clear evidence that the strong growth in the share of flexible labor relations between 2002 and 2007 points at a worldwide trend towards a larger share of flexible labor at the expense of traditional open-ended labor contracts. The growth in flexible labor varies too much between countries and periods to draw such a conclusion. In most countries in Europe, in North America and Japan, the share of flexible labor has declined during the recent economic recession that started after 2007.
There is also no structural trade-off between different forms of (formal) flexible labor. Observations in Europe suggest that growth or decline of different types of flexible labor can be attributed to changes in both local societal and economic structures and in institutions and legislation. Growth of flexible labor appears mainly in countries where the labor participation is increasing while it is declining where labor participation is relatively low or stagnating. This suggests an important role for flexible labor for new non-traditional labor market participants to enter the labor market.
At the same time, there is a strong correlation between the share of flexible labor and economic growth, particularly with respect to fixed-term contracts and agency work. Flexible labor is the first form of employment effected by a decline in labor demand in an economic crisis, particularly when flexible workers are younger and lower educated. But at the same time, flexible work will be the first type of employment that recovers when the economy stabilizes after a crisis. The opportunity to offer flexible work may even accelerate economic growth. Therefore, a further growth in flexible work can be expected once the economies in most western countries start to grow significantly again. Agency work in particular has grown in nearly all markets over the last decade, which does indicate a structural component of growth of agency work in the modern labor market apart from the business cycle.
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