Young peoples’ relationship with the labour market: the Republic of Moldova vs. the European Union

The young people’s problem on the labour market in Moldova and the EU. Analysis of the benefits of education, using indicators: the marginal increase in individual wages due to an increase in the duration of schooling; reduction of the unemployment rate.

Рубрика Экономика и экономическая теория
Вид статья
Язык английский
Дата добавления 14.08.2022
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Young peoples' relationship with the labour market: the Republic of Moldova vs. the European Union

A.P. Birca, Doctor habilitatum in Economics, Professor, Dean of the Faculty of Economics and Law; A.I. Mamaliga, University Lecturer, Department of Modern Business Languages, Academy of Economic Studies of Moldova (University)

This scientific work tackles the young people's problem on the labour market in the Republic of Moldova and the European Union. Young people represent that category of the labour force that has the most difficulties in entering the labour market. Due to the demands, sometimes exaggerated by the employers, the period of transition from school to the professional life of young people can last a longer time period which can lead to discouraging young people. However, the employment rate of young people is the lowest in relation to the other age categories of the employed population. At the same time, the youth unemployment rate is higher compared to other age categories. Under these circumstances, it is compulsory to develop policies to support young people that would aim to reduce unemployment among them and increase the employment rate.

Key words: labour market, youth, labour force, employment rate, unemployment rate, employment forms, European Union.

Взаимоотношения молодых людей с рынком труда: Республика Молдова против Европейского Союза

А.П. Бирча, доктор экономических наук, профессор, декан факультета экономики и права; А.И. Мамалига, преподаватель кафедры современных деловых языков, Экономическая академия Молдовы (Университет)

Статья посвящена проблеме молодежного рынка труда в Республике Молдова и Европейском Союзе. Молодые люди представляют ту категорию рабочей силы, которая испытывает наибольшие трудности при выходе на рынок труда. Из-за требований работодателей, которые иногда являются завышенными, переход от школы к профессиональной жизни молодых людей может быть длительным и привести к их разочарованию. Уровень занятости молодежи в Республике Молдова является самым низким, а уровень безработицы - самым высоким по сравнению с другими возрастными категориями занятого населения. В этих условиях необходимо разработать политику поддержки молодых людей, которая будет направлена на сокращение безработицы и повышение уровня занятости.

Ключевые слова: рынок труда, молодежь, рабочая сила, уровень занятости, уровень безработицы, формы занятости, Европейский Союз.

Взаємовідносини молодих людей з ринком праці: Молдова проти Європейського Союзу

А.П. Бірча, доктор економічних наук, професор, декан факультету економіки та права; А.I. Maмaліга, викладач кафедри сучасних ділових мов, Економічна академія Молдови (Університет

Постановка проблеми. Молодь - це теперішнє і майбутнє будь-якої країни, а також цінне джерело розвитку суспільства. Водночас молоде населення становить категорію робочої сили, яка стикається з найбільшими труднощами при виході на ринок праці. Молодіжне безробіття є тривалим, у молоді менш привабливі зарплати, тому більше спокус мігрувати за кордон з надією знайти роботу тощо.

Аналіз останніх досліджень і публікацій. Проблема зайнятості молоді на ринку праці відображена у працях як закордонних авторів, так і з Республіки Молдова. Науковий внесок у цю проблему здійснили: Дж. Хілладж (J. Hillage), П. Джаннеке (P. Janneke), А. Бірча (A. Bircд), В. Гарбуз (V. Garbuz), І. Бостан (I. Bostan), В. Фрун- зару (V. Frunzaru), Р. Пен (R. Penn), Е. Віброк (E. Viebrock), Дж. Лешке (J. Leschke), Н. О'Гіггінс (N. O'Higgins) та ін.

На особливу увагу заслуговує думка Я. Фігеля (Jan Figel) щодо того, що в цифровому суспільстві необхідні нові ключові компетенції не лише для набуття професійних, технічних навичок, а й для глибшого розуміння можливостей, викликів і навіть ставлення до деяких етичних проблем, породжених новими технологіями. А також дослідження Н. О'Гіггінс (N. O'Higgins), які присвячені факторам впливу на ринок праці молоді.

Формулювання цілей. Мета статті - у порівняльний спосіб проаналізувати основні показники ринку праці молоді віком від 15 до 24 років у Республіці Молдова і в країнах - членах ЄС.

Виклад основного матеріалу. У статті досліджується вплив на поведінку молоді на ринку праці кількох чинників:

по-перше, нетрадиційних форм зайнятості. Міжнародна організація праці виокремлює такі категорії нетрадиційних форм зайнятості: тимчасова зайнятість; зайнятість на неповний робочий час; договірні відносини; замаскована зайнятість; залежна самозайнятість;

по-друге, міжнародної міграції робочої сили, включаючи молодь. Мобільність людей та відсутність привабливих пропозицій роботи після закінчення навчання в школі живлять потоки трудової міграції, що призводить до зменшення вступу працівників на національний ринок праці - кількісно і, особливо, якісно;

по-третє, технологічного прогресу, демографічної еволюції та економічної глобалізації, які реструктурують попит і пропозицію робочої сили, а також впливають на зміну способу праці людей. А це вже має прямі наслідки для системи освіти.

Сучасний працівник повинен мати високу кваліфікацію та сформовані професійні навички, аби залишатися конкурентоспроможним у суспільстві, заснованому на знаннях. Тому європейські працівники найближчими роками щорічно навчатимуться за різними навчальними програмами для задоволення потреб ринку праці. Навчання протягом усього життя для працевлаштування позитивно впливає на суспільство, дає значні суспільні вигоди. У статті детально досліджується вплив освіти на ринок праці з економічної, соціальної та міжнародної точок зору. Автори ставлять питання про адаптацію навчального процесу до місцевих, національних потреб та створення привабливих професійних умов і добре оплачуваних робочих місць із метою стабілізації робочої сили. На думку авторів, інвестиції в освіту приносять прибуток національній економічній системі, генеруючи ресурси для нинішніх і майбутніх поколінь.

У статті аналізуються переваги освіти на ринку праці, які можна виміряти за допомогою таких показників, як: граничне підвищення індивідуальної зарплати за рахунок збільшення середньої тривалості навчання в школі; зниження рівня безробіття. За статистичними даними, чим вищим є рівень освіти, тим нижчими будуть рівень безробіття і соціальні витрати.

Очевидно, що рівень зайнятості зростає із досягненням рівня освіти. Цей висновок ілюструється статистичними і фактичними даними. Автори здійснили порівняльний аналіз ситуації на молодіжному ринку праці вікової категорії 15-24 років в Республіці Молдова і в Європейському Союзі.

Висновки. Молодь є майбутнім нашого суспільства, і тому будь-яка країна повинна мати спеціальну політику молодіжної зайнятості та відповідну програму дій. Ураховуючи той факт, що молоді люди віком від 15 до 24 років мають більше труднощів у процесі працевлаштування, відповідальність за зайнятість повинна покладатися не лише на державні установи, а й на освітні, які завдяки якості навчання та досліджень мають забезпечити молодим людям швидший перехід до професійного життя.

Коротка анотація до статті

Статтю присвячено проблемі молодіжного ринку праці в Республіці Молдова і Європейському Союзі. Молоді люди становлять ту категорію робочої сили, яка зазнає найбільших труднощів при виході на ринок праці. Через вимоги роботодавців, які іноді є завищеними, час переходу від школи до професійного життя молодих людей може бути тривалим і призвести до їх розчарування. Рівень зайнятості молоді в Республіці Молдова є найнижчим, а рівень безробіття - найвищим порівняно з іншими віковими категоріями зайнятого населення. За цих умов необхідно розробити політику підтримки молодих людей, яка буде спрямована на скорочення безробіття і підвищення рівня зайнятості.

Ключові слова: ринок праці, молодь, робоча сила, рівень зайнятості, рівень безробіття, форми зайнятості, Європейський Союз.

Problem conceptualization

Young people are the present and future of any country, as well as a valuable driving source within a society. The rapid integration of graduates into the labour market and lifelong learning are key elements in ensuring a smooth transition to new jobs, specific to the knowledge economy that results in higher added value for companies, as well as avoiding long-term unemployment which leads to the loss of human capital.

At the same time, we must be aware that young people represent that segment of the population that must be continuously supported, especially in the process of transition from school to the working place. Namely for this reason, the young population has always been a major concern for most countries, expressed through different policies promoted at national level.

The young population represents the labour force category that is facing the most difficulties in entering the labour market. The lack of prospects for a decent job when entering the labour market has an impact on their course in the labour market. In addition, youth unemployment exibits certain vulnerabilities caused by: variations in economic activity, less attractive salaries for young people, difficulty in creating new jobs for young people, longer duration of the unemployment period, faster entry into the informal labour market, greater temptations to migrate abroad in the hope of finding a job, etc.

Recent research and publication analysis

The age criteria of the notion of «young people» are treated differently. Thus, in 1985, the United Nations officially declared that young people include people between the ages of 15 and 24. The European Parliament and the Council of Europe have determined the age criterion of young people being between 15 and 25 years old. In the Republic of Moldova, according to the Youth Law no. 279-XIV of January 11, 1999, young people are considered those to be aged between 16 and 30. The National Bureau of Statistics from the Republic of Moldova determines and analyses two criteria of the young people's age: 15-24 and 15-29 years old.

The employment problem of young people in the labour market is reflected in the works of several authors both from abroad and from the Republic of Moldova. Thus, contributions to the concerned problem have been made by: Janneke (2013), Birca (2015), Garbuz (2015), Bostan (2010), Frunzaru (2009), Penn (1994), Viebrock (2009) , Leschke (2010), O'Higgins (2017) etc.

Living in a digital society, new key competences are needed, not only to acquire professional, technical skills, but also for a deeper understanding of the opportunities, challenges and even the attitude towards some ethical problems generated by the new technologies (Figel, 2007).

It should also be noted that the professional insertion of a graduates can be influenced by the school where they studied, the field of study, the economic environment in the region, the companies where they completed internships or worked during the studies, recruitment companies where they held interviews, conferences and trainings in which they participated, etc.

As the globalization process has been increasing, new changes have also occurred in terms of labour force, especially the young one. Thus, O'Higgins (2017) mentions that, under the globalization condition, the young people's prospect of employment in one and the same job (employer) have disappeared. This is due, first of all, to the alternatives and the new opportunities that young people have, including that of carrying on their professional activity abroad.

Formulation of aims. The objective of this article is to analyse, in a comparative way, the main indicators of the labour market with reference to the young people between the ages of 15 and 24, both from the Republic of Moldova and from the EU member states, considered to be the most vulnerable category of the work force.

The presentation of the main material

The concern for the increase of the employment level of young people by government institutions has led to the emergence of non-traditional forms of employment. Thus, the International Labour Organization classifies non-traditional forms of employment into four categories:

- temporary employment - implies employment for a certain period of time when young people are involved in different projects, or in seasonal activities, or in occasional activities, including daily ones;

- part-time employment - envisages hiring a person for a reduced number of hours compared to the that established according to the legislation in force. This allows young people to carry out a professional activity, in a legal framework, concurrently with the studies they carry out. This form of employment has a double advantage both for young people and employers. By the help of this form of employment, besides studies, young people can also receive an income necessary for making a living. Employers, in turn, can offer those jobs with a particular work schedule (in the evening, at night, at the weekend), jobs that are less enjoyed by the other age groups, especially those who already have a family, and family obligations prevent them from doing these jobs;

- contractual relationships which include several parties - young people are not directly employed by the company for which they provide employment services, but through a leasing company;

- disguised employment - this form of employment is related to an aspect different from the reality, having the intention to cancel or diminish the protection provided by law and, at the same time, not to disclose the employer's identity;

- dependent self-employment - young people provide business services, and their income depends on one or more clients.

The behaviour of young people in the labour market is also influenced by the international migration of the labour force, including the international migration of young people. As regards the international migration of young people, we can identify several categories:

- young people who go to study abroad, include both young people who have obtained a scholarship from the host country, as well as young people admitted to different universities abroad;

- young people who went to work abroad;

- young people who have emigrated to live permanently in the host country.

The mobility of people and the lack of attractive job offers after graduation feed the flows of labour migration, leading to the size compression of the entry into the labour market - both quantitatively, but especially qualitatively.

Also, when it comes to the prospects of employing young people, several aspects are to be considered. According to Karoly and Panis (2004), technological progress, demographic evolution and economic globalization will obviously influence the labour market in the coming years. In the authors' opinion, they will restructure the demand and the supply of the labour force, as well as the influence on changing the way people will work, having direct consequences on the education system.

The need for professional skills and qualifications that European workers will have to possess in order to stay competitive in a knowledge-based society is expected to increase from year to year. Therefore, European workers will be trained annually in different training programs to meet the needs for professional skills and qualifications in the labour market.

Thus, lifelong learning for employment needs generates a positive impact on society, producing greater benefits than individual gains. From an economic point of view, the impact of education on the labour market can be expressed by the following: it increases the working performance, increases the capacity to generate and use technological and non-technological progress, the economic environment becomes more creative, the dynamics of renewing the supply of goods and services increases as well as their variety and quality, etc. The workforce, especially young graduates are flexible to change, even generating it and are more inventive in finding new solutions, methods, tools, procedures to achieve the general objective of any business/activity - meeting a need. From a social point of view, the impact of education on the labour market is expressed by the following: it increases the chances of employment, ensures equal opportunities, restricts and even prevents discrimination promotion of any kind for employment and participation in the life of the society. The increased opportunity for employment reduces/eliminates the threat of poverty and can be viewed as a factor of human well-being and development and a tool for changing culture, including working culture. From an international point of view, the acquisition of key knowledge and skills, common at European level and the technological development on the one hand, the Bologna process, the Lisbon Agenda and the construction of the European Research Area on the other, have led to collaboration and acceptance of multiculturalism. The aforementioned effects are bringing significant non-material benefits, are developing a new culture of learning and active life, to a certain extent, are preparing the labour force for a globalised, competitive economy and «intensive demand training» and are generating skills specific to the knowledge economy.

Also, adapting the learning process to the local, national needs and creating attractive professional and well-paid jobs leads to the stabilisation of the workforce through opportunities for professional performance, career development and financial comfort needed at the beginning of the life path - establishing a family, purchasing movable goods and real estate, financing cultural and entertainment consumption, etc. Investment in education brings returns to the national economic system, generating resources for a better financing of lifelong learning for present and future generations;

The benefits of education on the labour market can be measured by impact indicators such as:

- marginal increase of the individual salary due to the increase in the average duration of schooling. Recent research has shown that throughout Europe, an additional year of schooling increases the level of individual pay by about 6.5% and by up to 9% in countries with less rigid salary structures. Due to a close positive connection, between education and the salary system, high school education is a threshold from which any additional education gains a certain special reward (OECD, 2002);

- reducing unemployment. According to statistical data, the higher the level of education, the lower the unemployment rate is, thus reducing the social costs involved. It is obvious that the employment rate increases with the level of education reached.

Starting from the aforementioned, young people must decide on the choice of their professional career and its path, taking into account the changes which occur in the labour market, but also the prospect of actively participating in it. Taking into account the fact that young people aged 15-24 are considered the most vulnerable in the labour market, because during this period of their lifetime the transition from school to the labour market takes place. We have made a comparative analysis of the situation showing the young people in the labour market of this age category both in the Republic of Moldova and in the European Union. To begin with, we have analysed the employment rate of young people aged 15-24 (Figure 1).

Analysing the information in Figure 1, in the period of 2010-2018, we can notice that in most EU Member States the employment rate among people aged 15-24 increased, except for Austria, Bulgaria, Denmark, Greece, Italy, Portugal and Spain. In 2018, the employment rate among young people aged 15-24 was almost two times higher than that registered in the Republic of Moldova. Even though in such states as Austria or Denmark, the employment rate among young people aged 15-24 has decreased, during the analysed period, it remains at a level higher than that registered in the European Union, which was 35.4% in 2018. At the same time, it should be mentioned that the reduction in the employment rate among young people aged 15-24 in such countries as Italy, Greece and Spain was caused by the economic crisis which has lasted for a long time, and the economy of these countries has not managed to fully recover. In 2010, the Republic of Moldova recorded the lowest employment rate among young people aged 15-24 as compared to EU member states.

Fig.1. The employment rate of young peopleaged15-24 in the Republic of Moldova and the European Union member states from 2010-2018, %

During the analysed period, the most spectacular increases in the employment rate among young people aged 15-24 were recorded in: Estonia (from 25.7% to 41.7%), Lithuania (from 18.3 to 32.5%), Sweden (from 39.7% to 47.1%), and Hungary (from 18.2% to 29.0%). Even though, during the analysed period, the Republic of Moldova registered a small increase in the employment rate among young people aged 15-24 years, it managed to exceed only that of Greece, which in 2018 was only 13.5%. At the same time, it should be noted that in 2018 the employment rate among people aged 15-24 from countries such as Austria, Denmark, Finland, Germany, Malta, UK, Holland and Sweden by far exceeded the employment rate for all age categories in the Republic of Moldova which was only 42%.

Employees make up the largest share of the total employed population, regardless of age category. The analyses which have been carried out show that the status of an employee also has priority in the case of young people aged 15-24 years (Table 1).

Table 1. The share of employees in the total employed population aged 15-24 in the Republic of Moldova and the European Union between 2010-2018

Countries

2010

2018

Employed population

Total number of employees

Share of employees in the total employed population

Employed population

Total number of employees

Share of employees in the total employed population

1.

EU - 28

19, 693.1

18, 342.4

93,1

19, 058.5

17, 995.5

94,4

2.

Austria

519.3

498.3

96,0

480.7

468.8

97,5

3.

Belgium

331.8

315.9

95,2

322.0

303.3

94,2

4.

Bulgaria

219.1

204.8

93,5

130.3

123.6

94,9

5.

Czech Republic

326.9

296.0

90,5

277.0

256.6

92,6

6.

Cyprus

35.2

32. 6

92,6

30.2

28.9

95,7

7.

Croatia

123.4

110.9

89,9

116.6

112.0

96,1

8.

Denmark

391.4

385,4

98,5

415,3

408,2

98,3

9.

Estonia

45,0

43.8

97,3

52.2

50.3

96,4

10.

Finland

249.0

238.0

95,6

265.1

254.3

95,9

11.

France

2, 233.7

2, 180.7

97,6

2, 273.8

2, 218.3

97,6

12.

Germany

4, 050.0

3, 984.5

98,4

3, 972.2

3, 912.1

98,5

13.

Greece

237.5

180.5

76,0

145.8

118.4

81,2

14.

Ireland

235.9

226.2

95,9

244.1

237.3

97,2

15.

Italy

1, 211.3

1, 039.2

85,8

1, 036.5

925.0

89,2

16.

Latvia

74.9

70.9

94,6

57.4

53.2

92,7

17.

Lithuania

83.9

79.8

95,1

98.3

93.4

95,0

18.

Luxemburg

12.1

11.5

95,0

19.8

17.8

89,9

19.

Malta

24.8

23.7

95,1

26.6

25.8

97,0

20.

Great Britain

3, 651.9

3, 451.9

94,5

3, 753.2

3, 540.4

94,3

21.

the Netherlands

1, 217.9

1, 163.7

95,5

1, 343.1

1, 279.6

95,3

22.

Poland

1, 328.1

1, 155.6

87,0

1, 135.2

1, 025.4

90,3

23.

Portugal

323.0

307.1

95,1

296.4

280.6

94,7

24.

Romania

609.5

328.5

53,9

520.2

319.9

61,5

25.

Slovakia

163.8

143.9

87,8

161.4

147.7

91,5

26.

Slovenia

81.7

68.6

84,0

68.3

63.0

92,2

27.

Spain

1, 210.5

1, 122.9

92,8

989.3

931.9

94,2

28.

Sweden

483.5

469.2

97,0

523.0

510.8

97,7

29.

Hungary

218.0

208.2

95,5

297.2

288.9

97,2

30

Republic of Moldova

117.8

85.9

72,9

85.1

54.2

63,7

As Table 1 shows, the young population aged 15-24 at European Union level decreased by almost 700 thousand people, from 19, 693.1 thousand people in 2010 to 19, 058.5 thousand people in 2018, respectively and the number of employees in this age category decreased by almost 350 thousand people. Although the number of employees aged 15-24 years decreased, during the analysed period, their share in the total population employed at the level of the European Union increased from 93.1 % to 94.4%. In more than 50% of the EU member states, the share of employees in the total employed population aged 15-24 was over 95% in 2010. Of all EU.

Another important indicator that characterises the labor market is the unemployment rate. Figure 2 shows the evolution of the unemployment rate in the EU member states and the Republic of Moldova in 2010-2018.

Analysing the data in Figure 2, we can see the impact of the economic crisis on the evolution of unemployment, especially on the young people aged 15-24 who were most affected by this phenomenon. If in 2010 the unemployment rate in the European Union was 20.8%, then in 2018 it fell to 14.6%. Although, in most EU member states, the unemployment rate among young people aged 15-24 decreased in the analysed period, in some countries it increased. Thus, in Greece it increased from 33.9% to 39.5% and Italy - from 28.2% to 32.3%. This shows that the above mantionded countries were most affected by the economic crisis from 2008 whose consequences are still being felt today. Although, the unemployment rate in Spain fell during that period, it remained quite high - over 34% in 2018. At the same time, the unemployment rate among people aged 15-24 decreased considerably in some EU member states, such as: Bulgaria, Croatia, Ireland, Lithuania, Latvia, Poland, Slovakia and Sweden.

Fig. 2. Unemployment rate among young people aged 15-24intheRepublic of Moldova and the European Union member states between 2010 and 2018, %

We have also found that the unemployment rate among young people aged 15-24 in the Republic of Moldova remained at a relatively low level during the analysed period, compared to the EU member states. A lower unemployment rate for this age group was recorded in Germany and the Netherlands. In EU member states - Denmark, Austria, Germany and the Netherlands, where the unemployment rate among young people aged 15-24 is relatively low, the employment rate is higher than in the other countries. In the Republic of Moldova, the situation is reversed: both the unemployment rate and the employment rate are kept at rather low levels.

Conclusions

Young people represent the future of our society and therefore any country must be concerned about the development of policies and actions that would offer them greater opportunities. Taking into account the fact that young people aged 15-24 have more difficulties in the process of transition from school to employment, this responsibility must rely not only on the government institutions, but also on the educational ones that through the quality of the studies offered to young people will ensure a faster transition to the labor market.

The vulnerability of young people aged 15-24 on the labor market is also determined by the unemployment rate among them which is more than two times higher than the unemployment rate for all age groups registered in the Republic of Moldova in 2018. In some EU member states, the unemployment rate among young people aged 15-24 is still at a rather high level, which has been generating even greater problems for this category of the population in the hope of finding a job.

labour market education unemployment

References

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2. Birca A., Mamaliga A. (2016). The employment levels in the European Union and in the Republic of Moldova: a comparative analysis. CES Working Papers Series, Vol. VIII, Iss. 4, 598-610.

3. Blau H., Hofmann H., Meyerle W., Mьnz S., Vogler-Ludwig K. (1997). Labour Market Studies: Germany. Luxembourg: Office for Official Publications of the European Communities.

4. Bostan I., Grosu V. (2010). The social effects of the current economic crisis on the European Union labour market. Revista de Cercetare si Interventie Sociala - Journal of Social Research and Intervention, 31, 7-21.

5. Cace S. (2006). Politici de ocupare in Europa Centrala si de Est [Employmentpolicies in Central and Eastern Europe]. Bucuresti: Expert [in Romanian].

6. Clancy G. (2007). The Labour Market and the Economy. Economic and Labour Market Review, 3 (2), 17-20.

7. Figel Y. (2005). Europe needs modernise universities, says European Commission. Bruxelles: Communique de Presse.

8. Figel Y. (2007). Key competences for lifelong learning. European reference framework. Luxembourg: Office for Official Publications of the European Communities.

9. Frunzaru V. (2009). Ocuparea fortei de munca [Employment]. Politici europene - European politician. Bucuresti: Tritonic [in Romanian].

10. Garbuz V., Bercu A.-M. (2015). The labour and economic competitiveness of Republic of Moldova in the European context. CES Working papers, Vol. 7, Iss. 2a, 464-471.

11. Janneke P. (2013, October). Youth Employment in Developing Countries. Background paper prepared under service contract DCI-EDU/2012310-255. Institute for the Study of Labor, European Commission.

12. Karoly L.A., Panis C. (2004). The 21st Century at Work. Forces Shaping the Future Workforce and Workplace in the United States.

13. Leschke J., Watt A. (2010). How do institutions affect the labour market adjustment to the economic crisis in different EU countries? ETUI Working Paper (4.) Brussels: ETUI.

14. OECD (2002). Education at a glance.

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17. Viebrock E., Clasen J. (2009). Flexicurity and welfare reform: A review. SocioEconomic Review, 7, 305-331.

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