To what extent have policies aimed at enhancing flexibility been Essay

To what extent have policies aimed at enhancing flexibility been successful in reducing unemployment in Europe since the early 1990s - Essay Example um wages and policies of the labor market to empower employees, discouraging the employers from flexible working practices that could boost employment. It also affected the rates of tax, thereby making it difficult for employers to absorb more employees in from the labor market (Brodsky 1994 p. 68) The policy on minimum wages does not help employers in hiring more workers, especially the unskilled entry level graduates. It is believed that the rate of unemployment in Europe has steadily increased from 1970 to a high of more than 8% of the labor force in 2002. From 1990 and 1993, unemployment increased by 2.3%. This is an indicator of failure of labor market policies to enhance employment creation. It is mainly attributed to their rigidity. In order to solve this problem, â€Å"the OECD recommended an improvement in labor market flexibilities† (Brodsky 1994 p. 60) which include; non-wage labor cost reductions, enhancement of income re-distribution through re-assessment of the role of statutory minimum wages, job security provisions reforms and reforms in the benefits related to unemployment. These were the major policy drivers in Europe employed to reduce unemployment. Research indicates that the benefits associated with unemployment are highest in the European Union. More over, they are known to be prolonged and easily accessible to the population of the unemployed in the labor market. This is one factor that is seen to maintain the high unemployment rates. This provides evidence of lack of enough labor market flexibility that could enhance employment. It is what Nickell (1998) describes as â€Å"generous replacement rates† which have maintained the high unemployment patterns in European Countries. Even though there have been several draw backs in the efforts to reduce unemployment, the active labor market policies have served as a major tool for the government to increase the capability and motivation towards taking up the available jobs, including part time jobs.