Is There Less Labor Market Exclusion of People With Ill Health in “Flexicurity” Countries? Comparative Evidence From Denmark, Norway, the Netherlands, and Belgium

Abstract

Higher employment rates among vulnerable groups is an important policy goal; it is therefore vital to examine which social policies, or mix of policies, are best able to incorporate vulnerable groups – such as people with ill health – into the labor market. We examine whether 2 “flexicurity” countries, Denmark and the Netherlands, have less labor market exclusion among people with ill health compared to the neighboring countries of Norway and Belgium. We analyze the 2 country pairs of Denmark–Norway and the Netherlands–Belgium using OLS regressions and propensity score kernel matching of EU-SILC panel data (2010–2013). Both unemployment and disability likelihood is remarkably similar for people with ill health across the 4 countries, despite considerable social policy differences. There are 3 possible explanations for the observed cross-national similarity. First, different social policy combinations could lead toward the same employment outcomes for people with ill health. Second, most policy instruments are located on the supply side, and demand side reasons for the observed “employment penalty” (e.g., employer skepticism/discrimination) are often neglected. Third, it is too demanding to hold (full-time) employment for a sizeable proportion of those who have poor health status.