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Three Perspectives on the Dutch Growth of Flexible Employment

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Abstract

The growth in flexible work arrangements has been more pronounced in the Netherlands than in most other western economies. Own account work, fixed-term contracts and contracts with variable hours all have become more prevalent since the early 2000’s. This paper describes the growth of flexible work arrangements from three perspectives. The institutional perspective reveals that the Dutch institutions provide incentives and possibilities for employers to circumvent institution-based risks and costs, and for workers to avoid taxes and social security contributions. The individual perspective shows that most workers nevertheless prefer an open-ended employment contract, which some groups manage to obtain more often than others. Over the life cycle the share of flexible employment contracts decreases among all cohorts and all social groups, but more so among the higher educated and men. Own account work, which is mostly a positive choice, increases over the life cycle. The job perspective shows that flexible work arrangements have grown in all sectors of the economy. In some sectors the increase is predominantly in own account work, in other sectors predominantly in flexible employment contracts, without a clear relation to sector characteristics.

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Fig. 1

Source: Eurostat database

Fig. 2

Source: Dutch Labour Force Survey (EBB)

Fig. 3

Source: The Dutch Working Conditions Survey (2015). All workers on a flexible employment contract were asked for the most important reason to work on a flexible employment contract. Unfortunately, this question was not asked before in the Dutch Working Conditions Survey and it is therefore not known whether the share of workers that prefers to have a flexible work arrangement has changed over the years

Fig. 4

Source: Dutch Labour Force Survey (EBB)

Fig. 5

Source: Dutch Labour Force Survey (EBB)

Fig. 6

Source: Dutch Labour Force Survey (EBB)

Fig. 7

Source: Dutch Labour Force Survey (EBB)

Fig. 8

Source: Dutch Labour Force Survey (EBB)

Fig. 9

Source: Dutch Labour Force Survey (EBB)

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Notes

  1. Workers on 0-h contracts are the least protected, but even that group has similar rights to other workers after having worked 6 months. Their benefit rights are calculated the average monthly working hours in the past 3 months. Naturally, workers need to be aware of these rights for them to be effective. It is unclear whether all workers in these types of on-call arrangements are aware of these rights.

  2. This includes on-call employment and fixed-term/open-ended contracts without a pre-specified number of hours per week. People on this last type of contract work more hours in some weeks than in other weeks.

  3. Before 2004, employers were obliged to keep of paying wages for 1 year and before 1995 it was 6 weeks maximum.

  4. If the employer has no job available for the employee within his company, he has the obligation to search for another job with another employer.

  5. If the employer cannot prove in court that these effort have been made, the worker remains on the payroll for another year.

  6. Until 2013 the employers had no responsibility at all for workers on fixed-term contracts who became sick. This was changed because an evaluation (Cuelenaere et al. 2011) had shown that a large part of the new inflow into disability schemes came from workers that we previously employed on fixed-term contracts.

  7. In practice only 25% of the own account workers is insured against disability (Berkhout and Euwals 2016) and about 50% of the own account workers has pension savings at the level of employees (Ministry of Social Affairs and Employment 2013).

  8. Under the ‘Wet Werk en Zekerheid’ (Work and Security Act) from 2015. During 1999–2014 the maximum was three contracts in a row with less than 3 months in between, and a total length of 3 years. (Flexibility and Security Act).

  9. For 5% it was none of these.

  10. When the same analyses is performed for a sample without students, de results are almost the same, with one exception: the probability to work on a flexible contract among 18-24 year olds and 25-34 year olds is 10%-point lower in each year. The major part of the age-effect therefore seems to be driven by people entering the labour market, given the low probability to transition from a flexible to an open-ended contract and the even smaller probability to obtain an open-ended contract from non-participation.

  11. The coefficients fluctuate over time and seem to follow the fluctuations in the unemployment rate.

  12. For own-account work this sharp increase is the result of two factors: first, own-account workers retire later compared to employees, and second, a part of all employees chooses to keep on working (usually for a smaller number of hours than before) as own-account worker.

  13. The reference category “Public administration” is the industry that uses least flexible work arrangements, so if the size of the coefficients increases, the difference between the shares of low using industries and high using industries increased.

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Author information

Authors and Affiliations

  1. CPB Netherlands Bureau for Economic Policy Analysis, The Hague, The Netherlands

    Jonneke Bolhaar & Bas Scheer

  2. UWV Employee Insurance Agency, Amsterdam, The Netherlands

    Marloes de Graaf-Zijl

Authors
  1. Jonneke Bolhaar
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  2. Marloes de Graaf-Zijl
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  3. Bas Scheer
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Corresponding author

Correspondence to Jonneke Bolhaar.

Appendix

Appendix

See Tables 3 and 4 and Figs. 10, 11 and 12.

Table 3 Percentage of all workers in particular subgroup with flexible employment contract and working as own account worker, 2015.
Full size table
Table 4 Linear probability model for probability that job is on temporary contract, via temp agency or on contract with variable hours, 2003 (columns 1–3) and 2015 (columns 4–6).
Full size table
Fig. 10
figure 10

Source: Dutch Labour Force Survey (EBB)

Share of all workers with particular type of flexible employment contract, by age and birth cohort. Separately for (from left to right and from top to bottom): fixed-term contract, open-ended upon good performance; fixed-term contract, duration < 1 year; fixed-term contract, duration > 1 year; on-call contract; temp agency work; contract without prespecified number of hours.

Full size image
Fig. 11
figure 11

Source: Dutch Labour Force Survey (EBB)

Share of all workers with flexible employment contract, by age and birth cohort. Separately for males (left) and females (right).

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Fig. 12
figure 12

Source: Dutch Labour Force Survey (EBB)

Share of all workers working as own-account worker, by age and birth cohort. Separately for males (left) and females (right).

Full size image

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Bolhaar, J., de Graaf-Zijl, M. & Scheer, B. Three Perspectives on the Dutch Growth of Flexible Employment. De Economist 166, 403–432 (2018). https://doi.org/10.1007/s10645-018-9328-9

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  • DOI: https://doi.org/10.1007/s10645-018-9328-9

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