Page 71 - IJPS-11-5

International Journal of
Population Studies Atypical workers and COVID-19

should be reassessed to ensure that they balance the need workforce flexibility with job security, benefiting both
for workforce flexibility and employees’ job security. The employers and employees.
Danish model of “flexicurity” offers valuable insights into One of the key insights from the firm size estimates
achieving this balance. Kreiner & Svarer (2022) illustrated pertains to the adjustment strategies implemented in
that Denmark’s success in combining flexible labor market response to the COVID-19 crisis. The variable “Has this
policies with high-income security is underpinned by its establishment adapted its production or services due to
comprehensive active labor market programs (ALMPs). COVID-19?” shows a significant positive correlation with
ALMPs mitigate adverse selection and moral hazard both dependent variables, indicating changes in the levels
issues associated with generous unemployment benefits. of temporary employment at the firm level, whether an
Their model demonstrated that flexible hiring and firing increase or decrease, during the pandemic. This result
rules are crucial; however, they must be complemented by confirms the Schumpeterian hypothesis of “destructive
robust active labor market policies to be effective. creation” insofar as in every crisis, there is “The
For small firms, policy measures could focus on dismantling of businesses, wealth, products, and careers,
alleviating the constraints that lead them to depend on along with the rise of innovative business models and
temporary employment, such as providing incentives evolving job demands, represents the cost of advancement.
to encourage the creation of more permanent positions. Joseph Schumpeter referred to this process as “creative
Conversely, for medium- and large-sized firms, policies destruction” (Iqbal, 2015).
to enhance job security for temporary workers could help Regarding the government subsidies introduced to
mitigate the adverse effects of the decline in temporary alleviate the impact of the COVID-19 health crisis on
employment. Davoine (2023) underscored that the Danish businesses, they did not help sustain temporary jobs at
flexicurity model balances low employment protection with their pre-crisis levels. The impact of the pandemic crisis
generous unemployment insurance and ALMPs, providing on businesses is undeniable, as it has led to a significant
a framework for supporting workers in transitions and increase in costs while limiting the availability of resources.
mitigating unemployment risks. Their model suggests that When the survival period of businesses is very short, rapid
enhancing job security for temporary workers, particularly government intervention is vital to mitigate the adverse
in medium- and large-sized firms, could be beneficial. effects of the economic shock and improve their resilience
The emphasis on comprehensive activation programs and performance (Ndiaye et al., 2018). Moreover, the
and education within the Danish model highlights the literature emphasizes the importance of government
potential for policies that improve job stability and support support for the performance and resilience of businesses;
transitions, aligning with the need for measures that however, this support is especially crucial during times of
address temporary employment in larger firms. crisis (Sheng et al., 2011; Wei & Liu, 2015). Nonetheless,
Burchardt (2019) provided a historical context by it is challenging to isolate the effects of government
explaining that the Danish model’s success is built on a support on businesses during periods of general economic
century of balancing employer and employee interests adversity. Some studies have used simulations to address
through collective agreements and a strong welfare this difficulty. For example, a study by the OECD (2020b)
state. This balance, achieved through negotiation and on a sample of European businesses compared the
societal consensus, indicates that policies must adapt to proportion of businesses that would become illiquid in
economic conditions while protecting workers’ rights. the absence or presence of government support measures.
For medium- and large-sized firms, integrating job The results show that 20% of businesses would be declared
security measures for temporary workers within this illiquid without support measures after just 1 month, 30%
framework could help manage the impacts of reduced after 2 months, and 38% after 3 months. In contrast, with
temporary employment and align with broader labor support measures, the proportion of businesses facing
market policies. bankruptcy could be reduced from 30% to 10% after
These studies highlight the importance of tailoring 2 months of lockdown.
policies to different firm sizes, drawing on the Danish Another study conducted by Gourinchas et al. (2020)
model’s principles. By offering incentives for small firms measured the impact of the COVID-19 crisis on business
to create permanent jobs and enhancing job security shutdowns in 17 countries. The results revealed that the
for temporary workers in larger firms, policymakers proportion of businesses facing bankruptcy after 1 year
can address employment challenges more effectively. without liquidity injection or government support was
Incorporating comprehensive support measures and 12.1% on average, compared to 4.5% before the COVID-19
adapting to economic conditions will help balance pandemic. In Morocco, a survey conducted by the High

Volume 11 Issue 5 (2025) 65 https://doi.org/10.36922/ijps.3575