More Flexible Yet Less Developed? Spatio-Temporal Analysis of Labor Flexibilization and Gross Domestic Product in Crisis-Hit European Union Regions

This study conducts a spatio-temporal analysis of labor flexibilization and GDP per capita change (gross domestic product) with focus on their interrelation in European Union (EU) regions during 2008-2013. Using a composite index to calculate the dispersion of flexible contractual arrangements and spatio-temporal autocorrelation metrics, it shows that changes in overall growth largely affect the distribution of flexible working patterns across space and time. In particular, regions with high increments in the prevalence of flexible work, thus ranking highest in terms of flexibilization, suffered the most as a result of the productivity and financial crisis during the turbulent 2008-2013 period. Further, applying univariate, bivariate, and differential local Moran's I spatial autocorrelation techniques, this study demonstrates that changes in GDP pca are negatively spatially autocorrelated with flexibilization, while increasing flexibility has no significant positive effect on GDP growth. This major finding contradicts the general belief that more flexible labor environments lead a priori to economic growth, re-emphasizing previous considerations on that matter while also updating existing contributions with a more nuanced and recent account that follows a geographically sensitive methodology. Although many studies have identified that labor flexibilization is not always linked to economic growth, the current study offers recent spatio-temporal evidence that refer to almost all EU regions to complement existing works. Contextualizing these findings, this analysis highlights an increasing schism between the north-central and south-eastern EU regions, with the latter facing poor growth prospects and extensive low-road flexibilization practices. Such a schism, which often transcends national boundaries creating new patterns of sub-national unevenness, challenges the idea of a healthy trade-off between flexibilization and GDP growth and warrants urgent attention.