Labour Market Flexibility

Labour market flexibility refers to the speed with which labour markets adapt to fluctuations and changes in society, the economy or production.
The most famous distinction of labour market flexibility is given by Atkinson. He notes that there can be four types of flexibility - external numerical flexibility, Internal numerical flexibility, functional flexibility, financial or wage flexibility

However, labour market flexibility does not only refer to the strategies used by employers to adapt to their production/business cycles as defined above. It can also be used as a method to enable workers to ‘adjust working life and working hours to their own preferences and to other activities’. There has been increasing interests in trying to reconcile Work Life Balance of workers and also to reconcile employers' and employees' interest through labour market flexibility, especially through the use of working time flexibility.