This is simply the wrong question to ask about the labor market. Of course if you make welfare payments low enough and employment obligations small enough then in equilibrium you will have lower unemployment and more people having to put up with low pay and poor working conditions, see e.g. http://www.bbc.co.uk/news/business-37334936 But if this is the reason for low unemployment and high participation rates then it is not the sign of a well functioning labor market. Furthermore, such work often leaves workers below the bread line and so is effectively subsisized by the welfare system thus implying taxation and so inefficiency elsewhere in the economy. Investing in training and workers invariably implies commitment and so a degree of infleixibility. A flexible response to business cycle variability is a clearly a good thing in itself but not if it is at the expense of training and long term accumulation of skills, experience and organizational capital.