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European labour markets have seen the simultaneous rise of unemployment and working-time flexibility. While unemployment generates widespread concern about social exclusion, the reorganization of flexible working-time has been greeted with more ambivalence. The concept of transitional labour markets (TLMs) is an attempt to address and analyze the factors and policies that can prevent high levels of unemployment and exclusion from paid work. This text addresses three key questions: can working-time flexibility integrate more people into paid employment?; can working-time flexibility prevent unemployment?; and is it possible for the barriers between core and peripheral employment to become more permeable in the way advocated by the concept of TLMs? Drawing on both quantitative longitudinal panel study data and qualitative case study material the authors (whose expertise is drawn from the fields of economics, sociology and law) provide a perspective on the nature and implications of TMLs in Spain, Sweden, Ireland, Britain, Germany, France and The Netherlands.