Public Economics: Welfare states and inequalities University of Castellanza Session #1(b)
Employment and Euroscelerosis
8 November 2010
Public Economics: Welfare states and inequalities University of Castellanza Session #1(b)
Employment and Euroscelerosis
8 November 2010
Overview Euroscelerosis
Europe’s low employment problem
Employment, unemployment and inactivity
Europe’s inflexible labour markets
Lisbon Declaration 2000 and Lisbon targets
Rising European employment
High employment societies
Germany and the advantages of inflexibility
Ways of getting to Lisbon
Different forms of flexibility and high employment
‘Euroscelerosis’: Fewer Europeans than Americans at work During the last quarter of the 20th century employment in the USA grew, but stagnated in Europe
Employment statuses 2006 Full-time or part-time work Home duties Studying without part time work Early retired Prison (Important in USA) Source: Employment in Europe 2007
Flexibility and Employment EPL: Employment Protection Level (ranking)
Countries where employment is most protected (high EPL ranking) tend to have low employment rates
Lisbon Declaration 2000 'A new strategic goal needs to be defined for the next ten years: to make the European Union the world's most dynamic and competitive area, based on innovation and knowledge, able to boost economic growth levels with more and better jobs and greater social cohesion.‘
Lisbon Employment Targets Outcomes 2007
All Women All 55-64 (Unemployment as % of labour force 15+) Lisbon target 70.0 60.0 50.0 none France 64.6 60.0 38.3 8.3 Germany 69.4 64.0 51.5 8.4 Ireland 69.1 60.6 53.8 4.6 Italy 58.7 46.6 33.8 6.1 Sweden 74.2 71.8 70.0 6.1 UK 71.3 65.5 57.4 5.3 EU15 66.9 59.7 46.6 7.0 EU27 65.4 58.3 44.7 7.2* Source: European Commission (2008), Employment in Europe 2008.
*EU25
Employment rates 1997-2008 Source: Employment in Europe 2009 Scandinavian states and the UK are high employment societies
High employment societies
Who works
Women (full or part-time)
Older people (full or part-time)
Students (part-time)
Requirements
Flexible labour markets
Employers can offer part-time and/or temporary work
Non-domestic caring work
Care for children and older people cared for outside the household unit
By the market or by public systems
Individualised tax and benefit system
(No advantages for staying at home)
Benefits of inflexibility German vocational training system
High quality apprenticeship for most school leavers ensures qualification ‘Lehre’ which recognised and valued
National ‘Berufsbilder’ define qualification
Dual system of employers and state
Organised by employers with trade union input
Trade off
Employers cannot easily dismiss employees (Numerical flexibility)
Employers have incentive to use employees flexibly (Functional flexibility)
So ‘beneficial constraints’ (Streeck) of inflexibility
Good and bad flexibility? Both UK and Denmark appear highly flexible and have high employment – but in different ways
In the UK:
Flexibility on employers’ terms
Bad jobs and/or poverty?
In Denmark (also to some extent Sweden)
‘Flexicurity’
Flexibility also for employees
Easy dismissal but high social protection
High spending on training and ‘activation’ (counselling etc)
‘Protect the worker not the job’
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