S UMMARY O OF TRAIN T Training summary i i • Employment analysis: Concepts, instruments, p y y p NING applications • Labour market information systems • Employment projections: Methods and an application l j i h d d li i I f anything is unclear, please ask !
EMPLOYMENT ANALYSIS: CONCEPTS, INSTRUMENTS Ekkehard ERNST Ekkehard ERNST Port of Spain, Nov 2 nd 2011
O VERVIEW O Overview i • Concepts for labour market analysis p y • Measuring the labour market • Labour market analysis: Approaches • Labour market analysis: Models • Labour market analysis: Policies
T RAINING OB BJECTIVE Training objectives T i i bj ti • Get an overview of commonly used employment y p y ES indicators • Understanding broad trends • I ntroduction in analysis instruments… d i i l i i • …and application to current problems
LABOUR MARKET ANALYSIS: CONCEPTS
L ABO Labour market analysis: Some basics OUR MA • Observed employment is the result of several, decentralised decisions decentralised decisions RKET CO � Participating in the labour market � Finding gainful employment ONCEPTS � Deciding how many hours to work • In technical language we write: ( ( ) LF ) = × − × 1 ETF HOURS UR • Notation: Notation: � ETF: Total employment (full ‐ time equivalent) � HOURS: Hours worked per person � UR: Unemployment rate � LF: Labour force
L ABO Labour force OUR MA • The labour force is constituted by all those who are contributing to productive employment co t but g to p oduct e e p oy e t RKET CO � Covers both employed and job seekers � Does not cover people deciding to stay or become inactive... ONCEPTS � � ...or who are incapable to take up employment (e.g. those h i bl t t k l t ( th with health problems) � Typically covers people above age 15. • Inactivity can be a choice: � Taxes are too high for second earners (women) to seek for employment employment � Social assistance is too generous � Opportunity costs are too high (in comparison to the wage that can be earned)
L ABO Employment OUR MA • Employment counts from the first hour... � Employment does not indicate the number of hours worked RKET CO � ...nor the type of work carried out. � It is only a numeric head ‐ count indicator of all those who ONCEPTS contribute to a country’s productive capacity contribute to a country s productive capacity • Without employment covers different statuses: � Job seekers, i.e. Who would like to work but can’t find employment � Inactive, i.e. who do not or cannot work (physically or mentally weak people) mentally weak people) � Those who would like to work but have given up to search, i.e. discouraged workers
L ABO Types of employment OUR MA • Several forms of employment... � Dependent employment (wage earners) � Dependent employment (wage earners) RKET CO � Self ‐ employment (independent workers) � Own account workers (e.g. entrepreneurs) ONCEPTS � I f � Informal employment (e.g. without proper labour contract) l l t ( ith t l b t t) � Temporary employment • • ... not all of which work full time: not all of which work full time: � Full ‐ time employees (regularly work more than 30 hours per week) � Part ‐ time employees (regularly work less than 30 hours per week, sometimes very few hours: even 1 hour counts !)... � ...which sometimes is involuntary
L ABO Working hours OUR MA • Different aspects of working time � Normal working hours � Normal working hours RKET CO � Over ‐ time working hours � Regular working hours ONCEPTS • For labour market analysis only regular working hours are relevant � Productive capacity increases with every hour, whether it is overtime or not � Regulation of overtime constitutes, however, important incentives for employers wrt expansion of workforce � The marginal productivity may decline as average working hours increase working hours increase... � ...but the average productivity (per worker) increases in any case
L ABO Unemployment OUR MA • Unemployment concerns all those without a job who: � Have not been working over the last week/month, not even RKET CO for an hour... � ...are looking for a job... � ...and ready to take up an occupation immediately (i.e. no � ONCEPTS and ready to take up an occupation immediately (i e no health problems, child care issues, etc.) • Some job seekers are unemployed for longer spells: � Typically unemployment spells above 6 months are considered to be long ‐ term � People tend to loose skills (both technical and non ‐ technical, � People tend to loose skills (both technical and non technical, “soft” skills) � LTU are more difficult to mobilise and activate to return to employment l t
L ABO Labour market flows I OUR MA • Most labour market surveys only cover “stocks” � Current situation of interviewed person in the labour � Current situation of interviewed person in the labour RKET CO market � No regard to dynamic aspects: “What have you be doing ONCEPTS 1 month/quarter/year ago?” 1 th/ t / ?” • Labour market theory makes use of flows � The extent to which employment is created depends on � The extent to which employment is created depends on how difficult it is for an employer to find new workers � It also depends on his/her expectations regarding future developments � Finally, it also depends on wage earners expectations and salary requirements y q
L ABO Labour market flows II OUR MA • Labour market analysis needs more information � Effects of policies depend on the speed of flows more � Effects of policies depend on the speed of flows more RKET CO than on the impact of stocks � Additional sources of information can be used but are ONCEPTS not quite as helpful as properly designed labour force t it h l f l l d i d l b f surveys • Some proxy indicators • Some proxy indicators � Vacancy information, help ‐ wanted ‐ index, online ads � Unemployment duration and probabilities of finding new employment
LABOUR MARKET ANALYSIS: MEASUREMENT
M EA Employment trends across countries… ASURING Employment ‐ to ‐ population ratios (2007 vs. 2010) 80 ISL THE LAB THA 70 NOR KAZ SWE PER NZL BOUR M IDN IDN RUS RUS AUS NLD CAN CHN CYP UKR FIN DNK 60 PHL VEN KOR USA AUT DEU GBR JPN COL MUS LUX PRT TWN 2010 CZE CHL ISR BRA IRL FRA ROM SVK POL POL EST EST BEL BEL 50 0 ARKET LVA LTU SLV ESP GRC MLT BUL HUN ITA TUR HRV ZFA 40 MDA MKD MAR 30 30 40 50 60 70 80 2007
M EA Employment to population ratios ASURING THE LAB ET EPR = WPOP WPOP BOUR M • ET: Total employment l l ARKET • WPOP: Working ‐ age population, i.e. all people 15 years and above and above � EPR: Employment ‐ to ‐ population ratio
M EA Employment index ‐ Calculations ASURING • Take a particular date as base year, e.g. 2005 � Take a particular date as base year, e.g. 2005 � Take a particular date as base year, e.g. 2005 THE LAB � Calculate the relative level of following years with respect to that base year BOUR M ET − = × + BaseYear t ET Index 100 t ET BaseYear BaseYear ARKET • Some words of caution � When grouping countries, add the absolute employment levels first before constructing the index � Try to find a base year with a particular meaning (e.g. peak of the cycle) p y )
M EA …and at the regional level: Global shifts in employment ASURING Employment developments (index, 2005=100) THE LABOUR MARKET
Country level reactions of employment during the crisis • In these countries, the unemployment rate more than doubled ! • G20 countries have lost up to 5 percentage points of their employment rate Changes in employme ent rates (2008q q3 to 2009q3, in pp.) -6 -4 4 -2 0 Spain U nited States Canada S South Africa Turkey Unit ed Kingdom Italy Australia Russian n Federation France Germany Japan Brazil Repub blic of Korea Mexico Argentina China Indonesia M EA ARKET BOUR M THE LAB ASURING
M EA Temporary employment took the largest hit ASURING Temporary employment in the EU (% ‐ change year ‐ on ‐ year) THE LABOUR MARKET
M EA Employment adjustment: Hours ‐ Job count mix differs across countries ASURING THE LABOUR MARKET
M EA ASURING THE LABOUR MARKET Sectoral developments…
M EA …have accelerated during the crisis ASURING Sectoral restructuring and house price developments Japan apan Sw itzerland and Sw eden eden Finl Finl nland nland and and THE LAB Chile Chi Belgium Be H o u sin g Au Austria d e p re ssio n Korea Ko Ita Italy Nether Net Net Nether herlands herlands ands ands BOUR M Canada anada Norway No Franc ance Australia Au United S Uni ed Stat ates es Portugal Portugal ugal ugal ARKET Czec ech Re h Republ public Poland and New New Z Zeal ealand and Greec eece Spai pain Hungary Hungar Hungary Hungar Estoni onia H o u sin g Sloveni enia b u b b le Slov ovak ak Re Republ public Irel eland and Uni United K ed Kingdom ngdom D D Denm enmar ark k k Turkey Tu Q1-2001 Q1 Q1-2002 2002 Q2-2003 2003 Q3-2004 2004 Q4-2005 2005 Q1-2007 2007 Q2-2008 2008 Q3-2009 2009 Q4-201 2010
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