JOB QUALITY AND ITS LINKS WELL-BEING Hande Inanc, OECD Statistics - PowerPoint PPT Presentation

THE OECD JOB QUALITY FRAMEWORK: DEFINING, MEASURING AND ASSESSING JOB QUALITY AND ITS LINKS WELL-BEING Hande Inanc, OECD Statistics Directorate INGRID Summer School, 9-13 May 2016 Quality of Working Life and Vulnerabilities

HOW GOOD IS YOUR JOB? MEASURING AND ASSESSING JOB QUALITY

OECD Better Life Initiative 3

The importance of job quality in the policy debate From how many jobs to how good jobs are... -Laeken indicators (2001) - BUSINESSEUROPE’s Job Quality Indicators (2001) - ETUI’s job quality index (2008) - EMCO’s job quality measure (2010) - Eurofound’s Job Quality index (2012) - UNECE’s handbook for Measuring Quality of Employment (2014) - OECD’s Job Quality Framework (2015*) *Launched in 2013 • G20 Labour Ministers’ Declaration (Sep 2015, Ankara): “ Quality jobs are important as a key driver of greater well-being for individuals and society ” • G20 Leaders Summit (Nov 2015, Antalya): “ improving job quality among three dimensions, namely promoting the quality of earnings, reducing labour market insecurity and promoting good working conditions and a health society ” 4

1. What makes a quality job? The OECD Job Quality Framework

OECD project on job quality, labour market performance and well-being • Aim: to bring job quality to the forefront of the policy debate on economic performance, i.e. l abour market performance should be assessed in terms of more and better jobs • Why job quality matters? – key element of individual well-being (i.e. an end in its own right) – determines worker commitment and productivity (i.e. as a means to better economic performance) • So far limited attention to job quality in policy debate due the difficulties of defining and measuring it – Multi-dimensional nature of job quality – Comparability of job quality indicators over time, across countries and groups 6

OECD project on job quality, labour market performance and well-being Challenges: • Conceptual: job quality is multi-dimensional – what are the key dimensions? What is the relationship between these dimensions? How each of these dimensions affects people’s well -being? • Measurement: job quality measures should be outcome-based, i.e. work as experienced by workers rather than procedures – Both materia l (“work - related economic security”) and immaterial aspects (“quality of life at work”) – Analysis should be both static (point-in-time) and dynamic (transitions, persistence) • Perspective: Micro ( focus primarily on the quality of outcomes for each person) – Requires analysing not only average, but also distribution – Requires looking at the role of workers, jobs, firms, environmental characteristics 7

Job quality, job quantity and well-being Well-being Labour market performance Job quantity Job quality Employment / Earnings Labour market unemployment quality security Under-employment Quality of the work environment 8

2. Measuring Job quality 2.1 Earnings quality

Measuring Earnings Quality: • Earnings quality captures the extent to which earnings contribute to workers' well-being in terms of average earnings and their distribution across the workforce. Earnings Quality Average earnings Earnings Inequality -> measured as hourly earnings in -> Measured using generalised means constant prices, at constant PPPs framework (Atkinson, 1970) -Allows giving more weight to the bottom of the distribution, thereby taking account of both the level and its distribution 10

Earnings quality should take account of both average earnings and its distribution • Life satisfaction increases with the level of earnings – Holds both across countries as well as between persons within countries • For a given level of average earnings, overall well-being tends to be higher the more equal its distribution – Life satisfaction rises at a decreasing rate with earnings (“saturation effect”) – People tend to display an intrinsic dislike of high inequality in society (“inequality aversion”) 11

Earnings Quality in the OECD countries PPP-adjusted gross hourly earnings in USD, 2013 or latest year available Earnings quality Average earnings Earnings inequality (right axis) USD, PPPs % 40 1.0 0.9 35 0.8 30 0.7 25 0.6 20 0.5 0.4 15 0.3 10 0.2 5 0.1 0 0.0 Note. The data refer to: 2012 for France, Italy, Poland, Spain and Switzerland; and 2010 for Estonia, Luxembourg, Netherlands, Slovenia and Turkey. Generalized means approach is used as an aggregation tool to compute earnings quality measures, assuming a high inequality aversion. Source: OECD Job Quality database (2016).

2. Measuring Job Quality 2.2 Labour market (in)security

Measuring labour market (in)security: Unemployment risk and insurance • Labour market security captures those aspects of economic security related to the risks of job loss and its economic cost for workers. It is defined by the risks of unemployment and benefits received in case of unemployment. Expected cost of unemployment Effective unemployment insurance Unemployment risk - probability of becoming unemployed - accessibility of benefits - probability of staying unemployed - their generosity and maximum duration - the progressivity of the tax system -> measured using data on unemployment ->use OECD benefit-recipiency database inflows and outflows and OECD taxes-benefits models 14

Unemployment risk and insurance have important implications for well being Estimated effects of unemployment risk on life satisfaction and the compensating effects of effective unemployment insurance. Note. The well-being effect is measured in terms of standard deviations in life satisfaction. Source: OECD Employment Outlook 2014. OECD estimates based on the European Union Statistics on Income and Living Conditions (EU-SILC) and the 15 European Social Survey,

Labour market insecurity in the OECD countries Risk of becoming unemployed and its expected cost as a share of previous earnings, 2013 Labour market insecurity Unemployment risk Unemployment insurance (right axis) % % 40 100 90 35 80 30 70 25 60 20 50 40 15 30 10 20 5 10 0 0 Note. Data on Chile refers to 2011 instead of 2013. Source: OECD Job Quality database (2016).

2. Measuring Job quality 2.3 Quality of the working environment

Measuring quality of the working environment OECD’s approach to Quality of Working Environment • Job demands aspects of the job that require sustained physical and psychological efforts • Job resources refer to those job attributes that lead to personal accomplishment or that are instrumental in achieving work 18

Measuring quality of the working environment • Depends on balance between job demands which impair health and job resources which mitigate their effects Job demands Job resources - time pressure - work autonomy & learning - physical health risks - social support at work - ( emotional demands ) - (good management practices) - ( workplace intimidation ) - (task clarity) Index of job strain combination of excessive job demands & insufficient resources that increases risk of health impairment 19

Measuring quality of the working environment Job strain, as the result of… … too many job demands … and too few job resources Can choose or change the order of tasks Work usually more than 50 hours per week Work Can choose or change methods of work Time Difficult to take an hour or two off during working autonomy Job involves learning new things pressure hours for personal or family matters and learning opportunities Employer provided training or on-the-job Work at very high speed and to tight deadline training Tiring and painful positions Carrying or moving heavy loads Physical Social Colleagues help and support health risk support at Exposed to vibrations from hand tools, machinery Managers help and support factors work Exposure to high noise Exposure to high or low temperature Well-defined work goals Verbal abuse Good Workplace Feedbacks from manager Threats and humiliating behaviours management intimidation Manager good at planning and organising practices Bullying or harassment work 20

Quality of the working environment in the OECD countries Incidence of job strain, 2015 Job strain Excessive demands Insufficient resources % 80 Other OECD countries (2005) 70 EU countries 60 50 40 30 20 10 0 Note. Data on Turkey are based on results of the 2005 European Working Conditions Surveys (EWCS). Source: OECD Job Quality database (2016) based on the 6th European Working Conditions Survey (Forthcoming) for 2015 and International Social Survey Program Work Orientations Module III for 2005.

Job strain and physical health (I): ‘My work impairs my health’ % 60 50 40 30 20 10 0 High demands High demands Low demands Low demands Low resources High resources Low resources High resources 22 Source: OECD Calculations using the EWCS 5 th Wave

Job strain and physical health (I): ‘My work impairs my health’ All workers Workers in strained jobs 90 80 70 60 50 40 30 20 10 0 IRL GBR NLD ITA BEL FIN DEU TUR DNK LUX FRA SWE NOR ESP PRT AUT CZE SVK GRC POL HUN EST SVN Source: OECD Calculations using the EWCS 5 th Wave