NEC Conference June 20, 2012 Labour Market Group Indicators to - PowerPoint PPT Presentation

NEC Conference June 20, 2012 Labour Market Group Indicators to assess the adjustment program NOVA Economics Club Labour Market 1/32

The Portuguese Labour Market • Labour Market • Reform • KPIs • Next Steps The Portuguese Labour Market is actually characterized by: • Historical maximum on April 2012 of 15,2% of unemployment rate; • Rising long-term unemployment , above the levels of EU; • Segmentation (protectionism of the seniors over the young) due to high strictness in employment protection legislation; • Lack of workers’ mobility either across sectors or across regions concentrating mainly on the services sector in the coast side of the country; • Low productivity and thus low competitiveness; • Destruction of jobs and lower pace of creation of jobs due to the economic crisis; • High youth unemployment (about 1/3 of the Portuguese young). NOVA Economics Club Labour Market 2/32

The Portuguese Labour Market Reform • Labour Market • Reform • KPIs • Next Steps To address the problems previously mentioned, the Memorandum of Understanding presents important measures in the following areas of the labour market: • Unemployment Benefits Reduce long-term unemployment and strengthen the social security. • Employment Protection Legislation Tackle market segmentation, foster job creation and ease workers’ mobility. • Working Time Arrangements Contain employment fluctuations and accommodate different working patterns. • Wage Setting and Competitiveness Adjust labour costs to the development of job creation and competitiveness. • Active Labour Market Policies Improve employability of the young and disadvantaged categories. NOVA Economics Club Labour Market 3/32

Unemployment Benefits • Labour Market • Reform • KPIs • Next Steps Proposed Measure Implementation Status Unemployment Benefits i) Reduce the maximum duration of UB to Partly Observed. The maximum duration no more than 18 months was reduced from 36 to 28 months. ii) Capping UB at 2.5 times the IAS Observed. iii) Declining profile of benefits over the Observed. A cut in the benefit of 10% after unemployment spell after 6 months of 6 months of unemployment was unemployment. introduced. iv) Reducing the necessary contributory Observed. period from 15 to 12 months v) Extend eligibility to unemployment Observed. Self-employed obtaining 80% of insurance to clearly-defined categories of their annual income from a single entity self-employed workers. are abridged by this measure. NOVA Economics Club Labour Market 4/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps • Long-term Unemployed (as % of the Active Population) • Long-term Unemployed (as % of the Active Population) • Registered Long-term Unemployed by Duration • Registered Unemployed over 35 years old (as % total registered unemployed) • Average Monthly Amount of Subsidy per Beneficiary, in Euros • Ratio of Registered Unemployed to Total Unemployed which were Previously Self Employed Workers NOVA Economics Club Labour Market 5/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Name Long-term Unemployed (as % of the Active Population) Frequency Quarterly Start: 1 st Quarter,1998 End: 4 th Quarter, 2011 Period Reference Area Mainland Portugal, Madeira and Azores Assess whether the reforms of the unemployment insurance system Objective have impact on the reduction of long-term unemployment Unit Percentage Formula (Population unemployed for 12 or more months/active population) Long-term unemployed - for 12 or more months Variables Active population Sources INE – Inquérito ao Emprego If this indicator increases either mean that the number of long-term Interpretation unemployed increase or active population decreased Last Update April 2012 NOVA Economics Club Labour Market 6/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Long-term Unemployed (as % of the Active Population) 6 8 Millions % 7 5 6 4 5 3 4 Unemp>12M Act Pop 3 2 %LT unemp 2 1 1 0 0 NOVA Economics Club Labour Market 7/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps • Long-term Unemployed (as % of the Active Population) • Registered Long-term Unemployed by Duration • Registered Unemployed over 35 years old (as % total registered unemployed) • Average Monthly Amount of Subsidy per Beneficiary, in Euros • Ratio of Registered Unemployed to Total Unemployed which were Previously Self Employed Workers NOVA Economics Club Labour Market 8/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Name Registered Long-term Unemployed by Duration Frequency Annually Period Start: 2000 End: 2011 Reference Area Mainland Portugal Assess whether the reforms of the unemployment insurance system have Objective impact on the shortening of the long-term unemployment Unit Percentage (of the total) (registered unemployed for more than 24 months/ total of registered Formula unemployed) and (registered unemployed for between 12 and 24 months/ total of registered unemployed) registered unemployed for more than 24 months Variables total of registered unemployed registered unemployed for between 12 and 24 months Sources IEFP – Relatórios Anuais If this indicator increases either mean that the number of long-term Interpretation unemployed increase or the number of registered short-term decreased in relative terms Last Update April 2012 NOVA Economics Club Labour Market 9/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Registered Long-term Unemployed by Duration 24 % 23 22 21 20 >12M and <24M 19 ≥24M 18 17 16 15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NOVA Economics Club Labour Market 10/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Registered Long-term Unemployed by Duration 24 % 23 22 21 20 >12M and <24M 19 ≥24M Let us move this line 1 year back 18 17 16 15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NOVA Economics Club Labour Market 11/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps • Long-term Unemployed (as % of the Active Population) • Registered Long-term Unemployed by Duration • Registered Unemployed over 35 years old (as % total registered unemployed) • Average Monthly Amount of Subsidy per Beneficiary, in Euros • Ratio of Registered Unemployed to Total Unemployed which were Previously Self Employed Workers NOVA Economics Club Labour Market 12/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Name Average Monthly Amount of Subsidy per Beneficiary, in Euros Frequency Monthly Period Start: September, 2009 End: February, 2012 Reference Area Mainland Portugal, Madeira and Azores Verify in how much the average decreased as a consequence of Objective capping unemployment benefits Unit Absolute value, in Euros Formula Original variable Variables Average monthly unemployment benefit in Euros Sources SS – Estatísticas do Desemprego e do Apoio ao Emprego If this indicator decreases it means that there was a relevant number Interpretation of people receiving between 2.5 and 3 times the IAS decreased in relative terms (using this indicator as a proxy) Last Update April 2012 NOVA Economics Club Labour Market 13/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps Average monthly amount of subsidy per beneficiary ( € ) 520 500 480 460 avg benefit 440 IAS(419,22 € ) 420 400 2009M9 2009M12 2010M3 2010M6 2010M9 2010M12 2011M3 2011M6 2011M9 2011M12 NOVA Economics Club Labour Market 14/32

Unemployment Benefits – Key Performance Indicators • Labour Market • Reform • KPIs • Next Steps • Long-term Unemployed (as % of the Active Population) • Registered Long-term Unemployed by Duration • Registered Unemployed over 35 years old (as % total registered unemployed) • Average Monthly Amount of Subsidy per Beneficiary, in Euros • Ratio of Registered Unemployed to Total Unemployed which were Previously Self Employed Workers NOVA Economics Club Labour Market 15/32