(Università Bocconi and Fondazione Rodolfo Debenedetti) The current crisis and the labor market. Brussels November

Transcription

1 Two tier after the crisis: skipping a generation? Tito Boeri (Università Bocconi and Fondazione Rodolfo Debenedetti) The current crisis and the labor market IZA Employment Seminar Brussels November

2 Outline From a EU Miracletoa EU Nightmare ih How does the combination strict EPL short time work operate The age divide and human capital formation Policy implications: UBs and the tenure track

3 Unemployment declined with larger inflows/outflows outflows, right scale inflows, left scale Inflows Outflows

4 Decomposing contribution to U decline Decade Job Finding Separation Change in Contribution Contribution rate \1 rate \2 unemployment \3 job finding separation ft st Δut cont ft/δut cont st/δut \1 Average job finding rate \2 Average job separation rate \3 Change in state unemployment ut=st/(st+ft) Source: Authors' calculation based on Pissarides and Petrongolo

5 Two Sides of Same Coin: Increase in mobility at declining unemployment Average U turn nover (%) 1, ,2 1,15 1,1 1,05 1 0,95 Average U rate (%) ,38 0,37 0,36 0, ,34 0,33 0, ,31 verage Mobility Index (%) A 0,9 5 0,3 0, ,29 av_u_turnover av_u_rate av_u_rate av_mob_index

6 The Honeymoon Effect Flexi land (bad times) (good times) A B Employment

7 The Honeymoon Effect Rigid land (bad times) (good times) A C B Employment

8 The Honeymoon Effect Two tier Regime (bad times) (good times) A C D B Employment

9 Temporary contracts: the rise. 16 Temporary employees % of total dependent employment EU

10 ..and fall 14,8 Temporary employees % Quarterlydata EU15 14,6 14,4 14, ,8 13,6 13,4 13, Q Q Q Q Q Q02

11 Temporary Job blosses Delta % 2008Q Q Q Q Q Q02 DE 4,954,800 4,853, , % 2 ES 4,952,500 3,971, , % FR 3,297,800 3,091, , % IT 2,443,100 2,214, , % UK 1,349,800, 1,395,700, 45, %

12 TEMPs and overall Job Losses Temporary Employment Total Employment 2009Q Q02 % DE 2.04% ES 19.81% FR 6.25% 2009Q2 2008Q2 % DE 0.45% ES 7.25% FR 0.34% IT 9.37% 9 IT 1.60% UK 3.40% UK 2.04%

13 Outline From a EU Miracletoa EU Nightmare ih How does the combination strict EPL short time work operate The generational divide The tenure track

14 US and Germany

15 US and Germany (2)

16 Freezing workers into firms (Italy CIG) ITALY Total Workers Percentage Increase 2007q4 2008q1 2008q2 2008q3 2008q4 2009q1 2009q2 53,000 55,000 56,000 80, , , , % 1.82% 42.86% 43.75% % 39.18% ITALY 2008 (January September) 144,270,578, 2009 (January September) 622,048,920 Percentage Increase 331% Total number of Frozen Hours

17 Freezing workers (Italy CIG) Total number of CIG Hours (08 09) ,270, ,048, % q4 2008q1 2008q2 2008q3 2008q4 2009q1 2009q2

18 Outline From a EU Miracle to a EU Nightmare How does short time work operate Theage divide and human capital formation The tenure track

19 Temporary contracts by age % of emplo yees with te emporary co ntracts France Denmark Netherlands 0.5 Italy Spain 0.4 Portugal Age

20 3,30 Relative risk of unemployment <25 vs. tot. (July 09) 3,10 2,90 2,70 2,50 2,30 2,10 1,90 1,70 1,50 Fonte: Eurostat

21 Increased in short time work, strict EPL countries Unemployment <25y/tot. (basis points, delta ) 0,30 0,20 0,10 0,00 0,10 0,20 0, ,40 0,50 0,60 0,70 0,80 Fonte: Eurostat

22 On the job training by contract type Formazione sul posto di lavoro (under 30) Germania Danimarca Paesi Bassi Belgio Lus ussemburgo Francia Regno Unito Irlanda Italia Grecia Spagna Portogallo Austria Finlandia tempo indeterminato tempo determinato Source: ECHP

23 Returns to on the job training and age

24 Outline From a EU Miracle to a EU Nightmare How does short time work operate Thegenerational divide Policy implications: UBs and the tenure track

25 Issues Depending on the nature of the shocks, different combinations of policy instruments EPL and short time work may work if also shock is short time, transient Otherwise 1. No restructuring 2. No investment in human capital 3. Lost generations lost pensions Strong pressures to go back. Example of Japan

26 The legacy of two tiertier reforms

27 Reforms for all times level the playing field Tenure track to stable employment: all hiringsi are from the beginning on open ended contracts offering tenured job security. Constraints to fixed term contracts. Only genuinely temporary jobs Unemployment benefits covering also short tenured jobs Orange envelopes making people aware of future pensions

28 The orange envelope