FACES OF JOBLESSNESS IN PORTUGAL: UNDERSTANDING EMPLOYMENT BARRIERS TO INFORM POLICY The European Pillar of Social Rights, Poverty Targets, and Barriers to Employment Lisbon, 16 March 2018 Herwig Immervoll Directorate for Employment, Labour and Social Affairs herwig.immervoll@oecd.org www.oecd.org/social/faces-of-joblessness.htm
Faces of Joblessness Diagnostics for people-centred policies Premise: Circumstances of jobless are often messy Need good-quality info on them to assess untapped sources of employment growth; prioritise among groups and competing policy challenges; target & tailor policy interventions; integrate services in a way that works for policy clients ; understand why different approaches work (or not); move from general principles of what works, to conversation on specifics and implementation. Objective: Systematic view on complex circumstances, align statistics & indicators with real-world experience of joblessness Map of disadvantaged, vulnerable groups. Who are they? What employment barriers do they face? What policy levers to tackle those barriers? 2
Faces of Joblessness What programmes for vulnerable groups? activation & employment support policies? 3
Faces of Joblessness What programmes for vulnerable groups? activation & employment support policies 1 2 3 4 4
Existing information is incomplete Existing high-level labour-market indicators contain little information on relevant employment barriers standard breakdowns (age, sex, ) no clear link with problems to be addressed ( being young is not a barrier ) largely individual-based, little family context Existing in-depth profiling systems designed for needs of specific process / institution (e.g., PES) generally not used for higher-level policy dialogue may not capture circumstances relevant for key policy areas, eg. care responsibilities, incentives miss big parts of jobless, eg. only registered unemployed 5
Country dialogue Filling the gap: Main steps People-centred, bottom-up approach 1 Select population of interest here: jobless + low-intensity / unstable employment (household data: EU-SILC) 2 3 4 Measure employment barriers (i) capabilities, (ii) motivation, (iii) opportunities Identify policy-relevant groups individuals with similar sets of barriers (statistical clustering method) Policy inventory & gap analysis existing programmes accessible for key groups? well-aligned with main employment barriers?
A joint effort Initially a 2-year project 2016/2017, innovative partnership: Estonia Ireland Italy Lithuania Portugal Spain Greece Hungary Poland Bulgaria Croatia Romania Unified method and outputs Extensions @OECD: Australia, Estonia, Finland, Ireland, Italy, Lithuania Findings used in OECD policy reviews, European Semester employment difficulties very different across countries & groups indicates different needs for support, even in demographically similar population segments ( older workers, youth, mothers ) traditional ways of presenting LM statistics cannot capture this large majority face multiple barriers existing programmes sometimes of right type but poor access, coordination 7
% of working-age population Scope for labour-market integration measures. Up to half have potential difficulties Inactive Persistently unemployed Weak labour market attachment 50 40 30 20 10 0 18-64, excluding students, military service Source: EU SILC and HILDA 2014
Individuals with potential employment difficulties Out of work 29% of working-age individuals Weak labour-market attachment 10% of working-age individuals Restricted hours Unstable jobs Near-zero earnings 18-64, excluding students, military service Source: EU SILC 2014 9
What difficulties? A typology of employment barriers Work-related capabilities Education / skills Work experience Health problems Care responsibilities Motivation / Incentives Out-of-work benefits Tax burdens on inwork earnings Non-labour incomes Earnings of other family members Opportunities Cyclical labourmarket weakness Limited hiring in relevant labourmarket segment (eg, region, education) 10 Adapted from Immervoll and Scarpetta, 2012
Employment barriers Incidence across countries % of individuals with potential labour market difficulties 80 70 60 50 40 30 20 10 0 Capabilities Incentives Opportunities Source: EU-SILC 2014. 11
% of jobless & partially employed Most face multiple barriers 4 or more barriers 3 barriers 2 barriers single barrier No major barrier 100 90 80 70 60 50 40 30 20 10 0 Source: EU-SILC and HILDA 2014. 12
Many of distinct groups Are they on the radar of policy? Summary Size Summary Size 1. Older labour-market inactive women Health problems Low education and limited work experience 22% 7. Labour market inactive women No past work experience Low education Some have access to other incomes 7% 2. Prime-age long-term unemployed Low education Scarce job opportunities 3. Workers with weak labour market attachment Low education Some have also health limitations and have access to other incomes 4. Early retirees with work experience Health limitations Low education 20% 12% 12% 8. Youth with unstable employment Some work experience Some have insufficient skills and scarce job opportunities 9. Labour-market inactive mothers Care responsibilities Limited work experience Some have access to other incomes 6% 3% 5. Long-term unemployed youth No past work experience Scarce job opportunities 9% 6. Better-off early retirees with weak financial incentives to work High earnings-replacement benefits Access to other incomes 9% 13
Zooming in: Employment barriers and characteristics Long-term unemployed youth - 24 years old (average) - Unemployed - Length of unemployment spell: 12+ months (average) - No past work experience - 11.6 years of schooling (average) - At risk of poverty - Average equ disposable income: EUR 6 081 (1 st quintile) - 3 simultaneous employment obstacles (average) size, % Youth with weak/unstable employment - 26 years old (average) - Unstable work with long out-of-work spells inbetween - Length of unemployment spell: 10 months (average) - 5 Years of paid work experience (average) - 13 years of schooling (average) - Average equ disposable income: EUR 7 914 (2 nd quintile) 2 simultaneous employment obstacles (average) size, %. 14
Early school leaving has declined but remains high 25-34 year-olds with less than upper-secondary education, 2014 70 60 50 40 30 20 10 0 Women Men Source: OECD calculations using EU-LFS and national labour force surveys. 15
Incomplete access to benefits Source: Calculations based on EU-LFS, US Current Population Survey, Australia HILDA 16
especially for young unemployed Twelve months of work experience bring entitlements to unemployment insurance benefits, but benefit durations are short for young people Source: OECD Tax-benefit models (TaxBEN): www.oecd.org/social/benefits-and-wages.htm 17
especially for young unemployed 50 Share of youth in receipt of social assistance or housing benefits 40 30 20 10 0 Source: OECD (2016), Society at a Glance. 18
especially for young unemployed Selected characteristics, percentages in each group Faces of Joblessness Group # 1 2 3 4 5 6 7 8 9 ALL Primary education 28 18 54 Lower secondary education 26 25 20 Upper secondary education 32 33 16 Tertiary education 15 24 11 Receiving unemployment benefits 4 12 16 Receiving family benefits 31 22 22 Receiving social assistance 14 5 7 Working at the moment of the interview 0 61 20 Live in rural area 23 27 28 Actively looking for work at the moment of the interview (if not working) 76 76 41 Another household member in work 68 77 57 Source: Calculations based on EU-SILC 2014. 19
Capacity constrained employment services Source: OECD LMP database 20
Capacity constrained employment services 30 Reliance on Public Employment Services among recent job starters among registered unemployed 20 10 0 Source: Calculations based on EU-LFS 21
especially for young unemployed ALMP participation remains low among youth Below 20 20-24 24-34 2013 5% 16% 26% 2015 4% 17% 27% 2016 (*) 6% 19% 26% Source: Data provided by IEFP. (*) provisional. 22
High incidence of temporary employment contributes to unstable jobs Temporary employment among 15-24 year-olds Share of all dependent employment Source: OECD Labour force statistics. 23
Internship programmes did not benefit the most disadvantaged Participants in internship by education level, 2015 Total number of participants Below first cycle of primary education First cycle of primary education Second cycle of primary education Third cycle of primary education Secondary education Higher education Internship (estagio emprego) 70482 0% 0% 0% 10% 32% 58% Source: Data provided by IEFP. 24
Some conclusions Tailoring and individualising services but how? Who are the so-called disadvantaged groups? Are the jobless fully on the radar of employment support policies? For instance, while unemployment remains an important issue, the persistently unemployed are not the only, or even the main, source of future employment growth. A need to link up & coordinate across institutions. Large majority of people with labour-market problems face multiple barriers. They likely require multiple types of support, which requires coordination and sequencing. 25
Thank you Contact: Herwig.Immervoll@oecd.org Links & further information: www.oecd.org/social/faces-of-joblessness.htm All country studies forthcoming in the OECD Social, Employment and Migration Working Paper series. Connecting People with Good Jobs www.oecd.org/social/benefits-and-wages.htm Skills and Work Investing in Youth Ageing and Employment Policy Displaced Workers Mental Health and Work Follow us: @OECD_Social