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1
A few plain exercises in comparative analysis of
European labour markets
Emilio Reyneri
University of Milan Bicocca
Equalsoc Summer School
Trento, July 3rd 2007
2
Different approaches in cross-national studies
Methods
• Variable-oriented• Case-oriented• Societal analysis
3
Different approaches in cross-national studies
Explanatory factors
1. Economic (growth and technology)
2. Cultural (social norms and values)
3. Institutional (political system and organisations)
4
Variable-oriented approach
- Macro analysis- Focus on relations between variables- Country = set of items of variables
included in the analysis- Usually quantitative variables (data-
bases)- A quite large number of countries
5
Case-oriented approach
- Micro analysis- Focus on how phenomena are working
in each case- Country = case considered as a “whole”- Qualitative variables are often stressed- (Very) few country-cases
6
Societal analysis approach- Micro-macro analysis- Two steps:
1. stressing relations between variables inside any country
(also at individual level) 2. cross-national comparing the results of those relations
- Quali/quantitative variables (recently also longitudinal)
7
Societal analysis approach
- Intermediate number of countries- Standardised data-sets are needed- Usual outcomes = typologies
- un/employment models- labour market systems- welfare regimes
8
Variable-oriented approachMeritsEasy availability of national average data allows exploratory analyses on many countries, also for long periods of time.LimitsNumber of countries often too restricted for statistical methods (regressions).Choice of countries can undermine the results.Macro-relations may not be confirmed at the micro level.
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Two easy examples concerning the choice of countries
1. Cross-national relation between penalisation of women and their labour market participation.
2. Cross-national relation between female employment and the proportion of part time.
Women in the labour market: at a cross-road between cultural norms, socio-political institutions, economic growth.
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Fig. 1. Relation between women penalisation and their labour market participation, Western European countries
2005
y = -0,0328x + 3,3999
R2 = 0,3891
0,5
1
1,5
2
2,5
3
45 50 55 60 65 70 75 80
Women activity rate
Rat
io o
f wom
en/m
en
unem
ploy
men
t rat
es
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The underlying hypothesis
Women are more penalised in societies that are less accustomed to regarding their participation in the labour market as fully normal by social standards (gender culture: mother vs. worker).ButSuch a hypothesis is grounded on the choice of countries where labour market participation of women was growing over time at least since early Seventies
12
Fig. 2. Relation between women penalisation and their labour market participation. All European countries, 2005
y = -0,0203x + 2,4732
R2 = 0,1589
0,5
1
1,5
2
2,5
3
45 50 55 60 65 70 75 80
Women activity rate
Rat
io o
f wom
en/m
en
unem
ploy
men
t rat
es
13
Fig. 3. Relation between women penalisation and their labour market participation. Eastern European countries,
2005
y = -0,0002x + 1,0759
R2 = 0,00
0,60
0,70
0,80
0,90
1,00
1,10
1,20
1,30
1,40
1,50
1,60
54 56 58 60 62 64 66 68
Women activity rate
Rat
io o
f wom
en/m
en
unem
ploy
men
t rat
es
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The different story of former planned societies
Near full employment also for women in planned societies; then transition caused a more or less important decrease of women activity rate and increase of unemployment, both for women and men.In those countries, long time fully accustomed in regarding women as workers, their (recent) penalisation followed idiosyncratic pathways.
15
Fig. 4. Relation between women employment and part time. Western European countries, 2005
y = 0,9349x - 23,337
R2 = 0,2725
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
40,0 45,0 50,0 55,0 60,0 65,0 70,0 75,0
Employment rate (15-64 yrs)
% p
art
tim
e
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The underlying hypothesisSince early ’70s, growth in % part time paralleled growth of women employment in all Western countries (but Italy till early ’90s).Part time pushed women employment because it let also poorly educated (and more family-committed / poorly paid) women to get a paid work.So, women are more employed in countries where opportunities for part time jobs are larger.
17
Fig. 5. Relation between women employment and part time. Eastern European countries, 2005
y = 0,0454x + 5,7483
R2 = 0,0061
0,0
2,0
4,0
6,0
8,0
10,0
12,0
14,0
40,0 45,0 50,0 55,0 60,0 65,0
Employment rate (15-64 yrs)
% P
art
tim
e
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The different story of former planned societies
In those countries also poorly educated women were accustomed to being fully employed in full time jobs.When transition caused a more or less important decrease in their employment rate, the proportion of women in part time jobs remained very low and cross-nationally followed idiosyncratic pathways without any relation with their labour participation.
19
A macro-relation not confirmed at the micro level
Proportion of self-employed workers in EU15 countries is often related to Oecd protection index for dependent employment (EIP)
A (weak) positive cross-national relation does exist (hypothesis A)
20
Table 6. Relation between the proportion of self-employed and the dependent employment protection
index
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
0 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5
Employment protection index (Ocde 2004)
Pro
port
ion
of s
elf-
empl
oyed
r = 0.21
Greec
Portuga
Sw edeDenmar
FrancGerman
FinlanNetherland
Great
SpaiBelgiu
Ital
21
Proportion of self-employed workers
However,A (negative) cross-national relation between the proportion of self-employment and the generosity of unemployment benefits is even larger
(hypothesis B)
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Table 7. Relation between the proportion of self-employed and the index of generosity of unemployment
benefits
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
45,0
0 10 20 30 40 50 60 70 80
Index of generosity of unemployment benefits
Pro
po
rtio
n o
f sel
f-em
plo
yed
r = - 0.39
Denmar
Greec
ItalPortuga
Great German
Sw ede
Franc
Spai
Belgium
Finlan
Netherland
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Both those macro relations are poorly consistent at a micro-levelMost of people entering self-employment are only apparently - young first-job seekers (A) → intergenerational transmission- job-losers (B) → pseudo-self-employment of
seasonal workers(from a research on Italy, 27 % self-employed)
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Who self-employed really are
- prime age men, - skilled and professional workers, - long work experience as employees,- well-endowed with social capital, attained working in small firms,- committed to individualistic mobilization
Cross-national variation in % self-em. grounded on differences in wider economic and social fabric
25
Cross-national variation in youth unemployment
Variation in total unemployment rate among EU countries is important, but much more important is variation in penalisation of youth vs. prime age people (as well as of women vs. men).
Ratio of youth/adult unemployment rates ranges from 1.1 to 3.6
26
Fig. 8. Unemployment rate by age, 2004
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64
France Spain Ireland Belgium Italy Germany
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The connection with the strictness of the labour market
regulation
• Oecd tried to cross-nationally relates - unemployment rate to EIP → failure - youth/adult unemployment rate to
EIP → failure• To look for a viable relation between
youth/adult unemployment and EIP, Breen (2005) added an institutional variable: the educational system
28
Educational system’s role in the transition from school to work
• Vocational education → signalling a job seeker for a job → reducing seeking time
• General education→ no signalling function
• Where vocational education prevails, impact of high EIP is counterbalanced → youth vs. adult unemployment
low penalisation
29
Breaking-down the ratio of youth/ adult unemployment rates by
education
Low Medium High
Italy 2.8 4.8 6.3
Spain 1.8 3.1 3.5
France 2.1 2.3 2.0
Britain 2.2 2.4 1.7
Netherlands 1.9 2.0 1.9
Germany 1.0 0.9 1.0
30
Fig. 9. Unemployment rate by age and educational attainment. Italy 2001, Men
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74
Low Medium High
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Fig. 10. Unemployment rate by age and educational attainment. UK 2001, Men
0,0
5,0
10,0
15,0
20,0
25,0
30,0
15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74
Low Medium High
32
Are Breen’s results confirmed?• EU cross-national differences in the gap
between youth and prime age unemployment rates concern essentially highly and medium educated people.
• YES, but …
• We can wonder if in some countries just educated youth face more difficulties in finding jobs because highly qualified labour demand is too poor
33
People in employment by skill level (employers excepted)
Italy Spain Germany France Ireland
Senior officials and managers 1,8 1,8 3,8 4,7 11,2
Professionals 10,7 12,9 16,3 13,3 18,7
Technicians 23,6 11,3 22,5 18,8 6,9
Clerks 11,7 8,6 12,2 13,3 13,8
Service and sales workers 12,1 15,6 10,8 12,7 14,7
Skilled workers 20,0 24,7 20,4 17,3 16,5
Plant and machine operators 10,0 11,5 7,9 10,1 9,2
Elementary occupations 10,1 13,6 6,2 9,8 9,0
Total 100,0 100,0 100,0 100,0 100,0
Source: Eurostat, Labour Force Surveys
34
A mismatch between demand and supply
• In countries (Italy, Spain) most penalising educated youths, the proportion of youths attaining higher educational qualifications is still relatively low
But• Their economic systems provide younger
cohorts with even lower proportions of highly qualified jobs- predominance of small and very small firms- shortage of high tech economic sectors.
35
Why no displacement effect?
Oversupply of highly educated youths entering labour markets, who have to wait long time for getting a job suitable to their socio-professional expectations
ButThey are also able to do so, as in
those countries most of them can rely on their parents’ support
36
Fig. 11. Proportion of young adults aged 30 yrs living with their parents
(2002)
0
10
20
30
40
50
60
Italy Spain Ireland Germany Belgium GreatBritain
France
Men Women
37
An unbalanced support for youths and prime age people
looking for a jobIf educated youths can allow themselves
long searching time for the first job.
Prime age job losers receive only very scarce unemployment benefits (a punitive “welfare to work” policy), thus they are forced to take a new job as soon as possible.
38
The impact of welfare system on the unemployment structure
More generally
Among old EU member states does exist a negative relation between the level of the unemployment benefits and the ratio of youth/adult unemployment rates
39
Fig. 12. Relation between the ratio of youth/adult unemployment rates and the level of generosity of
unemployment benefits
Germany
GreeceItaly
r = - 0,43
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
0 10 20 30 40 50 60 70 80
Index of generosity of unemployment benefits
Rat
io o
f yo
uth
/ad
ult
u
nem
plo
ymen
t ra
tes
Great
Sw ede
Denmar
Netherlan
Finlan
BelgiuFrancPortug
Spai
40
Unemployment between welfare state and family
Gap in unemployment rate between prime age people (the breadwinners) and young people (first job seekers) is larger in EU15 countries where
- job seekers receive a very poor support by welfare state and have to rely only on their households’ support;
- young job seekers can rely for a long time on their parents’ support.
41
A typology of unemployment
Model of family residence
Welfare regime
Extendeddependence
Intergenerational autonomy
Sub-protective Italy, Spain
Minimal Ireland UK
Employment centred
France, Germany, Belgium
Universalistic Denmark, Sweden
(Gallie-Paugam, 2000)
42
A case of societal analysis•Who exits unemployment?The problem:which impact on transition from
unemployment to employment have personal characteristics?
and in particular education
Two events:job seekers with and without
working experience
43
Britain vs. ItalyFor two countries & both the
events a gendered model of exit from
unemployment, stressing the impact of:
- age,- class of origin (last occupational class)- education /vocational training,- living with parents / family status(Bernardi, Layte, Schizzerotto, Jacobs 2000)
44
Cross-national / cross event analysis
• For each country, the outcomes of the models are explained referring to how its labour market regulation, family system, welfare regime are working.
• Then, the national scenarios are compared to emphasize cross-national variations in the impact of personal characteristics.
45
Methodological issues
No single model including country as an independent variable, but separate national models
• Forced research designnational datasets: different, although alike
• Choicefocus on societal coherence
46
The impact of education
• Higher education promotes exit - in UK both for first-job seekers and job losers; - in Italy for job losers, but not for first-job seekers.
• As first-job seekers = youths, those results confirm the cross-national position of UK and Italy concerning variation in youth unemployment by education.
47
A moot explanation • As in both countries the signalling effect
by vocational education is null, authors focus on variation in the labour market regulation.
• In Italy, + regulation → + protection for (adult)
insiders → collectivist exclusion for youth outsiders
Butthis relation cannot be checked at a micro-level
48
A tale of Italy as a strictly regulated labour market
• Employed prime age people (the insiders) are supposed to be over-protected by labour laws preventing young first job-seekers (the outsiders) from being hired in their place.
• Such a hypothesis in grounded on- A very high ranking in the Oecd
EIP- A very low number of job losers
among unemployed people
49
A new evidence
•2004 revised EIP puts Italy at the lowest rungs in Europe,
•work-turnover in Italy is among the highest in Europe- this does not clash with a poor number of job-losers if most of them were able to find a new job very quickly
50
Coming back to a micro-grounded explanation
• From an economic point of view, the oversupply of highly educated youth.
• From a social point of view, highly educated young job-seekers are able to be sheltered long time by their parents.