ECONOMIC IMPACT OF PRECARIOUS EMPLOYMENT

Daragh McCarthyNERI (Nevin Economic Research Institute)Daragh.McCarthy@nerinstitute.net www.nerinstitute.net

The Case for Decent Work, UNITE, 23 July 2015

O V E R V I E W

I. P ro fi l e o f w o r ke r s i n p re c a r i o u s

e m p l o y m e n t

II. I m p a c t o f p re c a r i o u s e m p l o y m e n t o n

w o r ke r s

III. I m p a c t o f p re c a r i o u s e m p l o y m e n t o n

t h e w i d e r e c o n o m y

IV. C o n c l u s i o n

PROFILE OF WORKERS IN PRECARIOUS EMPLOYMENT

PERMANENT & F IXED-TERM CONTRACTS Percentage of all employees, average 2011 - 2012

AUT BEL DNK FIN FRA DEU GRC IRL ITA LUX NLD PRT ESP SWE GBR0

10

20

30

40

50

60

70

80

90

100 Permanent Contracts All fixed term contracts

F IXED -TERM CONTRACTS AMONG NEW H IR ES

Percentage of employees with no more than three months tenure

GBR DNK AUT LUX BEL IRL DEU GRC FIN ITA NLD FRA SWE PRT ESP0

10

20

30

40

50

60

70

80

90

100 2011-12 2006-07

REASON FOR HAV ING F IXED TERM CONTRACT

Percentage of employees with a fixed term contract, excluding students & apprentices, 2011 - 2012

ESP GRC PRT IRL BEL ITA FIN DNK GBR FRA SWE LUX DEU NLD0

20

40

60

80

100

120Did not want a permanent job Probationary period Could not find a permanent job

TEMPORARY EMPLOYMENT BY AGE GR OUP

Percentage of employees with a fixed term contract, 2011 - 2012

ESP

PRT

SWE

FRA

DEU

ITA

NLD

FIN

LUX

AUT

IRL

BEL

DNK

GBR

AUS

0 5 10 15 20 25 30 35 40 45 50 55 60 65

(55-64)

(25-54)

(15-24)

NON-STANDAR D EMPLOYMENT BY EDU ATTA INMENT

Employees aged 15 – 64 excluding employers, student workers and apprentices.

  Lower educated Middle educated Higher educated

GRC 61.6 37.5 26.6

DEU 60.4 36.9 32.7

NLD 59.8 59.5 54.1

AUT 54.6 32.4 34.5

ESP 50.0 40.0 33.0

IRL 48.7 40.4 26.8

BEL 43.3 38.4 35.0

ITA 43.1 37.9 41.0

GBR 41.9 35.1 29.1

SWE 41.4 34.8 30.6

FRA 40.0 34.1 30.7

FIN 38.4 31.0 23.5

PRT 36.8 30.6 31.4

DNK 35.7 28.0 23.9

LUX 29.8 28.6 25.4

SHARE OF WOMEN IN NON-STANDARD EMPLOYMENT

Percentage of employees with a fixed term contract, 2011 - 2012

LUX

AUT

DEU

NLD

BEL

FRA

SWE

DNK

GBR

FIN

IRL

ESP

ITA

PRT

GRC

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

TEMPORARY EMPLOYMENT BY OCCUPAT ION

Employees aged 25 - 54, 2011 - 2012

 Managers & professionals

Clerical, services & sales

Skilled Agric, craft & machine ops

Elementary occupations

ESP 19.0 21.4 24.7 40.2

PRT 19.2 17.6 18.3 27.7

NLD 10.8 15.3 14.6 23.0

FIN 13.4 13.6 7.4 20.1

ITA 10.1 11.9 10.6 21.0

SWE 9.3 16.3 9.6 25.7

FRA 8.8 12.1 13.0 21.0

GRC 6.9 8.5 11.1 29.3

DEU 9.5 9.1 8.0 13.8

IRL 6.4 8.3 7.3 11.8

DNK 7.4 7.6 4.2 7.5

BEL 5.9 6.6 5.8 11.7

LUX 5.9 5.8 4.6 6.9

AUT 6.7 3.9 3.3 5.3

GBR 3.7 4.5 4.2 6.1

IMPACT OF PRECARIOUSEMPLOYMENT ON WORKERS

WAGE PENALTY FOR NON-REGUL AR EMPLOYEES

Estimated average difference in hourly wages between full-time non-regular and permanent employees. Wage penalty for non-regular employees expressed as a percentage of the wage of permanent employees

AUS AUT BEL CZE EST FRA DEU HUN ITA LUX POL PRT ESP SVK GBR-20

-15

-10

-5

0

5

10

Men Women

TRANS IT ION FROM TEMPORARY TO FULL T IME

Percentage share of employees in 2008 that were employed as full-time permanent employees in 2011

NLD GRC EST ESP IRL ITA AUT BEL PRT SWE LUX GBR FIN0

10

20

30

40

50

60

TEMPORARY WORKERS & TRAIN INGEstimated percentage effect of temporary contract status on probability of receiving employer sponsored training, 2012

FRA ESP DNK BEL NLD FIN SWE AUT IRL GBR DEU AUS-30

-25

-20

-15

-10

-5

0

5

IMPACT OF PRECARIOUSEMPLOYMENT ON THE ECONOMY

IMPACT OF PRECARIOUS WORK ON THE ECONOMY

I. C o n s u m p t i o n & d o m e s t i c d e m a n d

II. I n c o m e I n e q u a l i t y a n d e c o n o m i c g ro w t h

III. S k i l l s p ro fi l e , t r a i n i n g a n d l o s t

p o t e n t i a l

DOMEST IC DEMAND

'97,

Q1

'97,

Q4

'98,

Q3

'99,

Q2

'00,

Q1

'00,

Q4

'01,

Q3

'02,

Q2

'03,

Q1

'03,

Q4

'04,

Q3

'05,

Q2

'06,

Q1

'06,

Q4

'07,

Q3

'08,

Q2

'09,

Q1

'09,

Q4

'10,

Q3

'11,

Q2

'12,

Q1

'12,

Q4

'13,

Q3

'14,

Q2

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

At constant market prices (seasonally adjusted)

INCOME INEQUAL ITY AND GROWTH, 2008 - 2012

20 25 30 35 40 0

0

0

Inequality (Gini coefficient)

Ave

rage a

nnual gro

wth

rate

of

GD

P p

er

capit

a

(2008-1

2)

%

ROLE OF MOB IL I TY IN THE L ABOUR MAR KET

I. G a t e w a y o r t r a p ?

II. Pa t h t o n e w j o b s o r r e p l a c i n g ex i s t i n g ?

III. L i f e t i m e e a r n i n g s a n d s k i l l

d e v e l o p m e n t

TRANS IT ION FROM TEMPORARY TO FULL-T IME

Percentage share of employees in 2008 the were employed as full-time permanent employees in 2011

NLD GRC EST ESP IRL ITA AUT BEL PRT SWE LUX GBR FIN0

10

20

30

40

50

60

IMPACT OF PRECARIOUS WORK ON THE ECONOMY

L e s s t h a n 5 0 % o f w o r ke r s o n t e m p o r a r y

c o n t r a c t s i n a g i v e n y e a r w e re e m p l o y e d

w i t h f u l l - t i m e p e r m a n e n t c o n t r a c t s t h re e

y e a r s l a t e r

TEMPORARY WORKERS & TRAIN INGEstimated percentage effect of temporary contract status on probability of receiving employer sponsored training, 2012

FRA ESP DNK BEL NLD FIN SWE AUT IRL GBR DEU AUS-30

-25

-20

-15

-10

-5

0

5

EMPLOYER SOC IAL SECUR ITY CONTR IBUT ION

Tax wedge composition 2013

FR

IT

SE

BE

ES

AT

EL

PT

FI

DE

LU

UK

IE

NL

0 5 10 15 20 25 30 35%

ROLE OF MOB IL I TY AND L I FET IME EAR N INGS

I. T h re e q u a r t e r s o f s h o r t - t e r m e a r n i n g s

i n e q u a l i t y i s p e r m a n e n t

II. L i f e t i m e e a r n i n g d i ff e re n t i a l s

e s t a b l i s h e d i n fi r s t 1 0 y e a r s o f a c a re e r

t o a l a r g e ex t e n t

C O N C L U S I O N

I. G a t e w a y o r t r a p ?

II. Pa t h t o n e w j o b s o r r e p l a c i n g ex i s t i n g ?

III. L i f e t i m e e a r n i n g s a n d s k i l l

d e v e l o p m e n t