Behind the Job Miracle

Transcription

Colloque La réévaluation de la stratégie de
l’OCDE pour l’emploi : diagnostic, limites et
enseignements pour la France
Behind the Job Miracle
Tito Boeri
(Bocconi University and fRDB, IZA, and CEPR)
Centre de conférences internationales – 16 et 17 novembre 2006
1994 OECD Jobs Study
• “The labour market has become
particularly worrying in Europe…
• slow employment growth has always been
a feature of the Efta and EC regions…
• there are indications that employment has
been unusually weak vis-à-vis output
growth…
• In the EC employment growth has been
generally sluggish….”
La réévaluation de la stratégie de l’OCDE pour l’emploi : diagnostic, limites et enseignements pour la France
16 & 17 Novembre 2006 - Centre de Conférences Internationales, Paris.
Since then…
Employment to population rates and the distance from Lisbon
(North-America)
1995
2005
SE AUT
DE pour
PTl’emploi
FI : diagnostic,
FR
LU
GR IE pour IT
ES
DK
La réévaluation
de la UK
stratégieNL
de l’OCDE
limitesBE
et enseignements
la France
Source: Eurostat
From jobless growth to
growthless job creation?
3
Spain
2
Ireland
1
Netherlands
apparent elasticity
in the US
Finland
Greece
Italy
Belgium
Portugal
United Kingdom
France
Luxembourg
Denmark
Sweden
0
% yearly change in employment rate
4
1994-2005
Austria
Germany
0
2
4
6
8
yearly
in real limites
GDP et enseignements pour la France
La réévaluation de la stratégie de%
l’OCDE
pour change
l’emploi : diagnostic,
empl_year
Y1
Outline
• Why growthless job creation? Which type
of jobs are they?
• The role of reforms of employment
protection at the margin, changing rules
only for new hires. Evidence on the
honeymoon effect
• Issues of sustainability (also social and
political). Strategies coping with the
dualism: should we have a tenure-track?
Why growthless job
creation?
Two potential explanations:
1. Productivity: Reforms reducing unemployment
benefits and minimum wages made more lowskilled workers marketable. It implies increased
employment of low skilled workers
2. Flexibility: Employers exploit flexibility at the
margin, hiring workers under temporary
contracts. It implies increased employment of
temporary workers.
% of total employment growth
Contribution to employment
growth of unskilled labour and
temporary employment
300
250
200
150
100
50
0
-50
Belgium
Spain
Italy
Netherlands
Portugal
-100
countries
Workers
with primary
andl’emploi
low education
La réévaluation
de la stratégie
de l’OCDE pour
: diagnostic, limites Temporary
et enseignementsworkers
pour la France
The mechanism: a Honey Moon
Effect (2006 with Garibaldi)
Under good times a “buffer stock” is built-up. Hiring of Temps. Under bad
times temps are laid off. Average employment increases unlike standard
models of EPL.
Employment in Good
Times
Temporary
Permanent
Employment in
Bad Times
POST
REFORM
16PRE
& 17REFORM
Novembre 2006 -TRANSITION
Centre de Conférences Internationales,
Paris.
Outline
• Why growthless job creation? Which type
of jobs are they?
• The role of reforms of employment
protection at the margin, changing rules
only for new hires. Evidence on the
honeymoon effect
• Issues of sustainability (also social and
political). Strategies coping with the
dualism: should we have a tenure-track?
More marginal reforms of employment
protection
number of reforms
of reforms
strictness
of EPL
EUNumber
15: EPL
reformsreducing
(decreasing
protection)
40
30
20
10
0
1985-1990
1991-1996
1997-2002
years
Marginal
Radical
Marginal reforms are
two-tier reforms
Radical reforms
Marginal reforms
Employment Growth
Increased After the Reforms
Belgium
Spain
Italy
Netherlands
Portugal
Sweden
Period
92-96
81-85
92-96
92-97
92-95
95-96
Pre Reform
Average Growth
0,91
..
-0,24
1,11
-0,3
-0,77
Period
97-04
85-04
97-04
98-04
97-04
97-04
Post Reform
Average Growth
0,98
3,07
1,29
1,09
1,7
1,19
Source: European Commission and fRDB database
Reforms and the switch from
jobless growth to growthless
job creation
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Summarising
1. Aggregate Employment increased after the
reforms
2. The employment content of growth increased
(involving a declining labour productivity
growth)
3. The contribution to employment growth of
temporary contracts (mainly, but not only, fixedterm contracts) varied between 35% to more
than one-hundred per cent (it occurred even in
countries where regular contracts declined)
Outline
• Why growthless job creation? Which type of jobs
are they?
• The role of reforms of employment protection at
the margin, changing rules only for new hires.
Evidence on the honeymoon effect
• Issues of sustainability (segregation,
unemployment and longevity risks). Strategies
coping with the dualism: should we have a
tenure-track?
Sustainability issues
with two-tier regimes
• Segregation: low flows from temporary to
regular contracts; no carreer prospects
and low human capital investment
• Unemployment risk: buffer stock, high
job instability
• Longevity risk: do temporary workers
acquire enough pension rights?
Fixed-term contracts are for young workers
Probability of moving to permanent contract
about .10 in Italy
Part de contrats précaires, parmi tous les contrats
1
0.9
0.8
Taux de CDD
0.7
France
Danemark
Pays-Bas
Italie
Espagne
Portugal
0.6
0.5
0.4
0.3
0.2
0.1
0
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
La réévaluation de la stratégie de l’OCDE pour l’emploi
: diagnostic, limites et enseignements pour la France
Age
16 & 17 Novembre 2006 - Centre
de Conférences Internationales, Paris.
Panel Européen
Perceived “Job insecurity”.
Concentrated among young
people
This explains why at the aggregate
EPL is negatively correlated
with fear of job loss
Feeling of job security
Horizontal axis: increasing in strictness of EPL;
Vertical axis: increasing in perceived security. A paradox!
Entry wage in relation with the
average wage: Italy 1976-97
Wage distribution of permanent
and temporary contracts
Longevity risk: the annual
pension
of a “co.co.co*“ in Italy
Co.co.co \ progetto
Dipendente
(salario d'ingresso 1000 euro)
Pensione annua
(Euro 2005)
in % all’ultimo salario
Anzianità=40
Anzianità=40
4945
41%
11100
62%
*Tasso di sostituzione
Note: Assuming GDP yearly growth rate of 1,5 and typical wage tenure profile
*(begin working in 1996,at the age of 24 years, monthly net wage 800 €, retire at 65 years after 40 years of work).
A “tenure track”?
• Gradual buildup of protection. To be adapted to
national regulations for regular contracts
• Example. Italy: 3 steps within a permanent
contract :
– probationary period (6 months)
– “engagement” (from the sixth month to the third
year)
– tenure (after 36 months)
• maximum duration of a fixedterm contract: 2
years
• higher contributions to UBs for FTCs
Conclusions
• More jobs because temporary jobs?
• Effects of two-tier reforms in line with
transitional dynamics of standard model of
labor demand with attrition and EPL
reform. Also wage discount is important
• Policy issues: complexity, sustainability
and segregation can be dealt with by
creating tenure-track

Behind the Job Miracle

Transcription

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