Transcript Slide 1

(UN)EMPLOYMENT, YOUTH AND
EDUCATION
Can it help explain the current
mitigated growth of unemployment
(and does it affect inequality) ?
Wiemer Salverda
7 July 2010
LLAKES
International Conference London
www.uva-aias.net
0.
Summary & lay out 1
The current increase in the unemployment rate seems
significantly smaller than warranted by the depth
of the financial crisis
An important question is whether this is due to a
changing functioning of labour markets
Particularly relevant for today’s meeting is the
potential contribution of a changing youth labour
market in conjunction with expanding
educational participation
2
0.
Summary & lay out 2
The modesty of unemployment growth is a contention
based on a historical perspective, i.e. in
comparison to previous downturns: is it true?
(dust has not settled yet)
There are good reasons to think that labour markets
may have changed indeed:
- growth of female participation, and skills;
- shifts to part-time jobs, and to services;
- changes in policies and regulations
Youth & education is at best part of the story (women
and households!), but it is also part of policy making
vis-à-vis the labour market (work/train up to 27
years) and the current crisis (200 mln for education)
3
0.
Summary & lay out 3
1)
Comparison of downturns since 1970 & labourmarket effects
[delineation & measurement are not trivial]
2) Youth labour market:
within this market & relative to the rest
and in conjunction with education
3) International comparison
Focus of 1) and 2) is the Netherlands [familiar &
illuminating] with forays into international
comparisons sub 3) [also not trivial]
4
1.
–
–
Comparison 1
Choice of a downturn indicator:
- volumes of GDP (short-lived),
- GDP/capita (over time and cross-country),
- investment (closer to behaviour), or
- unemployment rate (closer to labour-market
effects) ?
Measurement of downturn duration:
- decline only (= peak-to-trough), or
- all that remains below initial level (= inclusive of
recovery  “full-period”) ?
-----------------------– International data source: OECD, Economic Outlook
– Quarterly data: within-crisis detail, most up to date
5
1.
Comparison 2
Timing: GDP, GDP/capita, investment, unemployment%
1. 1971Q21977Q3
(29)
2. 1979Q31985Q2
(24)
3. 1992Q11995Q3
(15)
4. 2000Q12007Q4
(32)
5. 2008Q3(2009Q4)
(6+)
6
1.
Comparison 3
Investment changes over the downturns by nature of
the time focus
Quarterly averages, NLD (%)
1. 1970s 2. 1980s 3. 1990s 4. 2000s 5. Now
Full-period
-0.0
-0.0
-0.3
-0.1
-3.5
29
24
15
32
6+
Peak-to-trough
-0.9
-1.8
-1.1
-1.7
-3.5
Down/up in Q?
20/9
13/11
10/5
12/20
6/0
First 6
quartiles
-2.5
-1.8
-1.5
-1.0
-3.5
Speediest year
-3.7
-3.1
-2.4
-3.3
-4.6
1
7
5
9
2
How many Q?
Start in Q?
7
1.
Comparison 4
Other economic variables, changes over the first 6
quartiles (currently available): widespread effects
Quarterly averages, NLD (%)
1. 1970s 2. 1980s 3. 1990s 4. 2000s 5. Now
Prices
2.0
1.7
0.6
1.1
-0.0
Consumption
1.0
0.1
0.2
0.6
-0.5
Imports
0.6
-0.6
-0.1
2.0
-1.5
Exports
1.9
-0.2
0.5
2.0
-1.4
Balance (pcpt)
0.3
-0.2
0.4
-0.2
0.4
Savings /NNI
n.a.
n.a.
-0.1
-0.1
-1.1
(pcpt) (N.Acc.)
8
1.
Comparison 5
Labour variables, changes over the first 6 quartiles:
going low and high
Quarterly averages, NLD (%)
1. 1970s 2. 1980s 3. 1990s 4. 2000s 5. Now
Productivity
1.4
0.1
0.0
0.1
-0.5
Real wages
1.8
-0.2
0.4
0.0
0.8
Real unit
labour costs
0.1
-0.0
0.2
-0.1
1.4
9
1.
Comparison 7
Labour-market variables, changes over the first 6
quartiles: also deep (1970 relates to productivity growth)
Quarterly averages, NLD (pcpt)
1. 1970s
2. 1980s
3. 1990s
4. 2000s
5. Now
U-rate
0.22
0.14
0.18
-0.11
0.22
UPOP
0.15
0.10
0.14
-0.08
0.17
EPOP
-0.30
-0.10
0.04
0.25
-0.26
EPOP-FTE
-0.64
-0.16
0.08
0.27
-0.24
10
1.
Comparison 8
Over the downturns the employment FTE-volume
falls, but relative to GDP/capita much less this time
First 6-quartile changes, NLD (%)
6
3.8
4
2
0
-2
-1.7
-4
-6
-5.4
-5.6
-8
-7.7
GDP/capita
EPOP-FTE
Difference
simulations
-10
1-1970s
2-1980s
3-1990s
4-2000s
5-now
5 as 1-4
5 as 2-4
11
1.
Comparison conclusions
– For the future a prolonged and relatively deep
downturn cannot be ruled out
– Differences to previous downturns are intense and
are broad: declining investment, savings, trade and
productivity, risk of deflation - extending much
beyond (un)employment
– (Un)employment effects are as significant as before
and modest only relative to the extent of the current
downturn
12
2.
Youth 1
– Strong overall employment growth together with
significant demographic changes in employment
over recent decades
– Particular shifts for youth: part-time explosion,
rapid flexibility growth
– Radical change in educational participation
13
2.
Youth 2
Youth employment: explosion of part-time jobs (women
mainly participated more)
Part-time share of jobs by gender and age, %, NLD, 1979—2009
80
70
60
50
40
30
Youth
Adult men
Adult women
20
10
0
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009
14
2.
Youth 3
The explosion is in small jobs, now 40% of all jobs;
without part-time growth youth EPOP had declined
Youth head-count EPOP by working hours, %, NLD, 1987—2009
80
70
60
50
40
30
<12
20
12-19
20-34
10
35+
0
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
15
2.
Youth 4
Important youth role in overall changes 1987--2009: all
small jobs, may flexible jobs, strong FT decline
Employment change by age, weekly hours and contract type, x1000, NLD
3000
15-24
2500
2434
15-64
2000
1429
1392
1500
838
1000
500
375
343 317
111
350
345
119
61
0
-500
-183
-396
-1000
16
2.
Youth 5
Part-time employment and low pay now virtually
overlap (and, 4065% youth); unchanged for full-time
Incidence of low pay among part-time and full-time, %, NLD, 1979—2009
30
25
70%
20
15 Part-time +10%
24%
10
uren-gebaseerd (+5%)
Allen + 7%
Full-time + 0%
5
17
1970
1975
1980
1985
1990
1995
2000
2005
2.
Youth 6
Demographic shift in volume of employment: adult
women replacing youths, adult men unchanged
Employment FTE1,5 by gender and age, %, NLD, 1985—2009
100%
80%
60%
40%
15-24
20%
W25-64
M25-64
0%
18
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2.
Youth 7
Full-time equivalent youth employment rate has
actually declined, full-time jobs hit strongly
Youth hours-count EPOP by working hours, %, NLD, 1987—2009
80
<12
70
12-19
20-34
35+
60
50
40
30
20
10
0
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
19
2.
Youth 8
Youth employment now largely (2/3rds) overlaps with
participation in education
Youth population by activity, 1998-2007, NLD (% of youth)
5
6
5
4
6
3
6
3
6
3
7
5
6
6
6
6
28
28
28
28
29
26
25
24
5
4
5
4
24
23
NEET
Unemp
Emp
32
35
41
42
42
43
42
41
42
45
Overlap
Emp-Edu
29
1998
28
1999
22
21
21
20
22
23
24
22
2000
2001
2002
2003
2004
2005
2006
2007
EDU
20
2.
Youth 9
Small jobs are very important (60%) for the
educational overlap, and vice-versa (96%)
Employment/Education overlap by hours, x1000, 15 24, NLD, 2001 2009
1000
900
800
700
600
500
400
300
35+
20-34
200
12-20
100
<12
0
21
2002
2003
2004
2005
2006
2007
2008
2009
2.
Youth 10
Employment growth diverges depending on
educational participation
Annual FTE change (%), employed youths, NLD, 2003-2009
8.0
6.0
4.0
1.4
2.0
1.7
0.0
-0.8
-2.0
-4.0
-6.0
-6.4
-6.3
-6.0
In education
Not in education
-7.2
-8.0
2003
2004
2005
2006
2007
2008
2009
22
2.
Youth 11
Dotcom and financial crisis: employment effects are
strongly diverging between full-time and part-time
Employed by age and full/part-time, NLD, peak quartile = 100
125
25-64 PT
15-24 PT
100
25-64 FT
2009Q4
2009Q2
2008Q4
2008Q2
2007Q4
2007Q2
2006Q04
2006Q02
2005Q04
2005Q02
2004Q04
2004Q02
2003Q04
2003Q02
2002Q04
2002Q02
2001Q04
2001Q02
2000Q04
2000Q02
75
1999Q04
15-24 FT
23
2.
Youth 12
Youth employment: more hours sought than supplied,
longer hours than in jobs, fluctuating in full-time
Unemployed by hours of work sought, x1000, 15—24, NLD, 1996—2009
120
100
80
60
40
20
12-20
20-35
35+
0
24
2.
Youth 13
Youth employment: more hours sought than supplied,
bring both on a FTE basis
Average hours unemployed and employed youth, NLD, 1996—2009
35
Employed
Unemployed
30
25
20
15
25
2.
Youth conclusions
– Clearly there is a longer-time (FT) employment
problem for youth
– Educational participation has become essential to
youth employment, and by its overlap with
employment it is hiding unemployment problems
– Thus its contribution to mitigating the labourmarket effects of the current crisis is not so much
that they withdraw in education and but that they
continue working for much fewer hours.
– A growing discrepancy of job seeking to job supply
26
2.
Youth conclusions
A more general effect of part-time employment.
We need to adapt the definition of the unemployment
rate, at least accounting for working hours
Adapt the standardised Urate: use FTE-employment for
the denominator
Still then the effect of the crisis remains modest
Quarterly averages 1st 6 quartiles, NLD (pcpt)
1. 1970s
2. 1980s
3. 1990s
4. 2000s
5. Now
U-rate
0.22
0.14
0.18
-0.11
0.22
U-rate FTE
0.29
0.18
0.29
-0.21
0.34
27
3.
International 1
Youth overlap is much larger in the Netherlands and
Denmark
Youth population by activity, 2007, 14 countries (% of youth)
100
10
90
6
6
7
6
80
15
10
21
18
70
60
9
13
14
6
5
27
10
8
8
21
8
12
5
6
7
8
9
9
12
33
21
15
8
29
33
4
6
17
23
Unemp
28
27
44
45
40
28
Emp 14.9
23
25
30
57
56
20
38
51
52
38
31
23
10
Overlap
Emp-Edu
47
39
35
NEET
10
3
50
14
10
23
24
22
13
17
5
4
39
23
22
EDU
0
BEL
DNK
DEU
IRL
GRC
ESP
FRA
ITA
NLD
AUT
PRT
FIN
SWE GBR
28
3.
International 2
Youth overlap is growing rapidly in many countries,
including Netherlands and Denmark
Youth population by activity, 2007, 14 countries (% of youth)
45
8
40
10
35
Growth
3
30
3
25
14
20
10
36
35
15
1
13
29
8
24
10
5
6
18
11
13
6
0
9
8
0
-3
7
10
14
0
6
Level
1999
-3
-5
BEL DNK DEU
IRL
GRC
ESP
FRA
ITA
NLD AUT PRT
FIN
SWE GBR
29
3.
International 3
Women and youth trading places in jobs volume
FTE1,5-Employment shares by age and gender, international, 1987-2009
20
M 25-64
W 25-64
15
Youth
10
5
0
-5
-10
-15
EU15 BEL DNK DEU
IRL
GRC ESP
FRA
ITA
NLD AUT PRT
FIN
SWE
UK
30
3.
International 4
Negative effects on youth employment everywhere
albeit with significant differences
FTE1,5 employment-population rates, divergence of youth to M25-49,
international (peak quartile = 100)
20
AUT
15
EU15
10
BEL
DNK
5
0
-5
DEU
GRC
ESP
FRA
-10
ITA
-15
NLD
-20
PRT
SWE
-25
UK
-30
IRL
FIN
-35
31
3.
International 5
Swedish EPOPs suffered and never fully restored, and
youth bore the brunt, in contrast with Japan
Employment-population rates, 1998-2007 (%)
Sweden
Japan
95
95
90
90
15-24
15-64
85
85
25-54
55-64
80
80
75
75
70
70
65
65
60
60
55
55
50
45
15-24
40
25-54
50
15-64
45
55-64
40
35
35
1971
1977
1983
1989
1995
2001
2007
1971
1977
1983
1989
1995
2001
200732
4.
Conclusions
In the end, do we want all youths to remain in
education ?
Youth are likely to pay a dramatic bill; think about
intergenerational effects of inequality
For crisis management look beyond the financial
markets to include labour-market effects, esp. for
youths:
Sweden (rapid restoration of banks and stock
market but permanent employment loss) vs Japan
(never fully restored financial market but also no
marked employment deterioration)
33