Transcript Employment

Impact of Economic and Social
Integration on Employment
in the Context of Enlargement
Study on behalf of DG EMPLOYMENT
by
ÖIR - Österreichisches Institut für Raumplanung (AT)
in association with
IfS Institut für Stadtforschung und Strukturpolitik (DE),
RWI - Rheinisch-Westfälisches Institut für
Wirtschaftsforschung (DE)
Sosiaalikehitys Oy (FI)
The Study
1. Sectoral Case Studies:
• Automotive Industry
• Financial Services
2. Regional Case Studies:
• Finland - Baltic Sea Area
• Saxony - Czech Republic
• Wien - Bratislava - Brno Györ Region
3. Literature Survey
4. Research Needs
Contents of my presentation
1. Impact of Integration on Employment
2. The Context of Enlargement - the Acquis
3. The Employment situation in Europe on the Eve
of Accession
4. Accession related Labour Market Issues
5. Impacts of Accession on the Labour Markets
6. Conclusions - Contribution of Enlargement to
the solution of Employment Problems
1. Impact of Integration on Employment
• Product and capital markets dominant
 Accession will not induce substantial changes to
conditions for trade and capital movements
• European labour markets lag far behind in the
degree of integration
 Low transnational labour mobility
 Different tax and social security systems
 Qualification mismatch similar in all MS
 Institutional, cultural, language barriers
Impact of Integration on
Employment/2
• Integration and positive effects on income and
productivity  low returns on employment
• Even more so
–
–
–
–
in advanced economies
under sluggish demand conditions
in the production sector
under conditions of fast structural change
• Econometric analysis:
– positive, though small long-term overall effect of
integration on employment
2. The Context of Enlargement
• Enlargement - a process and not as an event
• Take account of diversity of the AC (8) size
–
–
–
–
economic structure
development path during transition
geographical position
labour market system
• EES (in the AC)
– JAP
– JIM
– agricultural sector
Steps of European Integration
Single Market
Europe Agreements
Accession AT, FI, SE
Agenda 2000
Euro (WWU) for 12 MS
Accession of 10
Access.: RO, BG, HR?
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
EES
Lisabon Strategie
JAP/JIM
3. Cohesion report
Reform SF
The Acquis and the Labour Markets
• Enlargement as threat to labour market (eg A, D)
• Transitional regulations - free movement of
persons
– treatment of workers from new MS like other foreign
workers
– 2 years + 3 years (review) + 2yrs (serious problems)
• Relief of pressure on governments
• Gateway to co-operation and mutual information
• No transitional regulations in DK, UK
3. The Employment Situation in Europe
on the Eve of Accession
Employment
rates 2001
Employment rates 2001
90
85
80
75
70
65
60
55
50
45
40
35
30
Unemployment rates 2001
Unemployment rates 2001
25
m
m
total
f
total
f
total
f
20
m f
Lisbon Strategy Target
15
10
total
m
5
0
1 EU (15)
2
Legend:
3
4 (10) 5
AC
Max. (by country)
average
Min. (by country)
6
1 EU (15)
2
3
4 (10)
AC
5
6
Labour Productivity and Growth
7
LA
Real growth
LI
2001/2003 in % p.a.
6
ES
5
IRL
4
SK
HU
AC(8)
SI
3
CR
UK
2
PL
DK
1
FIN
EU(15)
AT
IT
DE
0
30
40
50
60
70
80
90
100
110
120
130
GDP/employed person
EU(25)=100
140
The Employment Situation in Europe
on the Eve of Accession
• Major differences between MS and AC
• Levels of indicators
• Gender differences
• Economic growth pattern
• Labour Market Policy
• Liberal vs.welfare state approach
• Active labour market policy still little developed
• Expenditure levels much lower (about 1/5 relative to GDP)
• Employment Strategy
• Jobless growth
• Problem groups (young, old, unskilled, minorities)
• More of the same challenges in AC
4. Accession Related Labour Market
Issues
A)
Migration & Commuting
B)
Wages, Productivity and Qualification
C)
The Role of FDI
D)
Regional differentiation
A: Migration
• Migration between the AC (10) and EU (15) does
not seem to be an issue
– not in the past and even less so in the future
– neither for MS nor for the AC
• Predictions are hard to make, especially if they
concern the future.....
– Brücker: 318.000 p.a., 154.000 - 217.000 to Germany
– UK expect 200.000 p.a. because of openness
– Motives? Destination?
A: Cross-border Commuting
• Cross-border commuting already observable
• Figures are fiction!!
• Commuting potential already partly utilised
• Future commuting depends on
•
•
•
•
transport infrastructure and transport cost
short term fluctuations in labour demand
handling of the transitory regulations
the progress of real wage convergence
B: Wages, Productivity and
Qualification of Labour Force
AC - compared to EU(15)
Wages (nom)
20-40%, 
Productivity
much lower
Unit costs
comparable
Qualification
largely equivalent (esp. Manuf.)
Employment
 - due to qualification upgrading
Striking:
 growth of wages for skilled employees
shortages of high skilled employees
For mobile/highly skilled AC labour force
neighbouring labour markets are no more
particularly attractive
C: The Role of FDI
• Contribution to the restructuring processes
• Market access
• non-tradable sector
• manufacturing with low labour cost relevant (1/5)
• Increase in volume expected
• Crucial for convergence
• technology
• wages
• employment (more jobs in foreign owned companies,
domestic companies cutting back employment)
The Role of FDI/2
• Locational strategies of AC are
– heading for high tech in all AC
– not for low wage/labour intensive investment – match with entrepreneurial behaviour
• (Small scale) FDI across the border have
helped SME to enhance or maintain their
competitiveness on the global and local
markets
D: Regional Differentiation
• Need for regional differentiation
• within the AC
• concerning the different border section
• Challenge for cohesion policy on national but
also European level
• Prosperity edge “moves” into the individual AC
• more visible/pronounced in the employment figure than
in economic performance/GDP
5. Impacts of Accession on the Labour
Markets
 in trade (declining transaction cost)
 Cross-border market integration will benefit most
• through arbitrage processes
• leading to speedier convergence in the AC border regions
 of structural change within AC
 regional disparities on the nat. labour markets
 necessity for cross-border co-operation of labour
market institutions
6. Conclusions
• Challenges for LM similar in AC and MS
• Employment challenges remain on national
level - impact predominant in border regions
• Transitional arrangements are politically
important but economically meaningless
• Regional differentiated approach is needed for
employment policies
• Integration+enlargement is part of the solution,
not the problem
The Contribution of Enlargement to
the Solution of Employment Problems
• Effects on the macro level
• Opportunities on the micro level
• The contribution of European Employment
Policy
• Cross-border labour markets emerging
Employment rate and productivity
Employment
rate
75
70
CY
65
LA
60
ES
LI
PL
55
CR
SI
SK
HU
50
45
40
35
30
30
40
50
60
GDP/employed person,
EU(25)=100
70
80
90