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Labour market shortages in times of unemployment

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Presentation by Joost Bollens (Academic researcher, HIVA - Research Institute for Work and Society, Catholic University of Leuven) on the occasion of the EESC LMO meeting on Labour market shortages in ...

Presentation by Joost Bollens (Academic researcher, HIVA - Research Institute for Work and Society, Catholic University of Leuven) on the occasion of the EESC LMO meeting on Labour market shortages in a period of unemployment of 16 November 2011.

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Labour market shortages in times of unemployment Labour market shortages in times of unemployment Presentation Transcript

  • Labour market shortages in times of unemployment Joost Bollens HIVA K.U.LeuvenDesign Charles & Ray Eames - Hang it all © Vitra
  • Labour market shortages• Some figures & facts• Causes & explanations• Some possible policy answers 22-11-2011 2
  • Preamble : why it matters• Potentially very high cost – Unemployment • Productive capacity that remains idle • Unemployment benefits, activation cost • Effects on well-being – Unfilled (or hard to fill) vacancies • Less production • Lower income for society (taxes, social security,…) • Hampers innovation and growth• Estimate : 7% of GDP 22-11-2011 3
  • Quarterly job vacancy rate (NL)3.53.02.52.01.51.00.50.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 22-11-2011 4
  • Quarterly unemployment rate (NL)7.06.05.04.03.02.01.00.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 22-11-2011 5
  • Unemployment & Vacancy rates (NL)7.06.05.04.03.02.01.00.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 22-11-2011 6
  • Business cycle effects• Vacancies : leading• Unemployment : lagging → Sometimes both series will move in the same direction → It is not necessarily “unnatural” to observe increasing vacancy rates (≈± shortage) and rising unemployment at the same time (also : leading and lagging economic sectors) 22-11-2011 7
  • Unemployment & vacancy rates (Germany)9.08.07.06.05.04.03.02.01.00.0 2010 2011 22-11-2011 8
  • Unemployment & vacancy rates (Sweden)10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2009 2010 2011 22-11-2011 9
  • Unemployment & vacancy rates (Czech Rep.) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2008 2009 2010 2011 22-11-2011 10
  • Unemployment & vacancy rates (Spain) 25.0 20.0 15.0 10.0 5.0 0.0 2009 2010 2011 22-11-2011 11
  • Macro versus micro• Until now : aggregate level (labour market)• But also imbalances for specific subgroups: – Occupations – Qualification and/or skill – Economic Sectors/Industries – Regions – Age groups –… 22-11-2011 12
  • Hard-to-fill jobsTop 10 jobs employers are having difficulty filling , Europe*, 2006-2011 Comparison 2006 2007 2008 2009 2010Skilled trades workers 2 1 1 1 1Technicians 10 2 2 3 3Engineers 7 3 4 4 6Sales representatives 1 4 6 2 2Managers/executives 8 6Drivers 5 5 3 5 4Secretaries, personal assistants, administrative assistants & office support 8 9 6 9 staffProduction operators 3Laborers 8 5 7Mechanics 7 10Source : Manpower Group, 2011 Talent Shortage Survey Result 22-11-2011 13
  • Hard-to-fill vacancies : reasons (1/2)• “Quantitative” : Too few (or no) job seekers available for the post (e.g. “engineers”, “nurses”)• “Qualitative” : Enough applicants, but lacking certain qualities – Lacking required skills/qualification/experience : “skill shortage” – Other perceived qualitative inadequacies (motivation, work attitude,…) 22-11-2011 14
  • Hard-to-fill vacancies : reasons (2/2)• Nature of the job: employment conditions, unattractive work (low wage, health, safety, stress, working time, work-life balance, training opportunities,…), bad reputation,…• Overlapping• Unrealistic requirements? 22-11-2011 15
  • Evolution? (for Flanders, Belgium) Occupations with hard-to-fill vacancies according to reason (Vlaams Gewest, data: VDAB) 8 11 8 8 11 10 10 9 10 14 14 22 20 21 18 25 20 22 51 47 46 57 70 69 70 72 65 66 64 41 42 44 352000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Quantitative Qualitative Employment conditions 22-11-2011 16
  • Is the problem getting worse?• Recent evolutions that (possibly) explain why currently some imbalances are becoming more severe than what used to be the case 22-11-2011 17
  • Technological change• 1990s : Skill biased technological change – bias in favour of skilled workers• Job polarization? Technology replaces labour in routine tasks (+) Well-paid skilled jobs (non-routine cognitive skills) (+) Low paid least skilled jobs (non-routine manual skills) (e.g. cleaning) (-) Middle jobs : routine man. & cog. skills 22-11-2011 18
  • Globalization• Import low-skill-commodities from low wage countries instead of producing them here: relative demand for unskilled labour decreases• More realistically : import commodities and services for which place of production does not matter: e.g. canned food vs fresh food, but also software development vs nursing. Low skill? High skill? Routine or non routine? 16 november 2011 Joost Bollens 19
  • Demography and other• Demography – Baby boomers are reaching retirement age – Active population decreases, difficulties to replace retired• Short time work arrangements – Temporary adjustment of working hours instead of dismissals – Labour hoarding more important in firms with high skill intensity – Effect on composition of unemployment? 22-11-2011 20
  • How to solve?• Many parties involved, they have to act together (employers, individual workers, social partners, central and regional governments and EU, PES, education & training sector, industries/sectors,…).• Sense of urgency? ↔ Piecemeal development• No one-size-fits-all solution – Quantitative vs. Qualitative vs. Employ. Conditions – Specificity : sectoral, occupational level 16 november 2011 Joost Bollens 21
  • Education & training– Dis/incentives for choice of specific study fields?– Making curricula more responsive towards labour market needs?– Qualifications or skills?– Recognition of non-formal/informal learning– Promote standing of vocational education– Not only at “the age of 20”. Make “LLL for all” a reality (avoiding skill obsolence, but much more)– Over-qualification discussion : too many university graduates (…) 16 november 2011 Joost Bollens 22
  • Employers• Change recruitment practice – Use more channels – Look for workers in other regions, or move plant? – Migrant workers (but 1 & 2) – …• Change working conditions• Change work organization – Drop/reduce hiring standards and compensate with training of new recruits – Upskill existing employees – Recur to overtime working (… ) – … 16 november 2011 Joost Bollens 23
  • PES & governments• Invest in brokerage role• Invest in effective ALMP’s• Exploit shortage situation to upskill & promote vulnerable groups• Fight l.market discrimination by all (legal) means• Promote mobility of individuals• Invest in anticipating skill needs development• Increase employment rate (e.g. (effective) retirement age) 16 november 2011 Joost Bollens 24