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Recent developments in atypical work in Europe with focus on temporary contracts


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Presentation by Donald Storrie (Representative of Eurofound) on the occasion of the EESC LMO conference on "Typical and atypical work contracts - advantages and disadvantages from the labour market …

Presentation by Donald Storrie (Representative of Eurofound) on the occasion of the EESC LMO conference on "Typical and atypical work contracts - advantages and disadvantages from the labour market perspective" in Warsaw, Poland, on 8/9 April 2013.

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  • 1. "Recent developments in atypical work inEurope with focus on temporary contracts" 8-9 April 2013 in Warsaw Donald Storrie, Head of the Employment and Change Unit Eurofound
  • 2. Various definitions of non-standard or atypical workMost generally as NOT full time dependent employment witha contract of indefinite durationILO World of Work Report (and Eurofound)– part time or temporary employment or self employed onown accountWorld Bank – part time and temporary wage employmentIncreasingly blurred distinctions especially between selfemployment and wage employment.Precarious work?
  • 3. Non-standard employment accounts for 33% of employment in OECD and 40% in Poland OECD Poland25201510 5 0 Temporary Part Time Self Employed
  • 4. NSE has not increased by as much as is commonly believedIt was already significant in 1980sOECD1985 – 1995 2 percentage points1995 – 2010 1.5 percentage pointsPoland1995 – 201027 to 40 percent
  • 5. No major increase in temporary jobs in Europe since 2001 EU-27: levels of employment and unemployment (Y) Thousands Permanent Temporary employment UnemploymentThousands 194.0 30.0 192.0 25.0 Permanent employment 190.0 Temporary employment and 188.0 20.0 unemployment 186.0 184.0 15.0 182.0 10.0 180.0 178.0 5.0 176.0 174.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  • 6. Big increase in Poland … Poland: levels of employment and unemployment (Y) Permanent Temporary employment Unemployment Thousands Thousands 13.0 4.0 3.5 Temporary employment andPermanent employment 12.5 3.0 12.0 unemployment 2.5 11.5 2.0 1.5 11.0 1.0 10.5 0.5 10.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  • 7. 0 5 10 15 20 25 30 PL ES PT NL SI SE FI FR DE CYEU27 IT GR IE AT BE DK HU CZ LU LV MT SK UK EE … to now the highest rate in Europe BG LT RO
  • 8. Very many, very different types of temporary contracts• Fixed term (project)• Probationary• Leave replacement• On-call• Seasonal• Trainee etc.FUNCTIONAL EQUIVILENTS• Some forms of self employment• family workersTemporary agency work is not necessarily on a temporaryemployment contract
  • 9. Sector: Households as employers accounts for most of the Polish higher percentages Households N.Admin & support I.Accomod & food F.Construction A. Agriculture etcG.Wholesale & retail S.Other service C.Manufacturing Poland R.Arts J.Information & com EU-27 M.Prof. activities H.Transport K.Financial/insurQ.Health/social work E.Water supply O.Public admin P.Education L.Real stateU.Extraterritorial org. B.Mining D.Electricity 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00
  • 10. Temporary versus indefinite contracts Wage penalty for temporary work – not for part-time Lower employment security for temporary work Lower self reported work satisfaction Lower provision of training
  • 11. The economics of temporary contracts(+) Flexibility (adjustment costs) Wage cost cuttingand tends to increase employment(-) Lower human capital investment and productivity Insider outsider wage bargainingand tends to decrease employment
  • 12. Non-standard employment : Stepping stones or dead ends?Define very carefully what you mean by a stepping stone toa standard employment. Most meaningful is to ask“Will taking a NSE increase my probability of getting a standard employment”It will depend on:• Type of NSE• Current labour market status• Type of standard employment• Skills and motivation
  • 13. Stepping stones as simple transition ratesYear 1 Year 2 DifferenceTemporary 36% Standard Employment 17%Unemployed 21%Can control for age, sex, education 8%But motivation, experience, precise skills?A relevant research question would be to take the unemployed as point ofdeparture.
  • 14. Research suggests…• Higher transitions for temporary than for self employed and Part-time (voluntary involuntary)• Temporary is not a stepping stone in Spain• But is for some type of temporary in UK• Not better for young• Higher when temporary work is more like a standard employment• (fixed term contracts higher than casual)• (When self employment is like dependent employment?)
  • 15. Defining temporary agency work Authorisation Monitoring AGENCY FeeEmploymentcontract/relationship Commercial contract WageWORKER USER FIRM Labour service/assignment Duration, objective reasons, user sector etc
  • 16. Temporary agency workas % of total employment The average penetration rate in Europe was 1.6% in 201022, up from 1.4% in 200923 but still a little short of the 2008 average of 1.7%24.
  • 17. Why does temporary work increase?1. Widening of the regulation gap between temporary and permanent contracts2. Sectoral employment shifts3. Change in taxes and social security4. Change in the state of the labour marketExplosion of temporary contract in Spain usually seen interms of regulation (1) but also state of the labour market (4)was probably important
  • 18. The state of the labour market. The increase in temporary employment in Sweden in the 1990sSource: Bertil Holmlund and Donald Storrie “Temporary Work In Turbulent Times: TheSwedish Experience” Economic Journal, vol 112 no 480 pp F245-F269 June 2002
  • 19. Lessons for Poland?Must do own national research based on Understanding of what temporary contracts are in Poland – “civil contracts” appear quite original “Stepping-stone” based on proper counterfactuals Better datasets (EU:LFS, SILC)Segmentation (like in Spain) is unambiguously negative