Slides

1. New Approaches to Economic Challenges
HOW GOOD IS YOUR JOB?
MEASURING AND ASSESSING JOB
QUALITY
Sandrine Cazes
OECD Statistics Directorate (STD)
Seminar, 19 September 2014
Alexander Hijzen
OECD Directorate for Employment, Labour and Social Affairs (ELS)
Anne Saint-Martin
OECD Directorate for Employment, Labour and Social Affairs (ELS)

2. 2/30
Assessing job quality
(NAEC Project B2)
• “Jobs, inequality and wages: The role of non-standard
work” (ELS, presented in NAEC Seminar in
February 2014):
− Looks at the drivers of labour market inequalities and how
those translated into earnings and income inequalities.
− Follow-up to the inequality work documented in Divided
we Stand (OECD 2011)
• “Job Quality, Labour Market Performance and Well-
Being” (ELS and STD, the focus of today’s seminar)
− First major output “How is your job?” was published in
Employment Outlook 2014

3. 3
Background and motivation
• Why does job quality matter?
– A key element of individual well-being (i.e. an end in its own right)
– Determines labour force participation, worker commitment and
productivity (i.e. a means to greater economic performance)
• Despite the importance of job quality, it has received limited attention
in the international policy debate
– Assessment of policies and institutions has tended to focus on their
impact on job quantity (e.g. Reassessed Jobs Strategy, Europe 2020)
– Giving more attention to job quality would allow for a more
comprehensive assessment of the role of policies and institutions
• A major obstacle to giving more prominence to job quality has been the
difficulties of defining and measuring it
– Multi-dimensional nature of job quality
– Comparability of job quality indicators over time, across countries
and population groups

4. 4
OECD project on job quality, labour
market performance and well-being
• The aim of the project is to bring job quality to the forefront of the
policy debate on economic performance
– By allowing labour market performance to be assessed in terms of more
and better jobs
– Part of quest to go beyond GDP by focusing on well being (OECD How is
life?)
• Seeks to achieve this through a number of different outputs
– Analytical work on job quality
– Job quality indicators based on existing data
– Guidelines for the collection of relevant and comparable information on
job quality (e.g. module that NSOs could include in their surveys)
• Collaboration between the Directorate of Employment and Labour
Social Affairs and Statistics Directorate of the OECD
– Two-year undertaking, from October 2013 , with further follow-up work
planned for PoW 2015-2016

5. 5
How good is your job?
Measuring and assessing job quality
• Propose a new conceptual and operational framework to
measure and assess job quality
• Not just a disparate set of statistics nor all-encompassing (e.g.
UNECE, ILO)
• Allow assessment of labour market and economic performance
through emphasis on worker well-being
• Provide an overview of job quality across OECD
countries and socio-economic groups
• NB: Focus on OECD countries… for the moment

6. How good is your job?
1. A framework for measuring and
assessing job quality

7. 7
Defining the main dimensions
of job quality
• Job quality refers to those aspects of employment that contribute to
worker well-being  inherently multi-dimensional construct
• Drawing on the literature on well-being, 3 key and complementary
dimensions of job quality are identified:
1. Earnings quality
2. Labour market security
3. Quality of the working environment
• Should be considered jointly with job quantity to assess labour
market performance and the role policies and institutions

8. 8
• Focus on outcomes experienced by workers
– Consistent with well-being perspective
– Allows evaluating the role of policies and institutions
• Concentrate on individual workers
– To take account of the distribution of job quality outcomes
– Allows assessing to what extent poor outcomes on one
dimensions are associated with poor outcomes on another
• Favours objective features of job quality
– Ensures better comparability of outcomes across countries and
time
Principles for the
measurement of job quality

9. How good is your job?
2.1 Earnings quality

10. 10
Measuring earnings quality:
Average earnings and its distribution
• At the individual level
– Gross versus net earnings
– Hourly or other frequency
• At the aggregate level
– How much emphasis should be given to distribution?
– Can we construct a single indicators that takes account of both
average earnings and its distribution?

11. 11
Earnings quality should take account of
both average earnings and its distribution
• Level of earnings and life satisfaction are positively
correlated across countries as well as between persons
within countries
• For a given level of average earnings, overall well-being
tends to be higher the more equal is its distribution
– Life satisfaction rises at a decreasing rate with earnings
– People tend to display an intrinsic dislike of high inequality in
society (inequality aversion)

12. 12
Measuring earnings quality in terms of
average earnings and its distribution
• Generate aggregate index using general means framework with
inequality aversion (Atkinson, 1970)
• Assume “moderate” degree of inequality aversion (weight of 2/3 on
1st tercile, ¼ on 2nd tercile and remainder on 3rd decile)

13. How good is your job?
2.1 Earnings quality
2.2 Labour market security

14. 14
Measuring labour market security:
Unemployment risk and insurance
• Existing frameworks typically focus on job security using indirect
proxies such as incidence of temporary or short-tenured workers
• Focus on expected cost of unemployment
– Unemployment risk
• probability of becoming unemployed
• expected duration of unemployment –
-> measured using data on unemployment inflows and outflows
– Insurance against risk of unemployment
• accessibility of benefits
• their generosity and maximum duration
• the progressivity of the tax system
-> coverage rate times the average net replacement rate of unemployment
insurance and assistance
• Definition of labour market security effectively assumes that the
cost of unemployment is limited to the associated loss of income

15. 15
Labour market insecurity
in OECD countries
Share of previous earnings, 2010
Source: OECD calculations based on the OECD Unemployment Duration database, OECD Benefit
Recipients database and OECD Taxes and Benefits database.

16. 16
Unemployment risk and insurance have
important implications for well being
Estimated effects of unemployment risk on life satisfaction and the
compensating effects of effective unemployment insurance.
Source: OECD calculations based on the European Union Statistics on Income and Living
Conditions and the European Social Survey.

17. How good is your job?
2.1 Earnings quality
2.2 Labour market security
2.3 Quality of the work environment

18. 18
Measuring quality of the working environment:
Job demands, job resources and job strain
• Depends on the balance between job demands which tend to
impair health and job resources which tend to mitigate the effects
of demands
• Job demands
– time pressure
– physical health risks
– (workplace intimidation)
• Job strain: combination of excessive job demands and
insufficient resources that is likely to cause health impairment
– Construct measures for each JD and JR and relate them to health outcomes
– Define job strain in terms of combination of JD and JR associated with poor
health at individual level
– Use EWCS for core analysis or combination of EWCS /ISSP to extend
country coverage
• Job resources
– work autonomy & learning
– good relationships with colleagues
– (good management practices )

19. 19
Quality of the working environment
in OECD countries
Source: 4th European Working Conditions Survey, Eurofound , and International Social Survey
Programme – Work Orientations Module

20. 20
Job strain and work-related health
Source: 5th European Working Conditions Survey, Eurofound (2010).

21. How good is your job?
3. A statistical portrait of job quality
in OECD countries

22. 22
How does job quality compare
across countries?

23. 23
How does labour market performance
compare across countries?

24. 24
Which workers hold quality jobs?
• Youth and low-skilled not only tend to have relatively low employment
rates but also weak job quality outcomes
– Education is positively associated with job quality in all three dimensions.
– Age is associated with higher earnings quality and better QWE. Labour market
security is highest for prime-age workers (30-49).
– Women have lower earnings, but have otherwise similar outcomes to men.
• Non-standard work tends to be associated with weaker job quality
outcomes but not necessarily all
– Temporary work is not only negatively associated with earnings quality and
labour market security but also with QWE.
– Part-time work is associated with lower earnings quality (in terms of hourly
wages) and labour market security, while QWE tends to be higher.

25. How good is your job?
4. Wrap up

26. 26
Concluding remarks
• New conceptual and operational framework to measure and assess
job quality across countries and socio-economic groups
Dimensions
Main labour market and
social policies
Earnings quality
Growth-enhancing policies
Education policies
Wage-setting institutions
Labour market security
Employment protection legislation
Tax and benefit systems
Active labour market policies
Quality of the working environment
Regulations for working time and occupational
health and safety
Occupational health care services
Vocational training
• Actual implementation and measurement flexible and can be
adapted to one’s preferences or the specific context

27. 27
Analytical work ahead
• Move towards a more dynamic perspective that places
more emphasis on the prospects for career advancement
provided by jobs
• Extend the analysis of job quality to emerging economies
• Assess labour market performance in terms of the
quantity and quality of jobs and the role of policies and
institutions

28. 28
Ambitious statistical agenda
• Inventory for Job quality
– identify data sources as well as data gaps
– document key insights on job quality
• OECD database on job quality
– to become available via OECD.Stat
– with information by country and eventually also by socio-economic
group
– gradually extend country coverage to non-OECD members
• OECD guidelines on the measurement of Job Quality
– possibly including a new questionnaire that countries could
implement as ad hoc module in their Labour Force Survey

29. 29
Thank you!
• For further information on OECD work on job quality
please contact:
– Sandrine Cazes (STD): sandrine.cazes@oecd.org
– Alexander Hijzen (ELS): alexander.hijzen@oecd.org
– Anne Saint-Martin (ELS): anne.saintmartin@oecd.org