Labour shortages and employability: A European and international approach

Labour shortages combined with persistent large–scale unemployment are attracting increasing attention from actors and observers in the economic and social sectors. Shortages appear to be the effect on the employment market of a rapid economic revival after years of crisis and unemployment, indicating a mismatch between labour supply and demand. Basically, they result from either the absence of a potential reserve of economically inactive labour, or the inadequate employability of some of those actively employed. This article aims to provide a global view of the situation as it affects particularly those European Union countries which are most attuned to the problem. It describes the shortages in these various countries, their main causes, and the approaches, either envisaged or already implemented, to remedying them.     

A multifactorial explanation of youth unemployment and the special case of Austria

One of the biggest challenges currently facing European society is the dramatically high level of youth unemployment. Commonly, political solutions and strategies can be found in those countries that have been able to keep youth unemployment low in spite of the financial and economic crises. Austria is such a case. On the basis of European Union Member State data, the article gives a multifactorial explanation of youth unemployment and asks whether these factors can explain relatively low youth unemployment in Austria. With the country's “youth safety net” presented in detail, it is shown that active labour market policy reduces youth unemployment in Austria. The article also points out the limitations of cross‐country comparisons of youth unemployment rates and proposes the use of a greater number of indicators. Finally, the article argues for economic policies to stimulate demand, which have to be based on a political and social commitment to full employment.     

New challenges for the welfare state: The emergence of youth unemployment regimes in Europe?

In this article we discuss the emergence of ‘youth unemployment regimes’ in Europe, that is, a set of coherent measures and policies aimed at providing state responses to the problem of unemployment and, more specifically, youth unemployment. We classify these measures and policies along two main dimensions: unemployment regulations and labour market regulations. Using original data, we show how seven European countries locate on these two dimensions as well as within the conceptual space resulting from the combination of the two dimensions. Our findings show cross‐national variations that do not fit the traditional typologies of comparative welfare studies. At the same time, however, the findings allow for reflecting upon possible patterns of convergence across European countries. In particular, we show some important similarities in terms of flexible labour market regulations. In this regard, the recent years have witnessed a trend towards a flexibilisation of the labour market, regardless of the prevailing welfare regime.     

Comparing unemployment protection and social assistance in 14 European countries. Four worlds of protection for people of working age

Pfeifer, M. Comparing unemployment protection and social assistance in 14 European countries. Four worlds of protection for people of working age This article aims to show which policy responses 14 Western European countries have adopted to deal with rising unemployment levels and increased need for benefits during working age. In contrast to earlier studies, both components of unemployment benefits (UB), i.e. unemployment insurance and unemployment assistance, were taken into account in a social rights indicator that depicts the legal entitlements of the unemployed. In total, there were eight indicators of both UB and social assistance representing expenditure, generosity, problem pressure and benefit entitlements. The following cluster analysis groups countries using these indicators. The resulting typology consisted of four ways of protecting the working‐aged: an extensive safety nets type operating well with functioning labour markets; a liberal protection type dealing with low levels of unemployment; a targeted protection type combined with an insider–outsider divide on the labour market; and lastly, a patchy safety nets type facing high unemployment levels.     

Contextualising institutional complementarity. How long‐term unemployment depends on employment protection legislation,active labour market policies and the economic climate

This study investigated if and how active labour market policies (ALMPs) and employment protection interact with each other in light of long‐term unemployment reduction. We argue that how well the interaction between both labour market institutions reduces long‐term unemployment depends on the level of economic growth. To improve analytical clarity, two types of ALMPs were differentiated, namely training and employment programmes. Using data on 20 European countries over 16 years, our results suggest that employment protection moderates the relationship between employment programmes and long‐term unemployment. The combination of high spending on employment programmes and less strict employment protection is associated with less long‐term unemployment. This moderation effect is stronger during an economic downturn. A moderation effect from employment protection on the relationship between training programmes and long‐term unemployment was not found, even when the economic climate was taken into account as a contextual factor.     

Structural unemployment. An analysis of recruitment and selection mechanisms based on panel data among Danish long-term unemployed

The perception of structural unemployment – summarised in the notion of 'Eurosclerosis'– became almost hegemonic during the 1990s. Policy makers all over Europe tried, by means of supply-side policies, to counteract the lack of incentives in the developed European welfare states, the lack of qualification on the post-industrial labour markets and the personal decay due to long-term unemployment. However, based on the critical case of Denmark, this article challenges the perception of structural unemployment and suggests an alternative business cycle/barrier perception. At the macro level it is difficult to explain the Danish decline in unemployment from 1994 to 2000 within the structure perception. The lack of explanatory power of the structure perception is further highlighted in micro-level analyses conducted on a panel study of long-term unemployed. Based on the unemployed's own assessments, we find no indications of supply-side problems. These results are supported by analyses of actual labour market integration of the long-term unemployed in the period between 1994 and 1999, which show that education level and previous unemployment had no noteworthy influence on labour market integration, whereas age had a decisive influence. These surprising results further undermine the perception of structural unemployment and the supply-side policies rooted in this 'mistaken' problem definition.     

Do media play a role in promoting vocational education and training? The case of MasterChef

It is often suggested that vocational education and training (VET) could be key to cut youth unemployment. VET programmes may provide young people with specific professional qualifications that enable them to successfully compete in the labour market. However, despite the great emphasis placed by governments and other institutions on these programmes, VET appears to be far from reaching its full potential in many countries. One barrier preventing students from pursuing this type of education is the stigma associated with VET. This paper looks at the role of media in changing the negative social perceptions of VET. Specifically, it examines whether in Italy the growing popularity of the cooking television reality show MasterChef has led to an increase in the number of students willing to study for a vocational qualification in hospitality and catering. The empirical results show that an increase in the number of MasterChef's viewers is associated with a higher proportion of students willing to attend hospitality and catering schools. This finding suggests that popular television cooking series like MasterChef may be a vehicle through which the image and the attractiveness of VET can be improved.     

Bringing firms on board. Inclusiveness of the dual apprenticeship systems in Germany,Switzerland and Denmark

In dual vocational education and training (VET) systems, the state and employers collaborate in order to meet a country’s needs in terms of education for youth and professional skills for the labour market. These systems are considered as effective tools to lower youth unemployment. However, since firms in dual VET systems select the apprentices, not every candidate gets access to in‐firm training. Consequently, governments develop measures that try to make their dual VET systems more inclusive. We present a categorisation of the different measures used to enhance inclusiveness in three dual collective skill formation countries (Switzerland, Germany and Denmark). We show that inclusiveness measures exist in each of the three countries but are limited in the extent to which firms are expected to play an active role in them. We conclude that the types of measures adopted are related to political economy traditions and the country’s level of macro‐corporatism.     

Labour market mobility and workers' skills in a comparative perspective: exploring the role of unemployment insurance benefits

This article argues that there might be important efficiency gains for countries to provide generous unemployment insurance benefits. Firstly, generous unemployment benefits might reduce the risks, real or perceived, associated with labour market transitions such as changing employer and/or career. Secondly, such benefits might increase workers' skills levels, both by functioning as a form of insurance for workers' investments in skills that are not easily transferable between employers and by facilitating the accumulation of skills that are developed through experience with different employers. These arguments are supported by empirical data, covering 14 countries, from the Eurobarometer survey.     

Institutions and structures as barriers? A comparison of native‐born and immigrant unemployment durations across 12 European countries

This study investigated the effect of institutions on the unemployment duration gap between non‐EU immigrants and native‐born in 12 European countries. Going further than the existing literature, our study encompassed unemployment duration, distinguishing between exits to inactivity, primary and secondary employment. Additionally, we have provided a stronger micro‐foundation to the comparative literature by introducing institutional measures for unemployment‐related benefits at the individual level rather than merely using aggregate proxies. Our analysis found no disincentive effects of benefits for immigrants. Furthermore, the employment prospects of immigrants were better when the demand for low‐skilled labour was high, and immigration policy was labour market‐oriented. In contrast, employment protection legislation did not affect the unemployment duration of immigrants.     

Unemployment insurance in Bulgaria and other East European countries: The transition to a market economy

Unemployment places those it affects in a situation of dependency on unemployment benefits. The regulation of that dependency and the measures necessary to avert it, in Bulgaria (and also in other East European countries) during the period of transition to a market economy, forms the subject of labour and social insurance legislation relating to unemployment and introduced on a temporary basis. Unemployment insurance benefits (unemployment benefits in cash, unemployment assistance, social assistance) are provided for limited periods fixed in the light of the nature of the benefit, the causes of unemployment, the number of years of service, age, gender and other factors. The degree of dependency of unemployed persons on such benefits is also determined by the level of those benefits. The principal categories of legal instruments by which that dependency can be averted or reduced are (1) contributions by the State to the establishment of labour law relationships by providing information to unemployed persons on job vacancies, vocational training and retraining measures, job creation measures and placement; (2) incentives to employers to maintain existing jobs and to create new ones (credits, exemption from interest payments, etc.).     

Predicting unemployment: Occupational aspiration–achievement discrepancy as a risk factor in Norwegian young adults

Research on risk of unemployment has focused primarily on the importance of individual assets, such as level of education achieved and personal characteristics. This study investigated whether a discrepancy between current occupational position and occupational aspirations predicts unemployment. Achieving occupational aspirations may be highly important for young people in Western societies. The analyses were conducted using longitudinal survey data linked to register data on 1,681 Norwegian young adults. The results showed that being in an occupation with lower status than the occupation to which one aspires significantly predicts the risk of later unemployment. The findings accord with research suggesting that a mismatch between employees’ subjective expectations and their actual job situation has negative consequences. For example, failure to acquire a job that matches one's expectations may lead to unemployment either through proactive behaviour, such as quitting a current job to find a new one, or through giving up, such as withdrawing from work.     

Denmark: Universal or Not So Universal Welfare State

This article questions whether or not Denmark is still a universal welfare state. It does so by first offering a comparative‐based analysis of the Nordic countries on central welfare state parameters. Second, the article utilizes a case‐based analysis in respect of three core areas of the Danish welfare state—pensions, unemployment and early retirement benefit—to assess the distinctiveness of the Danish model. The article concludes that, notwithstanding the Danish model is more mixed today than it used to be, it continues to be distinct in areas such as equality, full employment, a high level of spending on social security and an active labour market policy.     

The divergent logics of labour market reforms in times of permanent austerity

In an age of ‘permanent austerity’, growing economic insecurity may increase the demand for protection against labour market risks. At the same time, economic pressures may push governments to scale down on the provision of social protection. In this article, this contradiction is examined by focusing on reforms of two labour market institutions: unemployment benefits and employment protection legislation. It is argued that the incidence of reforms of both institutions follows a different set of logics, depending on the type of economic pressures as well as the political and institutional settings. The article makes use of a new data set on labour market reforms in 14 European countries over the period of 1980–2007. Results from discrete‐time logit‐regression analysis support the main hypotheses that (1) reforming unemployment benefits (UBs) does not follow the same logic as reforming employment protection legislation (EPL), and (2) factors that contribute to expansion/regulation are not the reverse of those that lead to retrenchment/deregulation.     

Labour market integration of unemployed youth from a life course perspective: the case of Norway

The aim of this article is to analyse the labour market integration of previously unemployed youth in a life course perspective. 'Work, Lifestyle and Health' is a longitudinal panel survey following a sample of nearly 2,000 individuals who are representative of the Norwegian cohorts born between 1965 and 1968. The survey was first conducted in 1985 with follow-ups in 1987, 1989, 1993 and again in 2003. Unemployment among young people does not necessarily lead to marginalisation and social exclusion. Long-term effects will be dependent upon how the youths cope with unemployment, the duration of the unemployment period, their mental health status and educational qualifications. Many young unemployed people are not entitled to unemployment benefits because they lack work experience. Consequently, they are dependent on support from their family and/or social assistance. However, there is still much to learn about the long-term consequences of youth unemployment, e.g. whether or not the youths have received social assistance and what are the long-term consequences for their future labour market career and labour market integration.     

Public expenditures on education, human capital and growth in Canada: An OLG model analysis

Much of the current debate in ageing countries focuses on whether governments should increase investments in human capital. We address this issue by simulating the effects of additional education spending using an overlapping-generations model applied to Canada. In the context of population ageing, the results indicate that how the policy is funded has powerful impacts on the targeted outcomes. Higher education incentives may increase the rate of human capital accumulation and mitigate the negative effects of slowing labour force growth. However, the impact depends on the distortions implied by alternative tax instruments and the efficiency of public expenditures on education.     

The ratification of ILO Conventions and the provision of unemployment benefits: An empirical analysis

This article tests the relationship between the ratification of International Labour Organization (ILO) Conventions and the provision of unemployment benefits. Statistical tests focus on two related issues: why countries ratify ILO Conventions on unemployment benefits, and whether ratification influences government spending on unemployment benefits. The main findings are that democracy, region, income, and globalization are the main factors influencing why countries ratify ILO Conventions on unemployment benefits. In turn, the ratification of ILO Conventions is systematically associated with higher spending if countries have ratified more than two Conventions.     

Unemployment and economic security for young adults in Finland,Norway and Sweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults in Finland, Norway and Sweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in the Nordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployed Swedes and Finns and 45 per cent of unemployed Norwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people in Nordic countries.     

Unemployment of professional artists: empirical evidence from Australia

This paper analyses the determinants of professional artists' unemployment. A sample of 1030 Australian artists was examined to determine the relationship between the probability of unemployment and artistic profession, education, origin and other demographic covariates. Special attention is focussed on factors influencing the probability of long‐term unemployment. It is found that artists in Australia are a heterogeneous labour market group, as regards exposure to unemployment and long‐term unemployment risk. The probability of unemployment episodes varies significantly depending on the artistic occupation: community cultural development workers, actors and directors are most likely to experience unemployment, while musicians and craftspeople are the least likely. Youth, disability, living in a capital city or in Tasmania, South Australia, Victoria or New South Wales, as well as level of tertiary education, can all increase the likelihood of unemployment episodes. On the other hand, participation in formal training in the artistic profession and living in a relationship or marriage are associated with a lower probability of unemployment. Being a writer or visual artist, living in the Northern Territory, and lower levels of education can increase the probability of experiencing long‐term unemployment. Neither gender, nor origin nor age affects the risk of long‐term unemployment of Australian artists.     

Who are the lucky ones? Heterogeneity in active labour market policy outcomes

Nordlund M. Who are the lucky ones? Heterogeneity in active labour market policy outcomes Int J Soc Welfare 2011: 20: 144–155 © 2010 The Author(s), International Journal of Social Welfare © 2010 Blackwell Publishing Ltd and International Journal of Social Welfare. This study focuses on how the effects from investments in Active Labour Market Policy programmes (ALMPs) may be differently distributed due to the age and educational level of participants. Outcomes were measured as the chance of labour market inclusion, labour market stability and post‐unemployment incomes. This longitudinal study captures long‐term effects among 50,000 Swedes who entered unemployment in 1993. While the youngest gained most from ALMP‐training, the oldest were best helped by ALMP‐ employment in reducing the risk of labour market exit. The lowest educated gained much from ALMP participation, although the effects were weaker than expected: those with a higher education gained more in terms of labour market stability from ALMP‐training compared with the less educated persons. This result was interpreted in terms of a springboard effect, meaning that ALMP‐training pushes higher educated people into further education in the regular educational arena.