Author: Vassilis MonastiriotisPublisher:
ISBN: 9789279869471
Category :
Languages : en
Pages : 53
Book Description
This Research Note seeks to analyse how these diverse country experiences played out in the labour markets of the 28 countries of the European Union. To do so, it relies on a novel application of a standard micro-econometric technique, which allows to ‘decompose’ temporal changes in unemployment into two broad components: one which concerns mainly the workings of the labour market (specifically, the mix of skills and other individual characteristics that are present in the labour market and the economic significance of these for sorting individuals between employment and unemployment); and one which captures wider influences onto the labour market, including ones that may be related to financial, fiscal and other macroeconomic and institutional factors. Based on this decomposition, it offers an analysis of how the ‘external shock’ (second component) and ‘internal adjustment’ (first component) shaped the overall unemployment evolutions in each of the 28 countries of the EU across different sub-periods – from a few years before the eruption of the global financial crisis (2004) until the recent recovery (2016). As a further piece of analysis, the Research Note examines the changes in non-standard (part-time and temporary) and atypical employment (irregular hours, shift-working) during the same period, trying to see how changes in these forms of ‘flexible labour’ may correlate to the aggregate changes in unemployment as well as to its components as identified here. The analysis reveals significant variations across countries across a number of dimensions: the extent of exposure to the negative shock of the crisis; the timing and duration of the shock; the degree and pace of recovery afterwards; and, most importantly, the extent and type of labour market adjustments in relation to positive and negative shocks. Specifically, - in the period of the crisis, a large number of countries exhibited significant adjustment to the economic shock, which was predominantly driven by changes in how individual characteristics contributed to an individual’s probability of unemployment (intensified employment sorting); - still, in a minority of countries this type of adjustment (employment sorting) worked in the opposite direction, intensifying the unemployment change experienced; - in the post-crisis period adjustment dynamics became more diverse, with a larger group of countries exhibiting adverse adjustments and with overall unemployment following different dynamics across countries; - in all cases, adjustment dynamics seem to correlate only weakly to changes observed in non-standard and atypical employment (and thus to the overall extent of what can be called as ‘effective labour market flexibility’ – Monastiriotis and Tinsley, 2007), while types of adjustment seem to cut across different welfare regimes and ‘varieties’ of capitalism.
