Long term employment and measures to prevent itProfessor Ingi Runar Edvardsson

Content

• The meaning of work• Long term unemployment

– How does it affect unemployed people?– Who are most likely to be long term

unemployed?

• What measures have Western governments used to fight long term unemployment?– Are some measures more effective than others?

• Are we seeing radical changes in the labour market?

The meaning of work

• Means of livelihood - wages

• Contribution to society – making a difference – doing something of use

• Status and position

• Has impact on our identity– Who am I?

The lack of work

• Decreasing living standards – poverty?– Holidays, restaurants and pub visits, dentists,

bargains and savings, run into debt

• A feeling of vastness and alienation– lonely, isolated – rely on family and friends for

social support

• Low status of unemployment– Stigmatisation, source of same

• Identity crisis?- Loosing self-respect• Increasing the likelihood of receiving

sickness benefits, early retirement

Long term unemployment

• Unemployed: Out of job but actively seeking employment

• Long term unemployment: being unemployed for longer than 12 months

Who is most likely to be long-term unemployed?

• Age– Young people, older workers

• The lower the education and qualifications the higher the risk

• Single parents and people with children (lack of child care provision)

• People with disability

• Immigrants

The causes of unemployment

• Economic crisis– Decreasing demand for labour

• Structural transformation– From manufacturing to services– Deindustrialisation – Offshoring, new international

division of labour

• Technological changes– Increased productivity

Long term development of unemployment in Nordic countries

Source: The Nordic Statistical Yearbook 2009

1 year and over as % of total unemployment

Source: Labour force statistics 1997-2007.

Denmark Finland Iceland Norway Sweden

Labour market training, AMU

X X

Work experience palcement, ALU

X X X X X

Employment subsidies

X X

Vocational training

X X X X

Employment-related rehabilitation

X

X

Self-employment grants

X X X X

Entrepreneurship in firms

X X

Relief work X X X X

Basic computer training

X

Job Alternation Compensation

X X X X

Best practice• Barbara Sianesi (2008, p. 370), Labour

economics: “…the central finding is that the more similar to a regular job, the more effective a program is for is for its participants. Employment subsidies perform best by far, followed by trainee replacement and, by a long stretch, labour market training”.

• K. Carling and K. Richardson (2004, p. 335), Labour economics: “We find that programs in which the participants obtain subsidized work experience and training provided by firms have better outcomes than classroom vocational training.”

Best practice cont.

• M. Estevão (2003), IMF Working Paper• Using panel data for 15 industrial countries• Active labour market policy increased in the

1990s and did increase employment rate• Direct subsidies to job creation were the

most effective in raising employment rates, while expenditure on job training programs seem to have been largely ineffective

Future trends

• Is long-term unemployment similar as in previous times?

• What is different today?

• Are there any new trends?

• Is the present crisis mainly economical (financial)?

• Can we rely on past experience on activating unemployed people?