WP7 – Public/Private mix WP9 – Two scenarios for SET in EU WP10 – Demagraphic changes and...
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Session 4 – What can we see about the structure of the fututre labour demand and supply? WP7 – Public/Private mix WP9 – Two scenarios for SET in EU WP10 – Demagraphic changes and labour market NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS 1
WP7 – Public/Private mix WP9 – Two scenarios for SET in EU WP10 – Demagraphic changes and labour market NEUJOBS Mid-Term Conference - 18th February 2013
WP7 Public/Private mix WP9 Two scenarios for SET in EU WP10
Demagraphic changes and labour market NEUJOBS Mid-Term Conference -
18th February 2013 - CEPS1
Slide 2
Session schedule Presentation of NEUJOBS findings WP7 -
Public/private mix and social innovation in service provision,
fiscal policy and employment T. Sirovtka and B. Greve with
contributions by O. Hora, M. Horkov and P. Hork WP9 Global
scenarios for European socio-ecological transition B. Boitier,
Lancesseur N. and Zagam P. WP10 - The consequences of demographic
change on labour supply, wages and labour demand H. Schneider,
Dolls M., Lichter A. and Sommer E. Critical review by Thomas
Hemmelgarn (DG Taxud) Questions/remarks from audience NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS2
Slide 3
T. Sirovtka and B. Greve with contributions by O. Hora, M.
Horkov and P. Hork NEUJOBS Mid-Term Conference - 18th February 2013
- CEPS3
Slide 4
Focus (Questions) Is social services development sustainable.
Which potential for job creation? scope/level of employment quality
of jobs and sustainability of jobs and employment How fiscal
consolidation context matter? How governance is changing?
(regulation, financing, delivery) What kind of innovations in
(governance) of social services? NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS4
Slide 5
Findings: employment in social services demand drivers Changing
womens roles, their growing labour market participation (womens
role revolution) Demand shift towards services - broadening
purchasing power throughout the population (role of income
differentials?) Ageing of population New social risks (dynamic
labour market, reconciliation work-family, social exclusion) Path
dependency of WS development Service dependency ? NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS5
Slide 6
Findings: employment in social services supply drivers
Productivity lag (Baumol) should foster employment growth in sector
of services ? Possible responses: to adjust labour cost (market
cleaning), to adjust earnings in services to overall economy
earnings to subsidize services Technical complexity of the
provision of social services (Health Care) Vested/professional
interests User profile of the clients (middle class interested)
Political considerations electoral gains, buffer against
uncertainty/unemployment Governance reforms (their own urgencies)
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS6
Slide 7
Employment in SS 2000-2010 Health and social services sector in
2010: in average 6% employment rate in the EU Increased in last ten
years by 0.7 percentage points Differences among EU countries are
remarkable (from 14% in Denmark to 2.7% in Romania) Crisis in
2008-2010 did not change much on the continuous growth of
employment in social services 78% of employment in HSW are women
Growing older: in 2010 overall 26.5 % workers older than 50 years
while in HSW it is 30.3 % NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS7
Slide 8
Employment in SS 2000-2010 First cluster: countries where
employment rate is between 10.6% to 14.0% (Sweden, Finland, The
Netherlands and Denmark) Second cluster: countries where employment
rate is between 8.4% to 9.1% (Belgium, France, Germany and UK)
Third (North-West) cluster: between 6.1% to 7.7% (Luxembourg,
Austria and Ireland) Large South-Central-East cluster employment
rate in social services is between 2.7% (Romania) and 4.8%
(Portugal) NEUJOBS Mid-Term Conference - 18th February 2013 -
CEPS8
Jobs in social services Wages in HSW sector grew more slowly
than in other parts of the economy and are in most EU member states
bellow average wage in the economy Although skill levels are
relatively high and working conditions are often demanding
Sufficient labour supply in future ?? Above average job quality in
cognitive demands on jobs, job complexity, learning new things,
monotony of the job + job security But lower level of job autonomy,
higher psychical and physical health risks NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS13
Slide 14
Examination of the factors shaping employment in SS, 2000-2010
Financing of the welfare state (government receipts, tax on labour,
social protection expenditure, social protection expenditure in
kind) Demographic (ageing of population old age dependency,
fertility rate) Political-economic cycle (proxy variables - GDP
growth, public deficit, unemployment rate total, men, women)
Employment pattern/modernization (employment rate total, men,
women) Static (values) + dynamic (change in values) view NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS14
Slide 15
Findings: factors of employment growth in SS 1. Employment rate
in social services is stably and strongly correlated with three
kinds of variables: financing of the welfare state (receipts, exp)
overall employment rate and fertility rate 2. Moderate correlation
with the variables which characterize labour market performance
like unemployment rates, empl rate women, men 3. ? GDP growth, O-A
dependency The above pattern changed only little during time
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS15
Slide 16
Factors key findings Correlation coefficients PE with the
variable Employment rate in social services strong >
0.66Moderate > 0.33 Weak, insignificant 2010 Social Protection
Expenditure in Kind (.840) ** Employment rate women (.637) **
Public Deficit Social Protection Expenditure Total (.807) **
Employment rate men (.636) ** Old Age Dependency Total government
receipts from taxes and soc.contr. (.798)** Unemployment rate women
(-.502) * Employment rate total (.748) ** Unemployment rate total
(-.472) * Tax on labour (.670) ** Unemployment rate men (-.426) *
Fertility rate (.674) **GDP growth (.391) * 16
Slide 17
Current and future problems a) The labour force in the HSW
sector is rapidly ageing b) The younger generations of workers in
HSW less often have a high level of education when compared to the
older generations c) Workers with a medium level of education are
usually NOT specifically educated in health and welfare d) Risk to
lack of manpower despite high levels of unemployment, due to
demanding working conditions and low job quality NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS17
Slide 18
Current and future problems There may be two worlds of social
services emerging: 1. The world of formal, more standardized, high
quality services provided by a relatively highly qualified
workforce 2. The world of hidden, semi-formal, unknown quality
services provided by less qualified people who are often neighbours
or immigrant workers. NEUJOBS Mid-Term Conference - 18th February
2013 - CEPS18
Slide 19
Financing Sustainable financing is a necessary condition for
employment in social services (stable revenue within a decided
tax-structure, ability to finance social services given the changes
in the global economy and over the business cycle) In the EU the
tax systems have not become more sustainable in the last 10 years
this implies a higher level of pressure on the financing of the
welfare states NEUJOBS Mid-Term Conference - 18th February 2013 -
CEPS19
Slide 20
Social Innovations Social innovation plays an increasing role
in social services, especially when understood and implemented as
systematic change This includes several elements: focus on
consumers needs and service quality standards; mobilising resources
and combining different ways of financing social services public
and private; participation of a broader range of actors and synergy
of their actions. NEUJOBS Mid-Term Conference - 18th February 2013
- CEPS20
Slide 21
Future scenario I: low road Uncertain public financing of
social services due to either increasing public debt and
unsustainable public finances (like in some South-European
countries), or a deliberate strategy to dismantle the welfare state
(like in some East European countries) Low public expenditure on
social services and a limited role of social services as a buffer
against unemployment or social investment measures Limited role of
the state in regulating and financing social services NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS21
Slide 22
Future scenario I: low road Lack of social innovation in social
services Limited quality standards in social services Slow growth
of employment in social services Lower quality of employment in
social services Lower employment rates of women, lower employment
rates in general (i.e. higher unemployment rates), considerable
child employment penalty, e.g. the work family balance will not
really be supported Dualisation of social services in terms of
quality, access and employment characteristics NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS22
Slide 23
Future scenario II: high road Sound and sustainable public
finance (balanced public finances, with reasonable public
expenditures), no strong attacks on the welfare state Sufficient
public expenditure on social services and the active role of social
services as social investment measures Strong role of the state in
regulating and financing social services Social innovations in
social services embedded in broader governance reforms NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS23
Slide 24
Future scenario II: high road Important role of quality
standards in social services rapid growth of employment in social
services higher quality of employment in social services higher
employment rates of women, higher employment rates in general (i.e.
lower unemployment rates), low child employment penalty less
diverse conditions and access to social services NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS24
Slide 25
The driving forces summarized Strong path dependency in WS
model financing and employment patterns matter Employment growth in
SS: positive correlated with WS finance, overall employment,
fertility rate, GDP growth Maturation of the revolution of gender
roles (gender order) Ageing of society will mater in future more
Two (three) possible scenarios: low road, high road, mixed strategy
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS25
Slide 26
The driving forces summarized Sound, sustainable public finance
necessary (expenditure + revenues, tax structure) Private funding
plays an increasing role State governance and regulation is
essential (quality standards, choice) Social innovations as
systemic change (consumer focus, mix of resources, actors) Politics
matter commitment to social investments NEUJOBS Mid-Term Conference
- 18th February 2013 - CEPS26
Slide 27
Thank you for your attention NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS27
Slide 28
SEURECO B. Boitier, Lancesseur N. and Zagam P. NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS28
Slide 29
Outline 1. Introduction 2. Macroeconomic results 3. Global
results on Employment 4. Employment in services 5. High-skilled and
Low-skilled employment 6. Energy and environment 7. Conclusion 29
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS
Slide 30
1. Introduction To make a quantitative assessment of the
Friendly and the Tough scenario. Friendly potential growth enhanced
by labor force. Natural and financial conditions allows to get near
by the potential Tough: low potential growth and bad natural and
financial conditions 30 NEUJOBS Mid-Term Conference - 18th February
2013 - CEPS
Slide 31
Enhancement of potential growth by labour force and
high-skilled labour (+15 million and +35 million) Natural and
financial conditions allow to approach potential growth after a
recovery period The engine of growth is mainly internal demand,
private and public (finance recovery) 2. Macroeconomic results 2.1
Friendly scenario: towards potential growth (1) 31 NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS 2% in average for Europe
but, on the whole period (2010-2030) the growth is dependant on
initial debt for every country
Slide 32
2. Macroeconomic results 2.1 Friendly scenario: towards
potential growth (2) 32 NEUJOBS Mid-Term Conference - 18th February
2013 - CEPS
Slide 33
Slowing down of potential growth by labour force shortage (-2
million) even with an increase of high-skilled labour (+15.5
million) After the austerity period the natural (price for oil) and
financial (interest rates) conditions do not allow to reach the
weakened potential growth The engine of growth is mainly private
internal demand because financial conditions get worse with slow
growth 1.2% growth rate in average for Europe but the financial
constraint reinforces inequalities among countries 2. Macroeconomic
results 2.1 Tough scenario: obstacle to growth 33 NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS
Slide 34
19.3 million jobs created and an unemployment rate of 7.5% in
2030 Jobs destruction in Agriculture (-3 million) and Industries
(-6 million) Jobs creation in Construction (+4.4 million), Private
services (+13.7 million) and Non Market Services (+10 million) 2.
Global results on employment 2.1 Friendly scenario: toward services
34 NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS
Slide 35
6.6 million jobs destruction and an unemployment rate of 12% in
2030 Jobs destruction in Agriculture (-4 million) and Industries
(-7 million) Stagnation of employment in Non Market Services Jobs
creation in Construction (+3 million), Private services (+13
million) 2. Global results on employment 2.2 Tough scenario 35
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS
Slide 36
Jobs destruction in distribution (-0.8 million in the friendly
case and -3 million in the tough case) transport services
(respectively-0.4M and -1M ) and communication (respectively -0.8M
and -1M) Jobs creation in Lodging and catering (+2M and +1M) Bank.
Finance and Real Estate (+4M and +2M) and Other Private services
(+9.5M and +5M) High-skilled jobs creation in all services sectors
3. Employment in services 36 NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS Low-skilled destruction everywhere except for
Lodging and catering
Slide 37
Destruction of Low-skilled jobs on both scenarios (-12.7M and -
17.4M). Unemployment reduction in the Friendly case and increase in
the Tough case. Creation of High-skilled (+32M and +10.7M) Increase
in High-skilled unemployment in all scenarios from 5.6% to 7%
(Friendly) and 10% (Tough) 4. High-skilled and Low-skilled
employment 37 NEUJOBS Mid-Term Conference - 18th February 2013 -
CEPS EmploymentUnemployment rate FriendlyToughFriendlyTough
2030/2010 2010203020102030 Total+19.3M-6.6M9.7%7.7%9.7%11.8% -
High-skilled+32M+10.7M5.6%7.0%5.6%10.5% -
Low-Skilled-12.7M-17.4M11.2%8.1%11.2%12.4%
Slide 38
Increase of High-skilled unemployment Tough: Financial and
Natural conditions prevent to reach potential growth Friendly:
Potential growth Bottleneck and wages increase diffusion on other
activities R&D and Intangibles 4. High-skilled and Low-skilled
employment 38 NEUJOBS Mid-Term Conference - 18th February 2013 -
CEPS
Slide 39
None scenario reaches neither the objective of 20% reduction
for energy consumption in 2020 nor the 20% of renewables Both
scenarios are under the -20% GHG emissions in 2020. None reaches
the Roadmap -40% in 2030 A weak decoupling (GDP vs Energy) is
reached in the Friendly scenario 5. Energy and Environment 39
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS
Slide 40
Conclusion Where are we? NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS40
Slide 41
Conclusion Correcting policies Employment policies for both
scenarios but mainly for the Tough one Energy and Environment
Policies mainly for the Tough scenario : financial constraints does
not allow energy efficiency compatible with SET R&D policies or
R&D based policies for potential growth, employment,Energy and
Environment in particular in the Tough case that does not allow a
development of public services compatible with SET NEUJOBS Mid-Term
Conference - 18th February 2013 - CEPS41
Slide 42
Conclusion Policies implementation Economic instruments or
market based policies Governance, education, regulation.
Modification of behavioural equations The challenges identified in
the Tough scenario will need a drastic modification of behaviours
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS42
The consequences of demographic change on labour supply, wages
and labour demand PD Dr. Hilmar Schneider, IZA Bonn Dr. Mathias
Dolls, IZA Bonn Andreas Lichter, IZA Bonn Eric Sommer, IZA Bonn
NEUJOBS Midterm Conference, Session What can we say about the
structure of the future labour demand and supply? Brussels,
February 18-19, 2013 NEUJOBS Mid-Term Conference - 18th February
2013 - CEPS44
Slide 45
45 Outline To what extent is population decline aggravated by
structural effects (age-specific labour supply; skill-specific
labour supply)? How does labour demand react to increasing wages
induced by declining labour supply? How are wages affected by
foreseeable changes of relative shortages of labour supply? NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS
Slide 46
46 Message 1 In the friendly scenario, labour supply in head
counts is declining by 6% Labour supply in hours worked is
declining by 13% to 22% due to the increasing share of older
workers who tend to work less In the tough scenario, labour supply
in head counts is declining by 15% The relative decline of labour
supply in head counts is c.p. aggravated by structural effects
NEUJOBS Mid-Term Conference - 18th February 2013 - CEPS
Slide 47
47 Message 2 The relative decline of labour supply is likely to
increase average wages and also the skill-specific wage spread
Wages for low-skilled workers are likely to decline by up to 40%
until 2030 Wages for high-skilled workers may increase by up to 35%
until 2030 Wages for medium-skilled workers will only moderately
increase until 2030 NEUJOBS Mid-Term Conference - 18th February
2013 - CEPS
Slide 48
48 Increasing wage spread due to demographic change NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS
Slide 49
49 Message 3 The increase of wages is likely to induce a
decline of labour demand in parallel to the decline of labour
supply Demographic change will not automatically eliminate
unemployment Decline of labour demand may not be a problem for the
labour market as such, but may impose huge problems for the
stability of pension systems NEUJOBS Mid-Term Conference - 18th
February 2013 - CEPS
Slide 50
50 Labour supply and labour demand by working hours categories
Friendly scenario NEUJOBS Mid-Term Conference - 18th February 2013
- CEPS
Slide 51
51 Labour supply and labour demand by working hours categories
Tough scenario NEUJOBS Mid-Term Conference - 18th February 2013 -
CEPS
Slide 52
IZA Shaping the Future of Labor http://www.iza.org NEUJOBS
Mid-Term Conference - 18th February 2013 - CEPS52