Back to work: re-employment, earnings and skill use after job - PowerPoint PPT Presentation

Launch of analytical report on Displaced Workers Paris 16 17 May 2013 Paris, 16-17 May 2013 Back to work: re-employment, earnings and skill use after job displacement D Danielle Venn, Glenda Quintini, Paulina Granados i ll V Gl d Q i ti i P li G d

Background: Displaced-Workers project g p p j Project launched in June 2011 with Expert Group meeting Project launched in June 2011 with Expert Group meeting. Phase 1: • Analytical report produced with the help of consultants • Aims: – Produce comparable statistics on job displacement and its consequences; – Explore issues rarely addressed in the literature: quality of post-displacement jobs and skills use • Conference to discuss the draft report • October 2013 analytical report published

Background: Displaced-Workers project (cont ) (cont.) Phase 2: • 9 country case studies: – Report for Korea released soon and work has begun on Australia, Canada and Japan. – Still to come: Denmark, Finland, New Zealand, Sweden and the United States Phase 3: Phase 3: • A policy synthesis report is anticipated in 2015

Plan of the presentation p • Definition of displacement Definition of displacement • Issues of cross-country comparability • Key findings: incidence, groups most affected, earnings K fi di losses, job quality, changes in skill requirements (including additional material) • (Preliminary) policy implications

Definition of displacement and sample restrictions restrictions • Workers are defined as displaced if : i) they are employed in one year, and either employed in a different job or not employed in the following year; and ii) either employed in a different job or not employed in the following year; and ii) the reason for the separation is: – Firm -identified displacem ent : job separations from firms that from one Firm identified displacem ent : job separations from firms that, from one year to the next, experience an absolute reduction in employment of five employees or more and a relative reduction in employment of 30% or more ( m ass dism issal ) or that ceased to operate ( firm closure ). – Self-defined displacem ent : job separations for economic reasons or dismissal for cause • Sample restrictions: – 20-64 year olds, minimum of one-year tenure, firms with more than 10 workers if firm-identified; multiple job holders and public sector excluded

Cross-country comparability y p y • Significant improvement in comparability • But of data sources imply differences: – firm-identified: exogenous event, large samples but few individual characteristics hard to identify small-scale displacement includes characteristics, hard to identify small scale displacement, includes voluntary quits – tends to over-state displacement incidence; – self-defined displacement : rich information on individuals, biased towards more severe events with poorer post-displacement outcomes – towa ds o e seve e eve ts w t poo e post d sp ace e t outco es tends to under-state displacement incidence. • And sample restrictions vary across countries These issues m ust be kept in m ind when com paring results across countries

Incidence of displacement p • Displacement is highly cyclical • 2-7% of employees affected every year Displacement rates, 2000-10 a Percentage of employees aged 20-64 who are displaced from one year to the next, averages 10 0 2000-08 2009-10 2000-08 2009-10 f P N R C R U U O D W D N R U G J Z F A A K E P F I S B S % % 7 7 6 6 6 6 5 5 4 4 3 3 2 2 1 1 0 0 JPN NZL FRA CAN RUS AUS KOR DEU SWE DNK PRT FIN USA GBR Self-defined displacement Firm-identified displacement

Time-trends • No upward trend in displacement over the past decade – longer trends (up to three decades) available for fewer countries show similar picture crisis AUS CAN KOR NZL FR RUS JPN 0.07 0.06 0.05 Self-defined Self defined 0.04 displacement 0.03 0.02 0.01 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 crisis DNK FIN DEU PRT SWE GBR USA 0.09 0.08 0.07 Firm-identified 0.06 displacement 0.05 0.04 0.03 0.02 0.01 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Groups most affected p Relative displacement rates by personal and job characteristics, 2000-2010 • Older workers and those C. Aged 55-64 years A. Men B. Aged 20-24 years (compared w ith 35-44 years) (compared w ith w omen) (compared w ith 35-44 years) with low education have with low education have 2000-2008 2009-2010 2000-2008 2009-2010 2000-2008 2009-2010 higher displacement risk, 2.0 4.0 4.0 take longer to get back to 2.0 2.0 work and suffer greater 1.0 earnings losses earnings losses 1.0 1.0 0.5 0.5 0.5 AUS CAN FRA JPN KOR NZL RUS DNK FIN DEU PRT SWE GBR USA AUS CAN FRA JPN KOR NZL FIN DEU SWE GBR USA JPN KOR FIN GBR RUS DNK PRT AUS CAN FRA NZL RUS DNK DEU PRT SWE USA Self-defined displacement Firm-identified displacement Self-defined displacement Firm-identified displacement Self-defined displacement Firm-identified displacement • Youth have higher risk of D. Less than secondary education E. Tenure 1-4 years F. Firm size 10-49 employees displacement but find (compared w ith post-secondary education) (compared w ith 10-19 years) (compared w ith 500+) work quickly often in work quickly, often in 2000-2008 2009-2010 2000 2008 2000-2008 2009 2010 2009-2010 2000-2008 2000 2008 2009-2010 2009 2010 8.00 8.0 4.0 better jobs 4.0 4.00 2.0 2.0 • Workers in small firms, 2.00 1.0 with short tenure in with short tenure, in 1.00 0.5 1.0 JPN KOR FIN GBR KOR NZL FIN KOR NZL FIN GBR AUS CAN FRA RUS DNK DEU PRT SWE temporary contracts are AUS CAN FRA RUS DNK DEU PRT SWE AUS CAN FRA RUS DNK DEU PRT Self-defined displacement Firm-identified displacement Self-defined displacement Firm-identified displacement Self-defined displacement Firm-identified displacement at higher risk of displacement

Variation across regions and industries g Displacement rate by region of residence, 2000-2008 MEAN MAX MIN • Displacement rates vary p y 0.08 significantly across 0.07 regions, with the largest 0.06 differences in Korea and 0.05 Portugal and very little g y 0.04 0.03 variation in Denmark and 0.02 Japan. 0.01 0 AUS CAN FR JPN KOR NZL RUS DEU DNK FIN GBR PRT SWE USA • Manufacturing and • Manufacturing and Self-defined Firm-identified Displacement rate for Construction and Manufacturing Construction stand out as Difference with respect to the average displacement rate 2000-2008 the two sectors with 0.05 Manufacturing Construction highest incidence of 0.04 displacement displacement 0.03 0.02 0.01 0.00 -0.01 -0.02 AUS CAN KOR NZL FR RUS JPN DNK FIN DEU PRT SWE GBR Self-defined Firm-identified

Re-employment rates p y • Re-employment rates one year after displacement vary from above 70% in Nordic countries and the United States to 40% or below in France, Portugal and the United Kingdom; • Rates improve in the second year after displacement • Re-employment chance were lower in all countries during the crisis Re-employed Re-employed Re-employed 100 0 Re-employed Re-employed Re-employed fc within one year within two years within one year FRA KOR CAN JPN RUS USA NZL AUS PRT GBR DEU DNK USA FIN SWE within one year within two years within one year (2000-08) (2000-08) (2009-10) Self-defined displacement Firm-identified displacement (2000-08) (2000-08) (2009-10) % % 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 FRA KOR CAN JPN RUS USA NZL AUS PRT GBR DEU DNK USA FIN SWE Self-defined displacement Firm-identified displacement

Regional mobility and re-employment g y p y • Regional mobility after displacement (for work or to look for work) varies across countries and is highest in the United States and Russia; g ; • Mobility has increased in the US, Korea and Denmark during the crisis but remained relatively stable in most other countries (declined in Canada) Displaced workers who stay in the labour force and change region Unemployed 2000-08 Employed 2000-08 Total active movers 2009-10 20 18 16 14 12 10 8 6 4 2 0 USA CAN AUS KOR RUS SWE FIN DNK Self-defined displacement Firm-identified displacement

Earnings losses g • Low in Nordic countries, much larger elsewhere • Largest losses for men, older workers and the least educated g , Earnings changes before and after displacement As a percentage of pre-displacement earnings A. Annual earnings B. Monthly earnings SWE DNK DEU PRT GBR DEU FIN USA 10 10 0 0 - 10 - 10 - 20 - 20 - 30 - 30 - 40 - 40 - 50 - 50 - 60 60 - 60 60 -2 -1 DY +1 +2 +3 +4 -2 -1 DY +1 +2 +3 +4

Earnings losses ( Cont .) • Losses mostly due to time out of work Monthly earnings and wage changes before and after displacement a As a percentage of pre-displacement earnings A. Germany B. Portugal C. United Kingdom Earnings Wages Earnings Wages Earnings Wages 5 10 5 0 0 0 - 5 - 5 - 10 - 10 - 10 - 20 - 15 - 15 - 20 - 30 - 20 - 25 - 40 - 25 - 30 30 - 50 - 30 - 35 - 40 - 60 - 35 -2 -1 DY +1 +2 +3 +4 -2 -1 DY +1 +2 +3 +4 -2 -1 DY +1 +2 +3 +4