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Labour Market Flexibility in the Netherlands
Flexibility of the Labour Market 21 January 2011
CPB Netherlands Bureau for Economic Policy Analysis
Introduction
Flexibility of the Labour Market 21 January 2011 2
Labour Market Flexibility in the Netherlands CPB-ROA Publication - - PowerPoint PPT Presentation
Labour Market Flexibility in the Netherlands CPB-ROA Publication - - PowerPoint PPT Presentation
Labour Market Flexibility in the Netherlands CPB-ROA Publication Frank Crvers Rob Euwals Andries de Grip Flexibility of the Labour Market 21 January 2011 Introduction Temporary employment under discussion in the Netherlands low
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CPB Netherlands Bureau for Economic Policy Analysis
Introduction
Flexibility of the Labour Market 21 January 2011 3
Policy discussion What is the role of the various types of labour? Impact of policy on labour market? Contribution of this study New empirical evidence on Netherlands Framework to discuss advantages and disadvantages
- f labour market flexibility
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CPB Netherlands Bureau for Economic Policy Analysis
Introduction
Flexibility of the Labour Market 21 January 2011 4
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CPB Netherlands Bureau for Economic Policy Analysis
Overview
Flexibility of the Labour Market 21 January 2011 5
- 1. Framework: role of contracts and self-employment
- 2. Permanent contracts: wage-tenure profiles
- 3. Self-employment: success of self-employment
- 4. Flexible contracts: recent graduates
- 5. Flexible contracts: human capital
- 6. Conclusions
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CPB Netherlands Bureau for Economic Policy Analysis
(1) Framework: highly educated men
Flexibility of the Labour Market 21 January 2011 6
1 0 20 30 40 50 60 70 80 90 1 00 1 5-25 25-35 35-45 45-55 55-65
%
permanent temporary self-employed
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CPB Netherlands Bureau for Economic Policy Analysis
(1) Framework: lowly educated women
Flexibility of the Labour Market 21 January 2011 7
1 0 20 30 40 50 60 70 80 90 1 00 1 5-25 25-35 35-45 45-55 55-65
%
permanent temporary self-employed
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CPB Netherlands Bureau for Economic Policy Analysis
(1) Framework
Flexibility of the Labour Market 21 January 2011 8
Temporary contracts: Relatively common among the young Role of such contracts: Flexibility for firms and particular groups of workers Screening device for firms (and some workers) Level of worker-firm commitment low New evidence in chapters 4, 5 and 6
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CPB Netherlands Bureau for Economic Policy Analysis
(1) Framework
Flexibility of the Labour Market 21 January 2011 9
Permanent contract: High education: max incidence at ages 25-35 Low education: max incidence at ages 45-55 Role of such contracts: Commitment device human capital investments Low flexibility for firms, hardly impede workers Firms reluctant to hire permanent workers for jobs with little human capital investments because of uncertainty about ability of worker New evidence in chapter 3
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CPB Netherlands Bureau for Economic Policy Analysis
(1) Framework
Flexibility of the Labour Market 21 January 2011 10
Self-employment: Relatively common among older workers Role of such employment: Flexibility for firms hiring self-employed Flexibility for workers in case of deliberate choice Level of worker-firm commitment low May act as screening device New evidence in chapter 7
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CPB Netherlands Bureau for Economic Policy Analysis
Overview
Flexibility of the Labour Market 21 January 2011 11
- 1. Framework: role of contracts and self-employment
- 2. Permanent contracts: wage-tenure profiles
- 3. Self-employment: success of self-employment
- 4. Flexible contracts: recent graduates
- 5. Flexible contracts: human capital
- 6. Conclusions
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CPB Netherlands Bureau for Economic Policy Analysis
(2) Wage-tenure profiles
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Dutch labour market High level of protection for permanent jobs Low level of mobility at each age group Relatively long unemployment durations Research questions Are Dutch wage-tenure profiles steep? Impact employment protection on wages? Are steep profiles related to low mobility?
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CPB Netherlands Bureau for Economic Policy Analysis
(2) Wage-tenure profiles
Flexibility of the Labour Market 21 January 2011 13
0,5 1 ,0 1 ,5 2,0 2,5 3,0 3,5 4,0 4,5 0,1 0 0,1 5 0,20 0,25 0,30 0,35 0,40 0,45 0,50
share workers tenure > 1 0 years E PL index (2006) regular contracts
NL
Fra Ger It E sp Prt Dk UK Aus
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CPB Netherlands Bureau for Economic Policy Analysis
(2) Wage-tenure profiles
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Empirical results
- Wages increase rather strong with tenure
- Irrespective of estimation method
- Employment protection increases wages
- Low worker mobility related to high wages (at sectoral level)
Policy
- Challenge for sectors/firms with ageing workforce
- Maintaining or upgrading productivity of older workers
- Efficiently allocating older workers to tasks
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CPB Netherlands Bureau for Economic Policy Analysis
Overview
Flexibility of the Labour Market 21 January 2011 15
- 1. Framework: role of contracts and self-employment
- 2. Permanent contracts: wage-tenure profiles
- 3. Self-employment: success of self-employment
- 4. Flexible contracts: recent graduates
- 5. Flexible contracts: human capital
- 6. Conclusions
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CPB Netherlands Bureau for Economic Policy Analysis
(3) Success of Self-employment
Flexibility of the Labour Market 21 January 2011 16
Dutch labour market Substantial share of self-employed And this share is on the rise Research questions Which self-employed survive? Which self-employed enter paid employment?
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CPB Netherlands Bureau for Economic Policy Analysis
(3) Success of Self-employment
Flexibility of the Labour Market 21 January 2011 17
5 1 0 1 5 20 25 30 35 1 986 1 988 1 990 1 992 1 994 1 996 1 998 2000 2002 2004 2006 2008
%
Netherlands S pain UK G ermany US Belgium
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CPB Netherlands Bureau for Economic Policy Analysis
(3) Success of Self-employment
Flexibility of the Labour Market 21 January 2011 18