NEC Conference June 20, 2012 Labour Market Group Indicators to - - PowerPoint PPT Presentation

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NEC Conference June 20, 2012 Labour Market Group Indicators to - - PowerPoint PPT Presentation

Feb 24, 2024 178 likes •507 views

NEC Conference June 20, 2012 Labour Market Group Indicators to assess the adjustment program NOVA Economics Club Labour Market 1/32 The Portuguese Labour Market Labour Market Reform KPIs Next Steps The Portuguese Labour

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SLIDE 1

Labour Market Group

Indicators to assess the adjustment program

NEC Conference

June 20, 2012

NOVA Economics Club 1/32 Labour Market

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SLIDE 2
  • Reform
  • Labour Market

The Portuguese Labour Market

The Portuguese Labour Market is actually characterized by:

  • Historical maximum on April 2012 of 15,2% of unemployment rate;
  • Rising long-term unemployment , above the levels of EU;
  • Segmentation (protectionism of the seniors over the young) due to high strictness in

employment protection legislation;

  • Lack of workers’ mobility either across sectors or across regions concentrating mainly
  • n the services sector in the coast side of the country;
  • Low productivity and thus low competitiveness;
  • Destruction of jobs and lower pace of creation of jobs due to the economic crisis;
  • High youth unemployment (about 1/3 of the Portuguese young).

NOVA Economics Club Labour Market 2/32

  • KPIs
  • Next Steps
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SLIDE 3

The Portuguese Labour Market Reform

To address the problems previously mentioned, the Memorandum of Understanding presents important measures in the following areas of the labour market:

  • Unemployment Benefits

Reduce long-term unemployment and strengthen the social security.

  • Employment Protection Legislation

Tackle market segmentation, foster job creation and ease workers’ mobility.

  • Working Time Arrangements

Contain employment fluctuations and accommodate different working patterns.

  • Wage Setting and Competitiveness

Adjust labour costs to the development of job creation and competitiveness.

  • Active Labour Market Policies

Improve employability of the young and disadvantaged categories.

NOVA Economics Club Labour Market 3/32

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 4

Unemployment Benefits

NOVA Economics Club Labour Market 4/32 Proposed Measure Implementation Status Unemployment Benefits i) Reduce the maximum duration of UB to no more than 18 months Partly Observed. The maximum duration was reduced from 36 to 28 months. ii) Capping UB at 2.5 times the IAS Observed. iii) Declining profile of benefits over the unemployment spell after 6 months of unemployment.

  • Observed. A cut in the benefit of 10% after

6 months of unemployment was introduced. iv) Reducing the necessary contributory period from 15 to 12 months Observed. v) Extend eligibility to unemployment insurance to clearly-defined categories of self-employed workers.

  • Observed. Self-employed obtaining 80% of

their annual income from a single entity are abridged by this measure.

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 5

NOVA Economics Club Labour Market 5/32

Unemployment Benefits – Key Performance Indicators

  • Long-term Unemployed (as % of the Active Population)
  • Registered Long-term Unemployed by Duration
  • Registered Unemployed over 35 years old (as % total registered unemployed)
  • Average Monthly Amount of Subsidy per Beneficiary, in Euros
  • Ratio of Registered Unemployed to Total Unemployed which were Previously

Self Employed Workers

  • Long-term Unemployed (as % of the Active Population)
  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 6

NOVA Economics Club Labour Market 6/32

Unemployment Benefits – Key Performance Indicators

Name Long-term Unemployed (as % of the Active Population) Frequency Quarterly Period Start: 1st Quarter,1998 End: 4th Quarter, 2011 Reference Area Mainland Portugal, Madeira and Azores Objective Assess whether the reforms of the unemployment insurance system have impact on the reduction of long-term unemployment Unit Percentage Formula (Population unemployed for 12 or more months/active population) Variables Long-term unemployed - for 12 or more months Active population Sources INE – Inquérito ao Emprego Interpretation If this indicator increases either mean that the number of long-term unemployed increase or active population decreased Last Update April 2012

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 7

NOVA Economics Club Labour Market 7/32

1 2 3 4 5 6 7 8 1 2 3 4 5 6 % Millions

Long-term Unemployed (as % of the Active Population)

Unemp>12M Act Pop %LT unemp

Unemployment Benefits – Key Performance Indicators

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 8

NOVA Economics Club Labour Market 8/32

Unemployment Benefits – Key Performance Indicators

  • Long-term Unemployed (as % of the Active Population)
  • Registered Long-term Unemployed by Duration
  • Registered Unemployed over 35 years old (as % total registered unemployed)
  • Average Monthly Amount of Subsidy per Beneficiary, in Euros
  • Ratio of Registered Unemployed to Total Unemployed which were Previously

Self Employed Workers

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 9

NOVA Economics Club Labour Market 9/32 Name Registered Long-term Unemployed by Duration Frequency Annually Period Start: 2000 End: 2011 Reference Area Mainland Portugal Objective Assess whether the reforms of the unemployment insurance system have impact on the shortening of the long-term unemployment Unit Percentage (of the total) Formula (registered unemployed for more than 24 months/ total of registered unemployed) and (registered unemployed for between 12 and 24 months/ total of registered unemployed) Variables registered unemployed for more than 24 months total of registered unemployed registered unemployed for between 12 and 24 months Sources IEFP – Relatórios Anuais Interpretation If this indicator increases either mean that the number of long-term unemployed increase or the number of registered short-term decreased in relative terms Last Update April 2012

Unemployment Benefits – Key Performance Indicators

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 10

NOVA Economics Club Labour Market 10/32

Unemployment Benefits – Key Performance Indicators

15 16 17 18 19 20 21 22 23 24 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Registered Long-term Unemployed by Duration

>12M and <24M ≥24M

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 11

NOVA Economics Club Labour Market 11/32

Unemployment Benefits – Key Performance Indicators

15 16 17 18 19 20 21 22 23 24 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Registered Long-term Unemployed by Duration

>12M and <24M ≥24M

  • Reform
  • Labour Market
  • KPIs
  • Next Steps

Let us move this line 1 year back

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SLIDE 12

NOVA Economics Club Labour Market 12/32

Unemployment Benefits – Key Performance Indicators

  • Long-term Unemployed (as % of the Active Population)
  • Registered Long-term Unemployed by Duration
  • Registered Unemployed over 35 years old (as % total registered unemployed)
  • Average Monthly Amount of Subsidy per Beneficiary, in Euros
  • Ratio of Registered Unemployed to Total Unemployed which were Previously

Self Employed Workers

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 13

NOVA Economics Club Labour Market 13/32 Name Average Monthly Amount of Subsidy per Beneficiary, in Euros Frequency Monthly Period Start: September, 2009 End: February, 2012 Reference Area Mainland Portugal, Madeira and Azores Objective Verify in how much the average decreased as a consequence of capping unemployment benefits Unit Absolute value, in Euros Formula Original variable Variables Average monthly unemployment benefit in Euros Sources SS – Estatísticas do Desemprego e do Apoio ao Emprego Interpretation If this indicator decreases it means that there was a relevant number

  • f people receiving between 2.5 and 3 times the IAS decreased in

relative terms (using this indicator as a proxy) Last Update April 2012

Unemployment Benefits – Key Performance Indicators

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 14

NOVA Economics Club Labour Market 14/32

Unemployment Benefits – Key Performance Indicators

400 420 440 460 480 500 520

2009M9 2009M12 2010M3 2010M6 2010M9 2010M12 2011M3 2011M6 2011M9 2011M12

Average monthly amount of subsidy per beneficiary (€)

avg benefit IAS(419,22€)

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 15

NOVA Economics Club Labour Market 15/32

Unemployment Benefits – Key Performance Indicators

  • Long-term Unemployed (as % of the Active Population)
  • Registered Long-term Unemployed by Duration
  • Registered Unemployed over 35 years old (as % total registered unemployed)
  • Average Monthly Amount of Subsidy per Beneficiary, in Euros
  • Ratio of Registered Unemployed to Total Unemployed which were Previously

Self Employed Workers

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 16

NOVA Economics Club Labour Market 16/32 Name Ratio of Registered Unemployed to Total Unemployed which were Previously Self Employed Workers Frequency Quarterly Period Start: Quarter 1,2010 End: Quarter 4, 2011. Reference Area Mainland Portugal Objective Measure if the extension of unemployment benefits to ex self-employed workers leads to an increase in the number of registries of unemployed that were previously self-employed in relation to the total unemployed which were self-employed. Unit Absolute value, ratio. Formula Registered unemp previously self employed/Total unemp previously self employed Variables Registered Unemployed previously self employed Total unemployed previously self employed Sources INE - Inquéritos ao Emprego IEFP - Concelhos, Estatísticas Mensais Interpretation If this indicator increases it means that the provision of unemployment benefits to previously self-employed workers is being effective, as it acts as an incentive for their registration in Job Centers. Last Update April 2012

Unemployment Benefits – Key Performance Indicators

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 17

NOVA Economics Club Labour Market 17/32

Unemployment Benefits – Key Performance Indicators

0,5 0,6 0,6 0,7 0,7 0,8 0,8 0,9

2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4

Ratio between registered and total unemployed that were self-employed in previous job

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 18

Employment Protection Legislation

NOVA Economics Club Labour Market 18/32 Proposed Measure Implementation Status Employment Protection Legislation i) Alignment of severance payments entitlements for current employees with those of the reform for new hires. Observed. Severance payments for current employees will be alligned with those of new hires from November 2012

  • nwards.

ii) Adjustments to the cases for fair individual dismissals.

  • Observed. Individual dismissal based on

unsuitability will become possible and these workers do not have to be transferred to a suitable position in the firm.

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 19

NOVA Economics Club Labour Market 19/32

  • Evaluation of the restrictiveness of severance pays for years of job tenure
  • Comparison of the restrictiveness of severance pays for years of job tenure

between Portugal and other member of the EU-27

  • Composite indicator for difficulty of dismissal - REGULAR3_v1
  • Possibility of reinstatement following unfair dismissal

OECD Indicators

Employment Protection Legislation – Key Perf. Indicators

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 20

Working Time Arrangements

NOVA Economics Club Labour Market 20/32 Proposed Measure Implementation Status Working Time Arrangements i) Plan for flexible working time arrangements .

  • Observed. The plan was presented by

Q4-2011. ii) Implement short-time working schemes, a bank of hours and reduce

  • vertime pay.
  • Observed. Short-time working schemes

are working. A 150-hour bank account was introduced. Overtime was reduced by 50% and 25% time off per hour of

  • vertime was removed.
  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 21

NOVA Economics Club Labour Market 21/32

Working Time Arrangements - Key Performance Indicators

  • 4
  • 3
  • 2
  • 1

1 2 3 100 200 300 400 500 600 700 800 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012q1 % Thousands Workers under fixed-term contract Real GDP growth

  • Reform
  • Labour Market
  • KPIs
  • Next Steps

Sources:INE and Eurostat

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SLIDE 22

Wage Setting and Competitiveness

NOVA Economics Club Labour Market 22/32 Proposed Measure Implementation Status Wage Setting and Competitiveness i) Contain increases in the minimum wage during the program.

  • Observed. There has been no increase in the

minimum wage. ii) Ensure wage moderation by not extending collective contracts.

  • Observed. No extensions of collective

contracts took place. iii) Implement the “organized decentralization”.

  • Observed. Now it is possible for works

councils to make negotiations. iv) Define conditions under which work councils can conclude firm-level agreements.

  • Observed. Councils were given the power to

conclude firm-level agreements. v) Reduce firms’ threshold for work councils to conclude agreements below 250 employees.

  • Observed. Councils to conclude work

agreements were reduced below 250 employees.

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 23

NOVA Economics Club Labour Market 23/32

Wage setting and competitiveness - key perf. indicators

63 63,5 64 64,5 65 65,5 700 710 720 730 740 750 760 770 780 790 2007 2008 2009 2010 % Euros Employees' average net monthly income Productivity (GDP per hour worked)[100=EU27]

  • Reform
  • Labour Market
  • KPIs
  • Next Steps

Sources:INE and Eurostat

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SLIDE 24

Active Labour Market Policies

NOVA Economics Club Labour Market 24/32 Proposed Measure Implementation Status Active Labour Market Policies i) Present a report on the effectiveness of current activation policies and other ALMPs. Partly Observed. A follow up report is in preparation. ii) Present an action plan for possible improvements on activation policies and other ALMPs.

  • Observed. The program will be

fully operational in September.

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 25

NOVA Economics Club Labour Market 25/32

Active Labour Market Policies – Key Performance Indicators

  • Cost-efficiency of ALMP
  • Number of affected by ALMP – Increase in accumulated values per month*
  • Unemployed registered under 25 years old
  • Intensity of job search by youth*
  • Job search in labour market
  • Ratio of placements over quests
  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 26

NOVA Economics Club Labour Market 26/32

Active Labour Market Policies – Key Performance Indicators

Name Number of affected by ALMP - increase in accumulated values per month Frequency Monthly (does not include January for estimation reasons) Period Start: February 2010 End: March 2012 Reference Area Mainland Portugal, Madeira and Azores Objective Measure whether the number of people abridged by ALMP is increasing per year and per each month of each year Unit Absolute Value Formula For month x of year y= Total number of affected by ALMP (execution) for month x of year y– Total number of affected by ALMP (execution) for month x-1

  • f year y

Variables Total number of affected by ALMP (execution) Sources IEFP - Síntese da Execução dos Programas e Medidas de Emprego e Formação Profissional Interpretation If this indicator increases, it means that ALMP are including a number of people significantly higher each year. Last Update May 2012

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 27

NOVA Economics Club Labour Market 27/32

Active Labour Market Policies – Key Performance Indicators

20000 40000 60000 80000 100000 120000 140000 160000 180000

M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12

Number of affected by ALMP - Increase in accumulated values per month

2012 2011 2010

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 28

NOVA Economics Club Labour Market 28/32

Active Labour Market Policies – Key Performance Indicators

Name Intensity of job search by youth Frequency Annualy Period Start: 1998 End: 2011 Reference Area Mainland Portugal, Madeira and Azores Objective Evaluate job search effort by youth Unit Percentage Formula Unemployed under 25 years old registered in the employment services /Total Unemployed under 25 years old Variables Unemployed under 25 years old registered in the employment services Total Unemployed under 25 years old Sources IEFP – Centros de Emprego – Estatísticas Mensais INE – Inquérito ao Emprego Interpretation If it increases, it may indicate that the effort for job search among people under 25 years old is increasing Last update May 2012

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 29

NOVA Economics Club Labour Market 29/32

Active Labour Market Policies – Key Performance Indicators

20 40 60 80 100 120 140 160 10 20 30 40 50 60 70 80 90 100

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Thousands

Intensity of job search by youth (%)

Intensity of job search by youth (%) Total Registered Unemployment <25 (units) Total Unemployment <25 (units)

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 30

NOVA Economics Club Labour Market 30/32

Next steps

Unemployment Benefits and Active Labour Market Policies

  • Complete our database with previous data for some indicators and continue actualizing

the current ones with new published data;

  • Discriminate some indicators by sex, region, profession and educational level;
  • Try to get more specific data from IEFP, namely through a meeting to be scheduled;
  • Try to find some indicators that may be suitable for cross-country comparisons;
  • Evaluate if the indicators are being affected solely by a cyclical component or really

reflecting the impact of the Memorandum and in line with this divide between short and long-run effects. Also do some causality tests in the variables mentioned. Employment Protection Legislation, Working Time Arrangements and Wage Setting and Competitiveness

  • After the definition of the first KPIs, follow the same approach as specified above to

the other areas already studied.

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
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SLIDE 31

NOVA Economics Club Labour Market 31/32

Remark - Okun Law (Evolução Recente do Desemprego - gov. report)

  • Reform
  • Labour Market
  • KPIs
  • Next Steps
  • Unemp. rate forecasts according to the relation above: 15,5% in 2012 and 16% in 2013

Variation in unemployment logPIB(t)-logPIB(t-1)

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SLIDE 32

NOVA Economics Club Labour Market 32/32

Thank you for your attention

  • Reform
  • Labour Market
  • KPIs
  • Next Steps

Questions and comments