Points for discussion The resilience of the long term job, but some changes

ILO:EMP/ANALYSIS, June 2003

Points for discussion• The resilience of the long term job, but some

changes

• Tenure, employment security and job quality

• The paradox of tenure and perceived employment security

• Tenure and mobility

• Protected and unprotected mobility

• Conclusions

Employment tenure, employment security and labour market policies


0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0 1992

2002

Average employment tenure*, 1992 and 2002

*Ranked by year 2002

(a) Data from 1998 (b) Data from 2001

Source: Based on Eurostat


Distribution of employment by class of tenure (%)

(a) Data refer to 2001

* For the US data refer to 1991 instead of 1992. For Japan data refer to 1998 instead of 2002

** Change from 1995 to 2002 instead of 1992 – 2002. *** Without Austria. AAC = Average Annual Change

Source : Own calculations based on Eurostat and national sources

Employment tenure Less than 1 year % AAC 10 years and over % AAC1992 2002 1992-2002 1992 2002 1992-2002

Belgium 10.4 12.2 1.6 45.3 46.7 0.3

Denmark 17.9 20.9 1.6 33.6 31.5 -0.7

Finland** 17.6 19.8 1.2 39.6 40.0 0.1

France 13.8 15.3 1.0 42.9 44.2 0.3

Germany 14.0 14.3 0.2 41.7 41.7 0.0

Greece 7.2 9.8 3.1 53.0 52.1 -0.2

Ireland 12.1 16.3 3.0 42.1 34.6 -1.9

Italy 7.0 10.8 4.4 48.8 49.3 0.1

Luxembourg 17.4 9.9 -5.5 38.8 45.3 1.6

Netherlands 14.5 21.6(a) 4.1 34.5 39.0 1.2

Portugal 17.0 13.2 -2.5 48.8 44.9 -0.8

Spain 23.6 19.5 -1.9 39.7 38.7 -0.2

Sweden** 14.8 14.1 -0.5 39.7 40.4 0.2

United Kingdom 15.6 19.1 2.1 31.5 32.1 0.2

EU-14*** 14.5 15.5 0.7 41.4 41.5 0.0

Japan* 9.8 8.3 -1.8 42.9 43.2 0.1

United States * 28.8 24.5 -1.8 26.6 26.2 -0.2

Average 15.1 15.6 0.4 40.6 40.6 0.0

Standard deviation 5.6 4.8 -1.5 6.8 6.9 0.1


Ranks in: Quality tenure security1=best 1=lowest 1=best

Norway n.a. 4* 1Denmark 1 3 2Ireland 8 10 3Netherlands 3 5 4Finland 2 8 5Belgium 6 14 6Austria 5 9 7Italy 10 15 8Germany 4 6 9Sweden n.a. 12 10France n.a. 11 11United Kingdom 7 2 12Greece 12 17 13United States n.a. 1 14Portugal 11 16 15Spain 9 6 16Japan n.a. 13 17

* Data refer to 1991

Source: ILO, OECD, EU

Job quality, Average tenure and Employment Security, 1996


France

GermanySw eden

Austria

FinlandNetherlands

DenmarkNorw ay

Ireland

Belgium

Italy

Greece

Portugal

JapanSpain

United Kingdom

United States

R2 = 0.0718

0

2

4

6

8

10

12

14

16

18

0 5 10 15 20

Average tenure

Job insecurity and tenure (ranking), 1996

Note: Coefficients are not significant

Source: Data supplied by International Survey research, OECD, Eurostat and national sources

High

High

Low


Job insecurity and job quality (ranking), 1996

Note: the coefficients are significant at 5% level

Source: Data supplied by International Survey research OECD, Economic commission

Netherlands

Finland

Denmark

Ireland

BelgiumAustria

Germany

United Kigdom

Italy

Spain

Portugal

Greece

R2 = 0.4989

0

2

4

6

8

10

12

14

0 2 4 6 8 10 12 14

Job quality

Job

ins

ecu

rity

Low High

High


Job tenure and job quality (ranking), 1996

Coefficients are significant at 5% level

Source: Based on Eurostat, Economic Commission

Spain

Austria

Belgium

Ireland

Italy

P ortugal

Greece

Finland

Germany

United Kingdom

Netherlands

Denmark

R2 = 0.4712

0

2

4

6

8

10

12

14

0 2 4 6 8 10 12 14

Average tenure

Low

High

High


Job insecurity and Labour Market Policies, 2000

Coefficients are significant at 5% level

worried = percentage worried about the future of their company,

unsure = percentage unsure of a job with their company even if they perform well

Note: job insecurity is the average percentage among worried and unsure people.

Source: Data supplied by International Survey research, cited from OECD

Belgium Ireland

Finland

Japan

United KingdomPortugal

GermanySw eden

France

NetherlandsDenmarkAustria

Italy

Greece

SpainUnited States

R2 = 0.3385

30

35

40

45

50

55

0.00 1.00 2.00 3.00 4.00 5.00 6.00

Public expenditures (% of GDP) in LMP High

High

Low


P ortugal

IrelandUnited Kingdom

Denmark

NetherlandSpain

GermanySweden

Luxemburg

FinlandFrance

BelgiumItaly

Greece

10

20

30

40

50

60

0 5 10 15 20 25

Less than 1 year

Mo

re t

han

10

ye

ars

Distribution of Employment by Class of Tenure, Percent Share, 2001

A B

C

Based on Eurostat


DenmarkUnited Kingdom Netherlands

Ireland

Portugal

Greece

FranceItaly

Spain

Germany Belgium

15

25

35

45

55

65

75

7 8 9 10 11 12 13 14

Average tenure


Transition rates (temp to perm jobs) and Tenure, 1995-1998

C

B A


Denmark

Belgium

Netherlands

United Kingdom

France

Greece

ItalyPortugal

GermanySpain

Ireland

15

25

35

45

55

7 8 9 10 11 12 13 14

Average tenure

Based on Eurostat

Transition rates (low to higher quality) and Tenure, 1995-1998

C A

B


Temporary Tenure distribution (%)Total Young Older job (%) Total Youth Long term under 1 year 10 years +

Group AGreece 55.4 26 38 12.6 10.2 28.1 5.4 6.6 53.2Luxemburg 62.9 32.4 24.4 5.8 2 7.5 0.5 11.1 43.9Italy 54.8 26.3 28 9.8 9.4 28.1 5.9 11.1 49.9Belgium 59.9 32.7 24.1 9 6.6 17.6 3 13.3 47.3Portugal 68.9 43.8 50.3 20.6 4.1 9.3 1.5 12.9 44.0Sweden 71.7 36.6 66.5 13.5 5.1 11.1 1.2 12.4 42.2Average 62.3 33.0 38.6 11.9 6.2 17.0 2.9 11.2 46.7

Group BFrance 63.1 29.5 31 14.9 8.6 19.5 2.9 16.4 44.0Germany 65.8 46.5 37.7 12.4 7.9 9.4 3.9 15.2 40.8Finland 68.1 41.7 45.7 16.4 9.1 19.7 2.5 21.7 40.8Spain 56.3 33.1 38.9 31.7 10.6 21.5 5.1 20.5 38.5Average 63.3 37.7 38.3 18.9 9.1 17.5 3.6 18.5 41.0

Group CDenmark 76.2 62.3 58 9.2 4.3 8.5 0.9 21.5 30.9Netherlands 74.1 70.4 39.6 14.3 2.4 5.5 0.8 21.6 35.9Ireland 65.7 49.6 46.8 3.7 3.8 6.6 1.3 19.7 34.4United Kingdom 71.7 56.9 52.3 6.8 5 11.9 1.3 19.9 32.7Average 71.9 59.8 49.2 8.5 3.9 8.1 1.1 20.7 33.5

Employment rate (%) Unemployment rate (%)

Note: Countries are clustered by tenure distribution, therefore some with high employment rates are in group A (Swe, Port.) and one (Fin) is in group B. This would be different, if another cluster criteria would be used.


Different employment systems in 2001


High social protection

Low social protection

High employment protection

France(EPL21 / SP08) (AT11.1 / S16) Germany, Sweden

Japan(EPL25* / SP24) (AT12 / S25) Portugal, Greece, Italy, Spain

Low employment protection

Denmark(EPL08 / SP01) (AT8.3 / S02) Belgium, (Netherlands), Finland, Ireland

United States(EPL01 / SP25) (AT6.6 / S21) United Kingdom

Employment protection or Employability protection

Rank 1: EPL strictness, 1 = less strict, 26 = most strict (*Estimation for Japan)

Rank 2: SP = Expenditures for labour market policy, 1 = highest, 25 = lowest;

Rang 3: S = Employment security indicator, 1 = most secure, 26 = least secure. AT= Average employment tenure (years)

Source: OECD, Eurostat


Conclusions Tenure alone seems not enough for transmitting employment securityMedium tenure, combined with “protected mobility” seems to yield best perceived security, good labour market performance and also good job qualityTenure and productivityWhat are the policy implications?

Caveats: • analysis has to be refined and does not imply strong causal relationships• Difficulties of transposing national employment models: shaped by national

policies, culture and institutions

stability and flexibility instead of flexibility aloneTrade-off between EP and LMP: enlarged bargaining agenda and changed legal rules?More and/or better LMP for flexibility and security

Employment tenure, employment security and labour market policies

Documents

Points for discussion The resilience of the long term job, but some changes