Labour Market and Employment Policy Spring 2024 Martin GUZI martin.guzi@econ.muni.cz Labour market characteristics Week 1 http://www.youtube.com/watch?v=O5yVcXg2XfE Everyone wants a good job •Jobs boost productivity and growth •Jobs are linked to a decline in poverty •Jobs create social cohesion •Job gives people dignity •Job contributes to personal well-being •Job provides income to live • Jobs are the most important determinant of living standards. For most people, work is the main source of income, especially in the poorest countries. Many families escape or fall into poverty Because family members get or lose a job. Earnings from work increase with economic development, and the benefits associated with jobs improve as well. The relationship is not mechanical, but growth is clearly good for jobs Which of the following affects a person's decision to work? •A. The price of consumption goods relative to the wage. •B. The person's income from non-labor sources. •C. How much the person enjoys working. •D. The amount of fringe benefits offered to the person. •E. All of the above affect a person's decision to work. 4 A screenshot of a graph Description automatically generated Price hikes (Eurostat CPI data) Source: World Development report 2013 Jobs are more than just the earnings and benefits they provide. They are also the output they generate, and part of who we are and how we interact with others in society. Through these outcomes jobs can boost living standards, raise productivity, and foster social cohesion. Wage employment is not a standard everywhere http://siteresources.worldbank.org/EXTNWDR2013/Resources/8258024-1320950747192/8260293-134876122810 3/Fig_1_large.gif 3 signs that something is a motivator in your work: 1. 1.You look forward to doing it 2. 2.You feel energized while doing it 3. 3.When you talk about it later, you light up [USEMAP] https://www.youtube.com/watch?v=u6XAPnuFjJc What motivates us at work? More than money •Seeing the fruits of our labor may make us more productive •The meaningfulness of our work, by others’ acknowledgement •Knowing that our work helps others may increase our unconscious motivation •We are purpose maximizers more than profit maximizers •Eliminating motivation seems to be incredibly easy • •Are holidays a good way to motivate workers? Watch video at 9:50 https://www.ted.com/talks/dan_ariely_what_makes_us_feel_good_about_our_work Image result for wiki logo Image result for linux logo Would you prefer a fixed vacation policy or one where you decide how much time you should take off? •9% of companies around the world offer unlimited paid annual leave •The benefits to the employer include less bureaucracy to track vacations, no need to pay out unused vacation; encourages a culture of self-governance (a shift in the responsibility to employee) •Unlimited vacation is the employer version of “All You Can Eat” buffets, where for every one person who can eat their body weight equivalent of food, many others will not. •The reality of today’s workplace coupled with human nature make this arrangement more beneficial to the employer than the employee. Is "unlimited vacation" really a perk for employees? Quick review of labour market terminology •Working age population •Employed •Unemployed •Economically active population •Inactive (Out of labour force) •Workforce or labour force •Long-term unemployed •Registered unemployment •Vacancy Employment • In 2018 the overall employment rate in the EU reached 73.2 %. If the employment rate keeps increasing at the pace recorded since 2013, the Europe 2020 target would be within reached. In 2020 the employment rate in the EU stood at 72.4 % for persons aged 20-64, dropping for the first time since 2013 due to the impact of COVID-19 measures on the labour market. • • Demographic development in the EEE significantly impacts the size of workforce Before 2030, it is only in Hungary and Romania that the inflow of 20-year-olds is projected to outnumber the outflow of 64-year-olds. May be an image of text that says "Ⅲ Pripravujeme.. Kedy prestávame pracovat? (2) Aké faktory a kolko posúvajú rozhodnutie o konci kariéry? Zákonny Rast dôchodkového veku zvyšuje zamestnanost starších odchodu do dôchodku mužov žien Muži Ženy Ženy Żeny alebo deti 62 dieta Ženy deti Ženy 5 viac detí zamestnanosti (%) vo vekovej kategórii 64 rokov 75% 58 Muži Ženy 50 25 Pracovatprestávamepred,ajpo pred, prestávame dosiahnutí dôchodkového veku Zdroj: Eurostat 60 Podiel pracujúcich* príslušnom veku (%) roku 2017 Dôchodkovy vekj vyznamnym, no nie jedinym faktorom konca kariéry viac odhalíme spolu OECD už čoskoro.. 20 60 62 63 64 65 >>OE" Employment rate age group 20 to 64, by NUTS 2 regions, 2017 (% of population aged 20 to 64) The gender gap in employment opens at childbearing age the most in Czechia, Hungary, Poland and Slovakia. Later, around the age of 50, the gender gap in employment almost closes in Bulgaria, Croatia, Czechia, Hungary, Poland, Slovakia and Slovenia. In addition, in Czechia and Slovakia, the maternal employment rate of tertiary educated women is among the lowest in the OECD (OECD, 2019). In comparison, a drop in female employment at childbearing age is much lower in Austria and Germany. When skilled labour is in short supply, taking advantage of female labour may provide a considerable boost to the economy. What family policies are needed? Unemployment • Total Unemployment, Dec 2019 Youth (aged 15-24) unemployment, Dec 2019 Source: Eurostat https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Employment_statistics •Unemployment statistics might underestimate the total unmet demand for employment, also called the ‘labour market slack’, which includes unemployed, discouraged, and underemployed workers. •Discouraged workers (e.g., persons seeking work but not immediately available, or persons available but not seeking work) are close to unemployment but are not included in unemployment statistics. •Underemployment includes involuntary part-time workers who wish to work more hours. • • Labour shortage • •Labour market tightness is defined as the ratio of vacancies per unemployment. •Since 2015 the number of posted vacancies has been sharply increasing in all countries. Job applicants and posted vacancies (in thousand) Source : Czech Statistical Office In August 2019, employment offices in the Czech Republic posted more than 350,000 vacancies, which is the highest figure in the country’s history. The shortage of workers is even higher because many companies in search of more qualified employees do not approach employment offices. Czech Chamber of Commerce estimates the economy currently lacks around half a million people. Job applicants and posted vacancies (in thousand) posted vacancies Job applicants •Demographic development in the Central Europe has a significant impact on the size of workforce. •The outflow of workers over the age of 64 exceeds the number of 20-year-olds entering the labour market •Before 2030, it is only in Hungary and Romania that the inflow of 20-year-olds is projected to outnumber the outflow of 64-year-olds. •The population is younger relative to the EU average but population ageing in some EEE is faster than in the EU. Q: What strategies companies apply to deal with labour shortage? • Is immigration a solution to labour shortages? • The effect of Covid pandemic • • Number of newly posted vacancies per month in Slovakia, 2019-2021 as an indicator of economic recovery Source: istp.sk