1. Public Economics: Welfare states and inequalities University of Castellanza Session #1(b) Employment and Euroscelerosis 8 November 2010

2. Overview l Euroscelerosis »Europe’s low employment problem »Employment, unemployment and inactivity »Europe’s inflexible labour markets l Lisbon Declaration 2000 and Lisbon targets »Rising European employment »High employment societies »Germany and the advantages of inflexibility l Ways of getting to Lisbon »Different forms of flexibility and high employment

3. ‘ Euroscelerosis’: Fewer Europeans than Americans at work During the last quarter of the 20 th century employment in the USA grew, but stagnated in Europe

4. Employment statuses 2006 Full-time or part- time work Home duties Studying without part time work Early retired Prison (Important in USA) Source: Employment in Europe 2007

5. Flexibility and Employment EPL: Employment Protection Level (ranking) Countries where employment is most protected (high EPL ranking) tend to have low employment rates

6. Lisbon Declaration 2000 'A new strategic goal needs to be defined for the next ten years: to make the European Union the world's most dynamic and competitive area, based on innovation and knowledge, able to boost economic growth levels with more and better jobs and greater social cohesion.‘

7. Lisbon Employment Targets Outcomes 2007 AllWomenAll 55-64(Unemployment as % of labour force 15+) Lisbon target70.060.050.0none France64.660.038.38.3 Germany69.464.051.58.4 Ireland69.160.653.84.6 Italy58.746.633.86.1 Sweden74.271.870.06.1 UK71.365.557.45.3 EU1566.959.746.67.0 EU2765.458.344.77.2* Source: European Commission (2008), Employment in Europe 2008. *EU25

8. Employment rates 1997-2008 Source: Employment in Europe 2009 Scandinavian states and the UK are high employment societies

9. High employment societies Who works l Women (full or part-time) l Older people (full or part-time) l Students (part-time) Requirements l Flexible labour markets Employers can offer part-time and/or temporary work l Non-domestic caring work Care for children and older people cared for outside the household unit By the market or by public systems l Individualised tax and benefit system (No advantages for staying at home)

10. Benefits of inflexibility l German vocational training system »High quality apprenticeship for most school leavers ensures qualification ‘Lehre’ which recognised and valued »National ‘Berufsbilder’ define qualification »Dual system of employers and state »Organised by employers with trade union input l Trade off »Employers cannot easily dismiss employees (Numerical flexibility) »Employers have incentive to use employees flexibly (Functional flexibility) »So ‘beneficial constraints’ (Streeck) of inflexibility

11. Good and bad flexibility? l Both UK and Denmark appear highly flexible and have high employment – but in different ways l In the UK: »Flexibility on employers’ terms »Bad jobs and/or poverty? l In Denmark (also to some extent Sweden) »‘Flexicurity’ »Flexibility also for employees »Easy dismissal but high social protection »High spending on training and ‘activation’ (counselling etc) »‘Protect the worker not the job’