Assessing the social impact of the crisis in the European Union Terry Ward, Applica sprl International Seminar on Early Warning and Business Cycle Indicators Scheveningen, The Netherlands 14-16 December, 2009

Objectives and data sources Aims: To identify social groups most affected by the crisis To assess how far protected by social welfare system Difficulties: Lag in effect of economic downturn on employment Lag in data becoming available Data sources (in EU): Monthly unemployment statistics Quarterly Labour Force Survey Short-term business statistics – production + employment by detailed sector Data on large enterprise restructuring (European Restructuring Monitor) Missing short-term sources: Social protection statistics on payment of benefits Detailed unemployment statistics – on characteristics of those registering Data on those losing their jobs – or having earnings cut

Approach To review past economic downturns and their effects on different social groups – to identify what might be expected Means in practice early 1990s and early 2000s for some countries Difficult to go back earlier, but probably less relevant To examine early stages of present recession to see whether same features evident – despite difference in origin of crisis Mainly on basis of EU Labour Force Survey and Short-term business statistics To assess extent of income support provided by social welfare system in EU Member States On basis of EU-SILC – but only data on income for 2004-2006 for all EU countries Starting-point – review of downturn in EU in early 1990s …

Employment developments relative to working-age population in 1990-94 downturn

Employment of men most affected during 1990-94 downturn

Young people under 25 affected even more

Older men aged 55-64 also affected

But women much less affected – though upward employment trend halted

Downturn in early 2000s affected only some countries – men + young people mostly

Employment rate of under 25s only slightly affected at EU level – constant since

Employment of 55-64 age group not affected at all – upward trend since later 1990s

Present crisis – limited effect on employment up to mid-2009 with marked exceptions

Men again affected most

Only marginal decline in employment of women – though large in some countries

Young people also affected as in past – though more reflected in unemployment

Older men less affected than in early 1990s – though decline in some countries

Upward trend in employment of older women has continued though at slower rate

Decline in output not yet reflected in employment – especially in some sectors

Short-time working scheme in Germany has maintained jobs to major extent

% of unemployed aged 25-59 receiving income support by months unemployed:

% aged 18-24 with income below 60% of median by months of unemployment:

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