10-13 November, Belgrade. Youth Labour Market outcomes: The option of « flexicurity » Sandrine Cazes ILO-SRO Budapest

10-13 November, Belgrade. Introduction Presentation based on different (research) papers Goals: provide some tracks on possible workers organization’ role in improving youth LM situation-in particular in the debate on LM regulation and its impact on LM outcomes

10-13 November, Belgrade. Outline of presentation 1. Overview of the reasons behind youth labour market outcomes 2. The effect of LM regulation on LM outcomes: theoretical and empirical considerations 3. The option of “flexicurity”

10-13 November, Belgrade. Determinants of youth Labour market outcomes Not specific to youth (overall conditions) Aggregate demand Skill mismatch Role of Labour market regulations

10-13 November, Belgrade. Determinants (cont.) More specific to young people Demographics (size of youth cohort) Education Wages / Labour Cost Reluctance to hire first job seekers Barriers to access self-employment Role of Labour market regulation

10-13 November, Belgrade. Youth unemployment CZESHULVLTPLSKSL Youth u rate (%) Youth /Adult u ratio Share of youth/ total u

10-13 November, Belgrade. Youth unemployment AL*BiHBUHRMAMOROSM Youth u rate (%) Youth /Adult u ratio Share of youth/ total u 46.0 **

10-13 November, Belgrade. Role of Labour market regulation Hotly debated (for ex. IFIs have played a key role providing advices and policies prescritions on the topic). Generally, blaming the « rigidity » of the labour markets, with their full range of labour protection, for their poor performances.

10-13 November, Belgrade. Role of Labour Market regulation on LM outcomes No systematic nor clear-cut results on the impact of LM regulation on labour market outcomes Theoretical considerations The evidence

10-13 November, Belgrade. An example: the role of EPL Employment protection legislation Theoretical arguments EPL generates a number of effects on labour costs, E and productivity, some favourable and some unfavourable. Models suggest that stricter EPL may contribute to lower participation rates and employment, higher unemployment (LTU) and contribute to significant LM segmentation. Theory also suggests that stricter EPL may increase informal employment

10-13 November, Belgrade. Role of EPL (cont.) Evidence Macro/micro/over time analysis (OECD Job study, Eo 99, Nickell, Bertola, etc.). EPL has little or no effect on overall unemployment, but may have affect its composition; EPL may have a positive effect on the employment rate for certain groups of workers;

10-13 November, Belgrade. Role of LM regulation on LM outcomes In the same line, the impact of:  Unemployment benefit system  Minimum wage … could be discussed as there are no systematic nor clear-cut results on the impact of LM regulation on LM outcomes

10-13 November, Belgrade. Role of LM regulation on LM outcomes Need to capture the complexity of the institutional settings and their interactions Identify the various combinations of employment & social protection systems available to achieve a good balance between flexibility and security

10-13 November, Belgrade. Flexicurity as an option Workers organizations need to be aware of these trade-offs, in particular as: Policies promoting social dialogue, LM stability & higher E, rather than pure deregulation should clearly be on the political agenda of transition countries. « Flexicurity » as an option

10-13 November, Belgrade. Flexicurity as an option Presentation of the concept A way of enhancing the role of SP in the formulation, implementation and monitoring of Employment policies Important as LMI may have different effects on specific social groups, such as young people

10-13 November, Belgrade. Flexicurity as an option Need for a fine-tuning approach There are alternative to pure flexibilization Social dialogue is an important tool