Female's employment growth: the role of demography, employment intensity and human capital NEUJOBS WORKING PAPER NO. D16.1 Piotr Lewandowski, Iga Magda, Jan Baran, Olena Fedyuk, Attila Bartha

Introduction During the last two decades women’s employment rates have improved significantly in virtually all EU member states. At the same time the employment rates of men fell down. Increases in women’s employment were strong enough to alleviate the negative developments in male employment, so total employment rates rose. Yet, the observed changes were heterogeneous across countries and age groups. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Introduction The aim of the paper is to present a picture of female employment evolution in the EU over last 20 years with special attention paid to factors behind those changes. Quantitative analysis covers decomposition of female employment rates into (i) intensity, (ii) education and (iii) demography components. For more details see Neujobs WP D Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Change in female employment rates – 1990s Significant improvement among women aged and … … but little change for younger and older women. Signs of convergence in female employment rates, especially for the prime- aged women. Outstanding economies: – IE and NL – strong improvements in all age groups 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Change in female employment rates – 2000s The 2000s brought a different age pattern of employment changes Employment rates of younger women decreased in majority of EU countries … … whilst almost all positive changes were contributed by women aged and Outstanding countries: – DE – the strongest improvement for women aged – ES – positive change in most age groups besides severe economic downturn 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Decomposition: intuition behind What caused improvements in women’s employment rates? Three possible explanations: – effect of demographic structure shift: For instance, if the share of prime-aged women increases, the overall employment rate rises as this age group has above-average employment rates. – impact of changes in educational structure: As more educated women experience higher employment rates, improvement in educational structure rises employment rates. – improvement in intensity factor: It reflects changes in the institutional setting shaping individual labour supply curves. Simply speaking, more women, besides their socio-demographic characteristics, works in the market. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Decomposition: maths behind A change in total employment rate (age group 15-64) can be decomposed into the contribution of components determined by the characteristics of labour force (LZ), demographic factor (D), labour utilisation intensity (I) and quality of workforce (J). 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary where: K – analysed moment of time; O – reference moment of time; ER – employment rate; P – population size; w – level of education (tertiary, secondary, primary); p – gender; k – age group (five-year age groups between 15-64)

Results for EU 12 in 1990s Intensity improvements contributed to ¾ of total women’s employment growth in EU12 in both decades. In 1990s, significant improvement of employment of women aged is explained by a simultaneous increase in all three components Demographic factor was important for specific age groups, but had virtually no effect on total change. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary Improvements in education structure accounted for 30% of female employment growth, and were uniformly distributed between age groups

Results for EU 15 in 2000s Intensity improvements played a key role, but the contribution of older age groups was significantly higher than that of prime-aged women. Postive influence of demographic factor also moved towards older cohorts, but overal demographic factor had little negative effect on total female employment change. The size of quality contribution was similar to the previous period, indicating that women’s qualifications steadly rose. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary Negative intensity contribution of young women - females postpone entering the labour market. It coincides with rising incidence of tertiary education.

1990s (EU12) vs. 2000s (EU15) In 2000s, greater intensity contributions moved towards women of older age groups. Rising and positive contribution of intensity among women outweighted declining and negative intensity of men. Quality contribution among women was higher than among men. Women’s contribution played a crucial role in invigorating Europe’s employment. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary 1990s 2000s WomenMenTotal EU12 (1992 – 2000) Intensity Quality Demography All All w/o demographics WomenMenTotal EU15 (2001– 2011) Intensity Quality Demography All All w/o demographics

Results for NMS in 2000s Intensity growth among women aged was the main factor driving women’s employment rates in the NMS but: – The contribution was smaller than in EU15 and… – among women aged over 60 intensity declined. A pronounced contribution of a quality factor in NMS which can be attributed to tertiary education boom amongst younger cohorts. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary Demographic structure in NMS is different than in EU15, but so far demographic factor had little total effect on employment rate.

NMS vs. EU15 (2000s) Both NMS and UE15 exhibitted similar age pattern of intensity contribution, but its total was negative in NMS. Intensity contribution of women aged was weaker in NMS (both in absolute and relative terms). Greater quality contribution in NMS compensated, to some extent, poor intesity contribution, especially in case of prime-aged women. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary NMS UE15 WomenMenTotal EU15 (2001– 2011) Intensity Quality Demographics All All w/o demographics WomenMenTotal NMS12 (2001– 2011) Intensity Quality Demographics All All w/o demographics

Potential sources of female employment developments 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary CountryAge group Major policy factors behind women’s employment intensity (+: success, -: failure, N – neutral, i.e. no evidence of any visible significance) Estonia promoting tertiary education for women (+) - school-to-work transition programs (N) - formal / institutional pre-school child-care (+) - flexible approach to paternity benefits, increasing role of men in child-care (-) Spain25-44-part-time and other forms of flexible contracts (+) -increasing level of education (+) -more equal share in parental responsibilities (N) -immigration that helps to resolve care responsibilities tension for the native women (+) Poland part-time and other forms of flexible contracts (-) - increasing level of education (+) -family / work reconciliation (-) Germany increase in retirement age (+) - collective agreements on reducing the overall work time and introducing more flexible contracts (+) - active ageing programs and lifelong learning programs (N)

Summary In 1990s, employment rates in EU rose mainly among prime-aged women. In 2000s, significant improvements were observed among women aged 45+, especially in the EU15, whilst younger age groups (under 25) experienced noticeable decrease. Decomposition reveals that in both decades the intensity factor was the primary source of positive change. Rising qualification level of female population played a significant role as well. In 2000s, it was especially strong in the new member states because of tertiary education boom. So far demographic factor had no or little impact on total female employment rates. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

Policy implications Falling employment rates of young women indicate that females postpone beginning of their job careers due to obstacles to balancing work and (tertiary) education. Older women experienced greatest improvements, but their employment rates are still significantly lower than those of prime- aged women. There is a noticeable room for future action, especially in Southern Europe and CEE countries. These actions should take into account potential country-specific impediments to further employment growth of women aged 50+. Flexible forms of employment constitute an important tool for increasing women’s participation, although they may lower women's wages, as discussed further later in this session. 1.Introduction 2.Changes in employment rates 3.Decomposition method 4.Decomposition results 5.Policies behind 6.Summary

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