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International Database on Employment and Atypical Labour (IDEAL)


Publication number: 752
Authors: E. Berkhout, M.J. van Leeeuwen
Commissioned by: Randstad
Published by: SEO Economisch Onderzoek
ISBN: 90-6733-227-5

The aim of IDEAL is threefold: 

  • to present an overview of the current international labour market situation, with a specific focus on the Lisbon targets on participation & unemployment set out for 2010 by the European Union, 
  • to address present and future trends that influence international labour markets and labour relations, and may help or hinder the achievement of the Lisbon targets, 
  • to focus on the different international developments in several types of flexible labour relations, including agency work as a distinctive type, and the future role that they might play in the European Employment Strategy.

Participation & unemployment 

For the realisation of the strategic social goal of an employment rate of 70 % for the European Union as a whole by 2010, the large southern European countries (Spain, France, Italy), will be the key for determining success for the European overall average. Their attention should strongly be focused on the increase of the participation rates of women and the elderly. German employment is also stagnating, at too low a level, but very important for the EU average. To bring unemployment down to 4% on average in the EU seems unrealistic. The main target for policy measures should be laid on the bigger countries like Germany, France, Spain and Italy, as these countries were unable to match the achievements that most of the smaller countries and the UK made in the past. But despite that positive development, after three years of recession there is no country where the recent unemployment rate is below 4%, the EU average is now 8%. Also, compared to the US and Canada, unemployment in the EU is much more persistent, because it consists for 40% of people who are unemployed for already more than a year. 

International trends influencing labour markets 

The OECD labour markets will be influenced by socio-demographic and economic trends like ageing, ‘feminisation’ (rising participation of women), ‘intellectualisation’ (rising educational level), internationalisation, de-industrialisation & flexibilisation. For both policy makers as well as the agency worker business these trends might create new opportunities. The outflow of older workers will be much larger than the inflow of new workers. This demographic gap will also persist if the Lisbon participation targets are met. Expanding the employment opportunities for older workers, to try to keep them in the labour force, will therefore become increasingly important. More female workers and higher educational levels have changed the supply of labour, and as a result more flexible labour relations are wanted. Internationalisation and de-industrialisation establish the same need for flexibility, but from the employers perspective. The 40 hour job-for-life has become more or less outdated. In order to meet the needs of the future labour market, temporary entrance of all kind of workers, from inside as well as from abroad has to be arranged, also by agency-work organisations. 

Flexible labour relations 

Flexible labour relations come in various forms. All European countries experienced a steady growth of part-time work since the 1980s. Part-time work covers mainly female workers, low- and high-skilled. It is very popular in the Netherlands (34% of total employment), followed by Switzerland (25%) and the UK (23%). In Southern Europe part-time work is less common. 

A relatively large share of part-time workers is not looking for full-time employment at all. Higher shares of female part-timers in a country reflect higher preferences for part-time work among female employees: differences in part-time work between countries are a voluntary, `employee-driven’ phenomenon. The rising share of part-time work may thus be the effect of women’s wish to balance work and private life, combined with increasing female participation. 

Temporary work in general (including agency work and limited duration contracts) covers mainly younger workers, mostly low skilled (or actually in higher education) Shares are highest in Spain (31%) and Portugal (22%, doubled between 1995-2000). Scientific research publications find that temporary work acts as a ‘stepping-stone’ to permanent work in several countries, though not in Spain. Spain is a special case; a high incidence of overall temporary work comes with a relatively low share of agency work but a very high share (76% of all temporary workers) of workers who would actually prefer a permanent job. This implies that in Spain temporary work is mainly an employer-driven phenomenon. But in Portugal and the Netherlands many temporary workers do not seek a permanent job, which is more a sign of employee-driven temporary work in these two countries. In the German-speaking countries temporary work is dominated by vocational training periods. 

Agency work 

Penetration rates (agency workers as a % of total employment) are highest in the Netherlands, the UK and France. The manufacturing industry is hiring more agency workers than the services industries, which explains the relatively low share of women among agency workers. The trend however is rising in services and falling in manufacturing. Although remarkable differences exist between countries, on average agency workers are less educated and very young. In some countries agency work is restricted through institutional laws. Those restrictions can not always be justified on objective grounds, as the potential benefits of agency work (such as the ‘stepping-stone effect’ or the job-matching capabilities) are often underestimated. 

The role of agency work is specifically addressed by the EU Employment Taskforce chaired by Wim Kok. Apart from the above mentioned stepping-stone effect, agency work is also believed to reduce unemployment by improved job matching capabilities and through lessening of wage pressures, hence offering considerable economic benefits by increasing labour market flexibility. But average wages are lower for temporary workers and possible negative effects like underinvestment in agency worker training should also be addressed. The policy advice of the Taskforce is that much may be gained from deregulating along the lines of the Netherlands and Scandinavia: combining flexibility with adequate security for workers. This requires that social partners should also be more involved, and the perception that increased flexibility automatically leads to increased insecurity should be overcome. If the Lisbon 2000 targets have to be reached, it is advisable for both governments and social partners to “remove obstacles to the setting up and development of temporary work agencies as effective and attractive intermediaries in the labour market, offering improved job opportunities and high employment standards”. 

 


Category: 2004