global employment trends: scarred youth, the bulge of the ageing, and our well- being duncan...
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Global Employment Trends:
scarred youth, the bulge of the ageing, and our well-being
Duncan CampbellDirector, Megatrends Team
Research DepartmentILO
Even Roubini gets it wrong
What ought to be said, but what i won’t say about 2025
• Are we serious about a green economy?• Do we need to think about the Snowden
effect on labour markets?• Is there anyone here who can tell us about
technology and the labour market in 2025?• Is there any reason to fear … or instead should
we not cheer the rise of the global middle class?
The middle class ($4-$13 ppp) per day is growing in the developing world
What i will say
• The recovery from the Great Recession has been modest. Recovery in the labour market has been more modest still
• Why we should worry about unemployed youth
• What does aging imply for us?• Money matters, but it isn’t everything: some
results from behavioral economics
So, point 1
Growth is there, but still disappointing, and forecasts
remain unrosy
2.0
2.5
3.0
3.5
4.0Ap
r-11
Jun-
11Au
g-11
Oct-1
1De
c-11
Feb-
12Ap
r-12
Jun-
12Au
g-12
Oct-1
2De
c-12
Feb-
13Ap
r-13
Jun-
13Au
g-13
Oct-1
3
2013, IMF
2013, UN
2013, WB
2014, IMF
2014, UN
2014, WB
Absorbing new entrants to the labour market remains the
challenge
2'550
2'600
2'650
2'700
2'750
2'800
2'850
2'900
2'950
3'000
3'050
3'100
3'150
3'200
3'250
3'300
3'350
3'400
3'450
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Empl
oym
ent (
mill
ions
)
Pre-crisis trend
Estimated/Forecasted
Upper and Lower bound of the confidene interval around the
baseline forecast
62 mio.
81 mio.
Regional economic and labour market prospects 11
Regional economic and labour market prospectsLatin America and the Caribean
• Labour productivity remains below the world average...• ...and projected growth does not indicate potential for catch up
Regional economic and labour market prospects 12
Regional economic and labour market prospectsEast Asia
• ...as the economies in the region become more mature• Sharp increase in unemployment expected in the region from earlier low levels...
Global unemployment well over 200 million – but consider this as
the tip of the iceberg
4.8
5.0
5.2
5.4
5.6
5.8
6.0
6.2
6.4
6.6
140
150
160
170
180
190
200
210
220
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Unemployment rate (per cent)Un
emplo
ymen
t (milli
ons)
Total unemployment Unemployment rate
For one thing, duration of unemployment becomes an issue
as it converts cyclical unemployment into a structural
unemployment problem as measured by Beveridge curves, i.e.
a problem more immune to macroeconomic fixes
3
4
5
6
7
8
9
10
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Spain
Greece
United Kingdom
Canada
United States
Japan
Turkey
Brazil
South Africa
There is a NEET problem that is festering – i.e. young people not in
employment, nor education, nor training
0 5 10 15 20 25 30 35 40 45
NetherlandsLuxembourg
IcelandNorwaySweden
SwitzerlandAustria
SloveniaDenmarkGermanyAustralia
FinlandMalta
Czech RepublicCanada
BelgiumLithuania
New ZealandFrance
EstoniaPortugal
United KingdomPoland
United StatesLatvia
CyprusHungary
CroatiaKorea, Republic of
RomaniaBrazil
IrelandGreece
ItalySpain
BulgariaMexico
IsraelMacedonia, The former Yugoslav Republic of
Turkey
2007
Most recent year
Policy recommendations 19
Policy recommendationsAddress inactivity and skills mismatch through active labour market policies
+0.8%+3.9mil jobs
• Focus on active labour market policies to address structural issues...• ...could help add 3.9 million jobs in OECD countries by 2016
The tip of the iceberg is one thing, the rest of the iceberg another – we are still looking at a world in
which our work is largely unregulated and unprotected:
take «informality» as a measure. It certainly won’t be a solved
problem by 2025 … even in Europe
0
10
20
30
40
50
60
70
80
Africa Asia and the Pacific
Central and South-Eastern
Europe
Middle East Latin America and the
Caribbean
Mean
Maximum
Minimum
For informal work, there are few barriers to entry and minimal capital
needs.
But for many countries, education does not solve the problem of
attaining productive employment. The economy might not be able to absorb an educated workforce – in Europe as
well
010
2030
4050
Inci
denc
e in
per
cen
t of t
otal
em
ploy
men
t
Jordan Egypt Peru Macedonia, FYRArmenia Turkey
Bot
h se
xes
Fem
ale
Mal
e
Bot
h se
xes
Fem
ale
Mal
e
Bot
h se
xes
Fem
ale
Mal
e
Bot
h se
xes
Fem
ale
Mal
e
Bot
h se
xes
Fem
ale
Mal
e
Bot
h se
xes
Fem
ale
Mal
e
Incidence of undereducation Incidence of overeducationAggregate skills mismatch
Most of the behavioural economics literature shows that «scarring»
from exclusion from labour markets is a long-term and,
possibly permanent outcome
Point 2 -- aging
Population 60+ as (%) of total population
Source: UN population projections
Population 60+ as (%) of total population
Source: UN population projections
Old-age pension beneficiaries as a percentage of the population above retirement age, latest available year
Sources: ILO World Social Security Report, 2011
POLICY responses:AN INTEGRATED LIFE CYCLE AND INTERGENERATIONAL PERSPECTIVE
Promotion of employment and decent work key to meet ageing challenge and to mitigate the effects of ageing on social protection schemes
Replacement migration ILO approach underscores importance of a lifecycle and intergenerational
perspective Extending working lives and increasing participation rates of older workers is an
important policy response. However, a prolongation of working life may not be appropriate for everybody Attitudes towards old age, lifelong learning, working conditions, health and safety
at work and adequate working time and work organization during life cycle play major role.
•
POLICY responses
COMBATTING PREJUDICE AND AGE DISCRIMINATIONCOMBATTING PREJUDICE AND AGE DISCRIMINATION
Attitudes and prejudice major obstacle to opening up employment opportunities for older workersEU Eurobarameter Survey (2012): workplace age discrimination most
widespread form of discrimination Interventions at enterprise level major role to play
Importance of proactive approach: Age diversity and age managementConcrete actions have included awareness campaigns development
of tool kits, promotion of good practices and consultation with social partners.Austrian Industry Federation: www.arbeitundalter.atFrance: Sanction for firms not adopting some action to promote employment
of older workers
Older workers in EU lowest participation in training compared to other age groups
Research shows a mix of factorsEmployers less inclined to pay for training: Research on Netherlands found
positive effects of age specific subsidies (Picchio & van Ours, 2011)Workers who participated in firm specific training in their early careers retire
earlier than workers with general training background (Montizaan et al, 2008) Participation in training linked to prior education: In Germany it is not age per
se that explains participation in training but rather previous levels of qualifications (Bosch and Schief, 2007)
POLICY responses
FOSTERING EMPLOYABILITYFOSTERING EMPLOYABILITY
Point 3: what conclusions to draw from the foregoing?
What if we took productive employment more seriously as a
macroeconomic variable?
Why, first, would we do so?
Answer: It is fundamental to well-being
We don’t like others’ unemployment
Nor do we like inequality. It makes us feel as if we’re always trying to
catch up… (Hedonic Treadmill)
Unequal societies, in fact, create all sorts of pathologies
Here is the non-income related correlation
I predict that self-reported well-being will rise in significance as a
macroeconomic policy variable by 2025
Thank you
campbell@ilo.org
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