China-EU Employment and Social Security Policy Dialogue &Workshop 中国-欧盟就业和社保政策对话与研讨会 China-EU Employment and Social Security Policy Dialogue &Workshop

Social protection and employment trade off or synergies Jean-Yves Hocquet （ENSSS Higher National school for social security) （jyhocquet@gmail.com）

1 Large diversity of national situations 2 European policy of social coordination under stress 3 Adjusting employer social contributions 4 One(often) forgotten goal ,reducing inequalities 5 Social protection as an employment opportunity

1 Large diversity of national situations a wide range of percentage of the gross domestic product (GDP) dedicated to social spending social spending has acted as an automatic stabilizer against the economic crisis for the whole EU24 the breakdown of the social spending and resources varies from country to country.

a wide range of percentage of the GDP dedicated to social spending SP/GDP EU average 29% Danemark 34,00 % Latvia 15,10 % Unemployment EU average 10,90 % 2013 Germany 5% Greece25%

social spending has acted as an automatic stabilizer against the economic crisis for the whole EU 24 Contributions to growth in real public social expenditure of cash and in-kind benefits in the EU

a partition in the field of resources Trends in the proportion of public contribution devoted of social protection financing 1996-2011

Conclusion part 1 :prerequisites for policies There is a risk to focus just on the relation between labour costs and employment and to ignore other factors: tax system wage moderation investment in education and training …

2 European policy of social coordination under stress the social security coordination illustrates the challenges confronting the various MS in this regard the open method of coordination (OMC) a way to progress on a common approach about social protection, and a bridge between employment and social protection policies

the social security coordination illustrates the challenges confronting the various MS in this regard the EU has provided common rules to protect social security rights when moving within Europe ( to-day EU 28 + Iceland, Liechtenstein, Norway and Switzerland) since the very beginning to facilitate the circulation of workers the rules on social security coordination do not replace national systems because they were considered as a main feature of the national identity

the social security coordination illustrates the challenges confronting the various MS in this regard 50 years ago most of the mobile workers were migrant workers today the mobile worker is more a border worker or a worker who in the same year, can alternate or enjoy simutaneously various status new forms of work organization are helping to shake the traditional model

the open method of coordination (OMC) a way to progress on a common approach about social protection, and a bridge between employment and social protection policies jointly identifying and defining objectives to be achieved (adopted by the Council); jointly established measuring instruments (statistics, indicators, guidelines); benchmarking, i.e. comparison of EU countries' performance and the exchange of best practices (monitored by the Commission).

the open method of coordination (OMC) a way to progress on a common approach about social protection, and a bridge between employment and social protection policies draft joint employment report from the Commission and the Council accompanying the communication from the commission on the annual growth survey 2016 : “MS have continued to modernize their social protection systems to facilitate labour market participation and to prevent and protect against risks throughout the life course.”

Conclusion Part 2: in search for a balanced approach to keep and adapt social protection to maintain solidarity in a context labour costs reduction and deregulation

3 Adjusting labour contributions Two examples of the adjustment of employer contributions decrease of social contributions experience rated contributions

reductions in employers’ contributions labour costs as a whole are related to labour productivity payroll tax cuts targeted on lower-wage earners are generally found to be more effective in boosting the employment prospects of disadvantaged groups

reductions in employers’ contributions Nominal unit labour cost developments in the EU-28, average year-on-year changes, 2003-2008 and 2009-2013

reductions in employers' contributions Need for an education/communication plans better linking : employees’ contributions to their future benefits(wage claims moderation) . employers’ contributions to the cost they incur to the system (in terms of benefit payments),

experience-rated contributions experience rating for un employment benefits : firms are to internalize the costs they generate for the scheme from a complete pooling (single contribution for each company, regardless of its past layoffs) to a complete individualization of employer contributions (where each company bears the costs of past layoffs).

4 one (often) forgotten goal : reducing inequalities Inequality (Gini coefficient) of market income and disposable (net) income in the OECD -market income disposable income

one forgotten goal :reducing inequalities Contribution of social protection benefits and direct contributions on income to the reduction of income inequality

One(often) forgotten goal : reducing inequalities Scandinavian countries: low primary and disposable income inequality, with a relatively limited redistributive impact of transfers and contributions. others such as Ireland : high degree of primary income inequality and considerable redistributive efforts with transfers and contributions

Conclusion part 4:a concern not to forget in European countries benefits in cash have substantially larger outcomes for redistribution than direct contributions (F, Sw) Germany and the UK experience a more balanced impact of these two mechanisms.

5 New job opportunities Social services as employment opportunity ex LTC Importance of fight against frauds and errors to make employment sustainable

social services as employment opportunity Long-term care (LTC) is defined as a range of services and assistance for people who, depend on help for daily living activities and on some permanent nursing care In 2008, long-term care workers represented 0.3% of the total working-age population in the Czech and Slovak Republics, compared to 3.6% in Sweden and 2.9% in Norway and Denmark.

importance of fight against frauds and errors to make employment sustainable Fraud (e.g. undeclared work Aus 7 % Bulgaria 31%) undermines the confidence in the system: unfair competition deprivation of the social rights of workers

To conclude the Nordic model is faring rather well : - appropriate mix in goods and services, which could support highly skilled workers with high salaries high level of public service workers funded by a rather high level of taxes the UK has achieved some impressive results : limitation of wages but better integration into the labour market with an improvement of certain public services (health, education)

To conclude Key factor of success : clarity on the compromise between employment and social protection which lacks in a mere technical approach