Improving Employment Outcomes for Disadvantaged Groups: The Irish Context Philip J. O’Connell Pobal Conference: Creating an Inclusive Labour Market 9th November, 2016, Dublin City University

Outline Major trends in the labour market Pathways to Work 2016-20 Long and very-long term unemployment The collapse of the labour market for young people The growing importance of education Pathways to Work 2016-20 Expanding scope and coverage Challenges for social inclusion

Total and long-term unemployment rates - Total unemployment up to 15% in 2012, below 8% in Sept 2016 - Long-term unemployment 63% in 2012, now about 50%

Long-term unemployed JobSeekers (JB+JA) on Live Register As unemployment falls, alarming growth of unemployed >3 yrs

Survival rates on the Live Register - Only about 25% of those unemployed for up to 6 months are still unemployed 6 months later – down from 39% in 2009

Survival rates on the Live Register - about 55% of those already LTU (1-2 yrs) still unemployed 1 yr later - about 2/3 of those unemployed for 2+ yrs still unemployed 1 yr later

Trends in Unemployment Total unemployment has fallen LTU has fallen Very LTU has increased, now beginning to fall Less than half of LTU escape unemployment About 40% of exits are to jobs Some indication that activation is reducing long-term unemployment Recovery has seen the growth of a substantial group with multiple disadvantages who stay unemployed for very long period

Employment 2007, 2012, 2015 2007 2012 2015 2007-2012 2012-2015 Employment (000) 15-24 years 333 154 148 -54% -4% 25 years and over 1,823 1,695 1,786 -7% +8% All 2,156 1,849 1,939 -14% +7% Youth share (%) 16% 8% Employment rate (%) 50% 28% 29% -44% +1% 69% 59% 64% Total employment fell by 14%, then grew by 7% Youth employment contracted by 54% during crisis and continued to fall during recovery

Unemployment by Age Group, Q2 2016 Under 25s have very high unemployment rates, but account for just 20% of total unemployment – 70% of unemployed are aged 25-54 Number Unemployment rate (%)

Employment by Education - Number employed with lower 2nd education or less down by half - Employment of graduates and post 2nd education expanded through crisis and recovery 2007 2012 2015 2007-2012 2012-2015 000s % change Lower Secondary 482 259 251 -46 -3 Upper Secondary 583 449 463 -23 3 Post Leaving Cert 222 233 236 5 1 Third Level 745 823 907 11 10 All 2109 1800 1919 -15 7

Unemployment rates remain high for those with Lower 2nd or less Post-leaving cert level education had higher unemployment than Leaving cert during crisis Are PLC qualifications meeting labour market needs?

The impact of trends in demand for education and skills Declining demand for low qualificatons Unlikely to replicate the last cycle with expansion at top and bottom of occupational structure Need to invest in skills of poorly qualified

PtW 2016: 6 Strands Enhanced engagement with unemployed people of working age Increase the employment focus of activation programmes and opportunities Make work pay – Incentivise the take-up of opportunities Incentivise employers to offer jobs and opportunities to unemployed people Build organisation capability to deliver high quality services to unemployed people Build workforce skills

2 Key Elements in PtW 2016 Consolidation Development Continued focus on LTU and young, 2016/7 High-quality, effective, efficient sustainable PES Development Expand activation services to other non-employed of working age as economy moves closer to full employment

Development: expansion of activation services: PtW identifies: Qualified adult dependants of DSP clients, Part-time workers, Unemployed but not in receipt of welfare payment, People with a disability, Homemakers and carers Students Still rationing services Some targets for social inclusion: Lone parents with young children People with disability Young and old Travellers and non-Irish nationals Ex-offenders

Tensions in a more inclusive approach Targeting vs right of access to services Scarce resources should help those most in need /can benefit Need to promote socially inclusive labour market Efficiency vs equity Clear identification of objectives Take account of full costs and economic and social benefits Activation vs support Balance between conditionality and avoiding poverty Work 1st vs train 1st Should be driven by client needs rather than macro-economic conditions

Expansion of reach of PtW Challenges Research shows that activation is most effective for those who are ‘job-ready’ The expanded PtW target group is very heterogeneous We know little about what measures are most likely to work PES needs to learn from of NGOs, community and local development organisations Culture of active inclusion and equality Capacity, resources and skills to constructively and effectively engage International experience e.g. affordable childcare for lone parents Need for realism

Further development of services for un/non-employed Activation measures need to take account of greater diversity of skills, experiences and motivations of jobseekers Develop DSP capacity and skills in ‘back to work’ counselling ALMPs should be effective stepping stones to decent sustainable jobs PES/DSP/SOLAS/ETBs need to deliver effective education, training, work experience and career guidance – rebalance ALMPs Replace JobBridge with work experience programme that meets needs of jobseekers and employers JobPath Ensure coordination with PES, training etc Provide supports for those with multiple disadvantages Monitor and evaluate Continuing supports for those who have found work

Conclusion As unemployment falls it becomes necessary and possible to adopt more inclusive client-centred investment in employability of all with capacity and desire to work Opportunity to develop world-class employment service Prevent long-term unemployment and underemployment Match employment goals of job seekers with needs of employers Build workforce skills for good quality productive employment

Appendix Unemployment 2007, 2012, 2014 2104 2007-2012 2012-2014 Unemployment (000) 15-24 years 31 59 39 90% -34% 25 years and over 74 236 175 221% -26% All 105 295 215 181% -28% Youth share (%) 30% 20% 18% Unemployment rate (%) 9% 28% 226% -27% 5% 14% 10% 198% Unemployment increased by 180%, then fell by 28% Adult unemployment increased by 221%, then fell by 26% Youth unemployment increased by 90%, then fell by 34% Youth labour force participation fell from 55% in 2007 to 37% in 2014