Policy Performance and Evaluation Methodologies Work package 3 Policy Performance and Evaluation Methodologies Kick off meeting Brighton 1st April 2014 The research leading to these results has received funding from the European Union Seventh Framework Programme (FP7/2007-2013) under grant agreement n° 613256.

Motivation: Differences in Country performance Outline Motivation: Differences in Country performance Aims/objectives/methods in relation to proposed research Task 1: Quantitative Analysis of Country Performance (i) Indicators on youth integration (ii) Multi-dimensional characteristics/Indices (iii) Analysis of transition rates (iv) Econometric analysis of key drivers of transition rates Task 2: Evaluation of policy effectiveness (i) Impact of youth-related labour market policies (ii) Analysis of social costs and benefit analysis Deliverables/team/progress 20/09/2018 www.style-research.eu

Differences in Country performance – Unemployment Note: TR from OECD Data, Data not available for MT before 2007 Source: European Labour Force Survey Micro data, own aggregations 20/09/2018 www.style-research.eu 3

Task 1: (i) Indicators on young’ integration Aim: Description and analysis of country performance 20/09/2018 www.style-research.eu 4

Task 1: (ii) Individual and composite indicators Aim: Analysis of performance measures and indices Multi-dimensional analysis useful to understand performance for individual countries’ positions with regard to particular objectives Also: Longitudinal analysis of particular indicators (e.g., how country improved participation in VET) Method: Analysis of informative index measures Variety of indicators would result complex picture Composite indicators on performance (Plantenga et al. 2009) Radar charts as analytical tool (simplified presentations/highly intuitive to non-experts, Schmid et al. 1999) Index measure (e.g. 12 dimensions of Table): Variables would be standardised to form (weighted/unweighted) index (Cox et al. 2011) ‘Bechmarking’: linear transformation of index (e.g. compare to best country or best absolute performance) 20/09/2018 www.style-research.eu 5

Task 1: (iii) Analysis of transition rates Aim: Understanding differences in transition rates of young people using one of the ELFS retrospective questions (‘status one year before’) EU-wide comparison of proportions of people who made transition out of the education system across Europe Transitions into employment Transitions into combinations of education and work Method: Comparison of transition rates over time 20/09/2018 www.style-research.eu 6

Task 1: (iv) Econometric analysis of transition rates Aim: Key drivers of transition rates Method: Micro-econometric analysis of EU LFS retrospective question Importance of individual characteristics Using a pooled data set of EU-micro data, estimate the country-differences in transition rates given Example: Lucchino and Dorsett 2012 in ‘Youth unemployment: the crisis we cannot afford’ 20/09/2018 www.style-research.eu 7

Task 2: Effectiveness of ALMP for young people Economic mechanism/link to comparative framework, Task 4 Improvement in young people’s human capital increases labour market performance To large extent outcome of effective institutions delivering (vocational) education and training (VET) and other programmes helping for young people Quality, equity and access of young people, in particular of vulnerable groups, are further factors influencing effectiveness, which will need to be accounted for in the analysis Aim: Estimate % reduction in youth unemployment from increase in VET/other ALMP Aggregate impact (Schmid et al. 2001, Bassanini/Duval 2006) Institutional reform/EU-Level: How creating capacities in employment/VET system can lower youth unemployment Country: How policy can reduce youth unemployment in existing ‘employment regime’ by increasing capacity of VET and young people’s ALMP. 20/09/2018 www.style-research.eu

Task 2: (i) Impact analysis Source: European Labour Force Survey, own aggregations based on micro data 20/09/2018 www.style-research.eu 9

Task 2: (i) Impact analysis Method: Panel data regression models explaining youth unemployment by ‘Employment/VET’ (or other ALMP) capacity exploiting regional and time variation Obtain parameter estimate how youth unemployment would decrease by improving offer made to young people (ceteris paribus) Control for endogeneity of ALMP and other variables entering econometric model (Anderson and Hsiao 1981) Unemployment main driver for observed level of VET, in particular following the crisis Econometrically, VET is ‘endogenous’ Analysis needs to ‘disentangle’ endogenous and autonomous variation (only the latter can be influenced by policy reform to reduce youth unemployment) 20/09/2018 www.style-research.eu

Task 2 (ii) Cost-Benefit Analysis Aim: EU-wide short- and long-term fiscal and social impact of reductions in youth unemployment in monetary terms (in present values) Method: Valuation and simulation of impacts a) Effects of reducing youth unemployment b) Effect on human capital stock c) Average life-course impact of youth unemployment d) Human capital impact on growth e) Social and fiscal improvement due to the reduction of youth unemployment in EU and in individual countries 20/09/2018 www.style-research.eu

Team/progress and deliverables Team: Dr Stefan Speckesser (Lead), Ms Arianna Tassinari (Indicators), Mr Vahé Nafilyan (Econometric and cost-benefit analyses) Progress to date: EU Microdata access, Staff training (EU SILC and ‘Dynamic Panel Data’ at Cemmap) Deliverables D3.1 Key indicators and drivers of youth unemployment, such as key characteristics of young people, economic circumstances (business cycle) and policy variables [month 12] D3.2 Causal impact of youth-related policy measures and cost-benefit analysis [month 15] Linking: Linking quantitative and qualitative evidence within WP (‘Synthesis report’) Put forward methodological limitations and further data investment (link to WP4, ‘Inventory’) 20/09/2018 www.style-research.eu

Task 3 Task 3: Qualitative, Case Study-Based Analysis of Performance and Policies Motivation – Comparative framework Institutional arrangements Effects Policy innovations due to the crisis 20/09/2018 www.style-research.eu

Comparative Framework Walther & Pohl’s youth transition regimes as a starting point Universalistic, e.g. DK, FI, SE Liberal, e.g. IE, UK Employment-centred Dual training/large apprenticeship system, e.g. AT, DE School-based, e.g. BE, FR, LU Mixed, e.g. NL Sub-protective/Mediterranean, e.g. EL, ES, IT, PT, TR Transitional/post-socialist, e.g. CZ, EE, HU, PL, SI, SK

Education and training Basic education Comprehensive vs. multi-tracked schooling Number of obligatory years of general schooling Higher education Public vs. private universities Access to universities (and public funding) Vocational training (softens the school-to-work transition) Pure vocational schooling vs. dual apprenticeship vs. pure on-the-job training Role of certificates (standardisation vs. firm-specific skills) Task rotation for apprentices within firms Traineeships after tertiary education 20/09/2018 www.style-research.eu

Active labour market policies Job-counselling and educational guidance for adolescents May improve matching quality Employment subsidies Increases labour demand Bonuses for retaining apprentices Increases demand for apprenticed youths Subsidization of education, training and travelling costs Start-up grants for young people (promotion of self-employment) Reduces youth unemployment and may increase labour demand Work experience programs in public sector (job creation) May weaken the loss of human capital 20/09/2018 www.style-research.eu

Employment protection Dismissal protection for apprentices after probation period Increases hiring and firing costs and hence decreases labour demand but also lowers negative effects in economic downturns Extended probationary periods for youths Decreases hiring and firing costs Regulation of temporary employment and internships Increases flexibility of firms but decreases security and permanent income of youth workers Severance pay Increases firing costs 20/09/2018 www.style-research.eu

Inclusion in general minimum wage May reduce labour demand while labour supply increases Firms may react by lowering training-on-job for compensation Specific youth minimum wage May lessen adverse employment effects for youths but lowers their social security 20/09/2018 www.style-research.eu

Benefits and labour taxation Maximum duration and strictness of welfare benefits for youths compared to older beneficiaries May reduce incentives (search intensity and labour supply) Child allowances May increase the reservation wage Minimum working years necessary to receive income replacements May exclude young workers from benefits Dependencies of benefits on family relations May shorten or prolong residence in parental homes, which in turn might have an effect on education and labour supply 20/09/2018 www.style-research.eu

Effects on differently skilled young people and vulnerable groups Indicators (employment, wages and job quality) (to be coordinated with tasks 1, 2 and 4) Permanent and temporary employment (Long-term) unemployment Average wage, wage distribution and wage mobility Permanent income (discounted present value of lifetime income) Sustainability (duration of new employment) Effects on different (vulnerable) groups – separate reporting on: Low skilled vs. high skilled Children of lower class vs. upper class parents (measured in income/education) Female vs. male Ethnic minorities Disabled people 20/09/2018 www.style-research.eu

Task 4 Comparative Policy Overview of STW Transitions and Youth Labour Markets Dynamics, Performance and Effectiveness

Task 4: Aims & Objectives To provide an overview of policy measures adopted by MS to support STW transitions Special focus on innovative policies aimed at reducing the vulnerability of new labour market entrants, incl NEETs To present a comparative mapping of youth-related policies & their effectiveness, esp. re labour market outcomes In dialogue with key stakeholders, To outline current & future youth-related challenges define viable innovative policies to improve STW transitions & identify future youth-related policy changes/trends To feed into the Inventory/Database of WP4 (Task 4) EU-wide, but focus on case study countries (DE, EE, ES, NL, PL, SE, TR, UK) (see task 3) + BE, DK, EL, SK (WP4/Task 4) Different types of templates in terms of “information density”

WP 3 – Task 4: Comparative Policy Overview Youth-related policies aimed at: Facilitating the STW transition Developing relevant labour market skills Supporting a first work experience Improving access to the labour market/first job, esp for NEETs Policy arrangements and policy innovations! (see also contributions to task 3) www.style-research.eu 23

WP 3 – Task 4: Methodology (I) Comparative Policy Review International (not just EU) scope, esp. re innovative policies Comprehensive & inclusive Quasi-systematic No stand-alone, i.e. interlinked with other WPs/Tasks, esp WP 3/Task 3 & WP 4 Types of info sources EU, national & international documentation Key published material, e.g. official evaluations; academic papers/reports; etc. ‘Grey’ literature, incl media, websites, etc. Survey data, e.g. employer surveys, STW surveys, e.g. CEREQ’s ‘Génération’ series; etc. www.style-research.eu 24

WP 3 – Task 4: Methodology (II) Development & use of comparative templates/protocols (also relevant for task 3) Collection & analysis of comparative info in selected MS, with special focus on innovative policies & labour market outcomes (also relevant for task 3) Identification & engagement of key stakeholders at EU level & in selected MS On-going interaction with stakeholders re youth-related challenges; innovative policies & future policy trends (based on structured proforma/questionnaire or workshops) Production of Comparative Synthesis Policy Overview www.style-research.eu 25

Joint Time Schedule for Tasks 3 and 4 2014-2017: Co-ordination with other tasks within WP 3 and other WPs, esp. WP 4 (Task 4) 09/2014: Development of templates/protocols for collecting & analysing comparative info in selected MS 09/2015: Delivery of country fiches and input on policy innovations 09/2015: Stakeholder dialogue 12/2015: Completion of comparative data collection & analysis 06/2016: Comparative Policy Overview Report www.style-research.eu 26

Team for Tasks 3 and 4 Werner Eichhorst and Michael Cox (IZA) Kari P. Hadjivassiliou; Christine Bertram; Catherine Rickard; Arianna Tassinari (IES) Partners for case studies (IES, UNIOVI, UEK, SOFI, UVT, UT, KU) + input from partners involved in other WPs 20/09/2018 www.style-research.eu

Task 5: Policy synthesis and integrative report (I) Collect findings from tasks 1-4 Link the results of the quantitative and the qualitative analysis Define clusters of countries regarding the institutional framework of their youth labour markets Compare the effectiveness of active labour market policies and balance their costs and benefits Conclude findings from comparative policy overview Integrate input from WP 4-10 WP 4: Drawing on the dimensions of vulnerability and gender mainstreaming in order to assess the effects of policies and institutional arrangements on different groups WP 5-10: Drawing on the detailed findings regarding labour market mismatch, family and cultural barriers to employment as well as youth self employment and flexicurity approaches Highlight best and worst practices Policies, programs, measures and institutional arrangements that have been proved to be successful in creating sustainable youth employment and facilitate the school-to-work transition, especially for NEETs and vulnerable groups 20/09/2018 www.style-research.eu

Task 5: Policy synthesis and integrative report (II) Put forward policy recommendations Recommendations for each country which steps have to be made in order to improve the situation of young labor market entrants. Particularly country-specific conditions will be addressed Put forward methodological recommendations How to monitor school-to-work transitions best in the future Team: IZA as coordinator with input from other tasks in WP 3 as well as additional information gathered from all partners in STYLE (as mentioned in outline) 20/09/2018 www.style-research.eu

Report on key indicators & drivers of youth unemployment (D.3.1, M12) WP3 Deliverables Report on key indicators & drivers of youth unemployment (D.3.1, M12) Report on impact of youth-related policy measures (D.3.2, M15) Country Case Study Fiche Report (D.3.3, M18) Comparative Overview Synthesis Report (D.3.4, M24) Policy Synthesis & Integrative Report (D.3.5, M30) www.style-research.eu 30