1. 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/ ) under grant agreement n°

2. 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
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3. 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
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4. Task 1: (i) Indicators on young’ integration
Aim: Description and analysis of country performance
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5. 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)
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6. 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
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7. 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’
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8. 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.
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9. Task 2: (i) Impact analysis
Source: European Labour Force Survey, own aggregations based on micro data
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10. 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)
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11. 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
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12. 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

13. 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
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14. 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

15. 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
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16. 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
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17. 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
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18. 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
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19. 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
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20. 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
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21. Task 4
Comparative Policy Overview of STW Transitions and Youth Labour Markets Dynamics, Performance and Effectiveness

22. 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”

23. 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) 23

24. 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. 24

25. 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 25

26. Joint Time Schedule for Tasks 3 and 4
: 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 26

27. 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

28. 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

29. 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

30. 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) 30