1. EUROPEAN DATA CENTER FOR WORK and WELFARE your direct access to EUROPEAN COMPARATIVE DATA - opinions - - indicators and statistics - - policies and institutions - WWW.EDACWOWE.EU Institutions or Market Forces? Employment insecurity among European workers in a period of financial crisis Heejung Chung Wim van Oorschot Seminar "The financial crisis, welfare state challenges and new forms of risk management" Aalborg, DK 2-3 March, 2011

2. BACKGROUND The flexicurity agenda of the European Commission - The balance between flexibility and security is key to success for the future of the European social-economy - A belief in the power of institutional arrangements to regulate the flexicurity balance, i.e. flexicurity policies do matter The financial crisis - Does economic depression lead to a larger imbalance between overall flexibility and overall security irrespective of flexicurity policies? - Or, how strong are institutions against market forces: do they make a difference in times of economic depression? - What is the gain of flexicurity policies, i.e. of a European way of organizing the social-economy, when the economy is down? And what are the costs? Interesting questions, but…

3. ANALYTIC PROBLEMS and SOLUTIONS Limits - No data about the actual balance between flexibility and security in countries - Let alone such data before, during and after the financial crisis Our partial contribution - Focus on the security aspect of flexicurity: subjectively experienced employment security by workers - Are employment security differences between European workers influenced more by institutional or by economic differences between the countries they live in?

4. RESEARCH QUESTION What is the relative contribution of institutional and economic context factors to the explanation of differences in feelings of employment insecurity among workers in European countries?

5. HYPOTHESES Workers will be less likely to perceive employment insecurity in countries with: Institutional factors 1. stronger active labour market policies 2. stronger passive lmp (unemployment benefits) 3. stronger EPL (workers with permanent contracts only) Economic market factors 4. higher average unemployment rate 2004/7 5. lower average employment rate 2004/7 6. higher ue increase in mid 2008 to mid 2009 7. lower average GDP growth 2004/8 8. lower GDP growth 2008-2009

6. HYPOTHESES Composition effects (individual level control variables) Employment insecurity higher among: - women, lower educated, with income from benefit, with minority background, without in-job training experience, with previous unemployment experience, with health problems, with no partner in paid work, with children, not being a union member, not having a permanent contract, with part-time contract, having no influence at work, working long hours, working in smaller firms, working in the private sector

7. DATA and METHODS Data - European Social Survey 2008, wave 4 - N=22 countries - people in employment < 65 years of age: N=20.809 Dependent variable “How likely is it that during the next 12 months you will be unemployed and looking for work for at least four consecutive weeks?” 1= likely + very likely, 0=else Independent context variables ALMP and PLMP, 2008: national spending as % GDP: Eurostat EPL: OECD, 2008 UE rates, employment rates, GDP growth: Eurostat Analysis random intercept, multi-level logistic regression

8. FINDINGS Perceived employment insecurity by country % of employed people

9. FINDINGS Percentage of variation in Y at country level Total (ICC; empty- or null-model): 17% Composition effects: 2% Other context factors: 15% Now, which other context factors play a role?

10. FINDINGS Model BSER 2 a 0-1 PLMP expenditure/unemployment rate-4.0051.01842.0 0-2 ALMP expenditure/unemployment rate-6.7511.92136.5 0-3 LMP expenditure/unemployment rate (ALMP+PLMP) -2.6220.67141.7 0-4 EPL for regular workers0.1660.2662.2 0-5 EPL for temporary workers0.1310.1573.9 0-6 Unemployment rate average0.1000.06011.3 0-7 Employment rate average-0.0720.02232.2 0-8 Change in unemployment 2008 - 20090.1550.04931.8 0-9 GDP growth rate average0.2510.09026.6 0-10GDP growth rate for 2009-0.1210.03436.8 ‘Bi-variate’ effects of context vars on perceived employment insecurity (controlled for composition effects) B in italics: P <.10, B in bold: P<.01 a Percentage explained variance at country level

11. FINDINGS But what about multi-variate effects? Due to country N of 22 we cannot include all context vars in a single model, so three steps: 1. Model with institutional vars 2. Model with economic vars 3. Model combining vars with significant effects in 1 and 2

12. FINDINGS Multi-variate effects of institutional context variables (controlled for composition effects) B in italics: P <.10, B in bold: P<.01 a Percentage explained variance at country level Employment Insecurity Model 1 BSE PLMP exp as a % of GDP ALMP exp as a % of GDP LMP exp as a % of GDP (= ALMP+PLMP: multi-collinearity )-2.0910.535 EPL for regular workers-0.0410.204 EPL for temporary workers0.1130.117 EPLreg* permanent0.1840.086 variance level 20.1900.068 R 2 a 50.1% N level 218 N level 115508

13. FINDINGS Multi-variate effects of market context variables (controlled for composition effects) B in italics: P <.10, B in bold: P<.01 a Percentage explained variance at country level Employment Insecurity Model 2 BSE Employment average-0.0770.014 Unemployment change 08-09 GDP growth average GDP growth 08-09-0.1280.023 variance level 20.1560.050 R 2 (from model2) a 73.5% N level 222 N level 117936

14. FINDINGS Multi-variate effects of institutional and market context variables (controlled for composition effects) B in italics: P <.10, B in bold: P<.01 a Percentage explained variance at country level Employment Insecurity Model 3 BSE LMP exp as a % of GDP-0.1480.092 EPL for regular workers EPLreg* permanent Employment rate average-0.0670.015 GDP growth rate for 2009-0.1160.023 variance level 20.1390.045 R 2 (from model2) a 76.5% N level 222 N level 117936

15. CONCLUSIONS 1. Differences in employment insecurity between individual workers depend for about 15% on the country they live in. 2. Workers are more insecure in countries with longer-term poorer labour markets and in countries with a stronger recent economic downturn 3. Differences in spending on active or passive labour market policies, as well as differences in EPL, do not impact much on feelings of employment insecurity

16. DISCUSSION 1. It may be that the effect of GDP Growth 2009 is time specific (related to this financial crisis) 2. Policies may have an indirect effect on insecurity, through their effect on employment, on human capital of workers, etc. 3. Policies may have an impact on objective measures of employment security 4. Market forces or policies? Need for longitudinal data