Rapport om beskæftigelse, del II om medlemslandene, til DER 7-9/12 00 (eng)
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Til underretning for Folketingets Europaudvalg vedlægges i forbindelse med det ordinære møde i Det Europæiske Råd i Nice den 7.-9. december 2000 Rådets rapport for 2000 vedrørende beskæftigelse, del II om medlemslandene.
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Coreper/Council (Employment and Social Policy) | |
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11190/00 SOC 285 ECOFIN 231 + ADD 1 | |
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Subject : |
Draft Joint Employment Report 2000 {{SPA}} Part II: the Member States |
Delegations will find attached the draft text of the Joint Employment Report 2000, Part II: the Member States, as it appears following its examination by the Employment Committee and the Economic Policy Committee.
"Part I: the European Union", together with the Executive Summary and the Statistical Annex, is to be found in 12909/00 SOC 402 ECOFIN 311.
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PART II: THE MEMBER STATES 3
BELGIUM 4
DENMARK 12
GERMANY 19
GREECE 27
SPAIN 35
FRANCE 43
IRELAND 50
ITALY 58
LUXEMBOURG 66
NETHERLANDS 72
AUSTRIA 79
PORTUGAL 86
FINLAND 93
SWEDEN 100
UNITED KINGDOM 108
JOINT EMPLOYMENT REPORT 2000
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General appreciation Despite an improvement in the Belgian labour market, its long-standing challenges are only gradually being adjusted: high inflows into long-term unemployment, low labour market participation of older persons, a large gender gap in employment, pronounced regional differences and the job creation potential in the service sector. Policy-mix Belgium is responding to these challenges with a policy mix that acts on labour demand and supply as well as on the redistribution of labour. The policy relies on wage moderation, reduction of social security contributions and 'the active welfare state'. However the evolution of the impact of preventive policies is, as yet, unsatisfactory: Belgium is still confronted with high percentages of monthly inflow into long-term unemployment for young people and adults. Response to the 1999 Council Recommendations Measures have been taken to reduce unemployment traps: through a reduction of workers' social security contributions at the level of minimum wages, the financial incentives for job-search have increased. As regards the labour market participation of older persons, the minimum age for early pensions has not been modified, but a series of measures have been taken to make remaining at work more attractive. However, insufficient attention is paid to restrictive measures that would prevent workers leaving their activity early. The well-developed service sector is undoubtedly the engine of employment in Belgium. Reductions of employers' social security contributions have been decided in order to support job creation in the health sector and social economy. Coordination and coherence of policies of the different authorities have improved, as illustrated by several cooperation agreements. But the proliferation of labour market measures has redu ced their effectiveness and has clouded the perception by the players involved: regardless of the many aspects involved, greater simplification and increased homogeneity is urgently needed, accompanied by a reduction of instruments. Challenges ahead Progress in reducing the rate of inflow into long-term unemployment has been slow. For young people prevention has been recently reinforced, but intensified action for adults is urgently required. The tax burden on labour remains one of the highest in the EU, and has not yet started to fall, despite the efforts undertaken to reduce social security contributions for certain groups. Progressively, unfilled job vacancies become visible in parts of Belgium through the mismatch between labour demand and supply. Increased mobility of the labour force and further upgrading of skills through a comprehensive strategy on life-long learning will have to play a key role in improving the Belgian labour market and to prevent labour shortages. Major training efforts are undoubtedly necessary in the ICT-sector. |
Real GDP growth slowed down in 1999 to 2.3%, but is expected to accelerate again in 2000 (3.6%). Labour market conditions are improving because of (i) higher GDP growth, (ii) the higher labour intensity of economic growth since 1996 and (iii) the trend from passive to more active labour market policies.
In 1999 employment growth slowed down to 1.1%, which is lower than the EU-average. The employment rate increased from 56.3% in 1996 to 58.9% in 1999, which is still 3 percentage points below the EU-average. In the same period the employment rate of women increased by almost 5 percentage points. The gender gap is shrinking and is now under the EU-average. Calculated by age group, the employment rate is particularly low for the lower and higher age brackets, both being more than 12 percentage points below the EU-average. For those older than 55, the employment rate (24.7%) is the lowest in the EU.
The unemployment rate decreased in 1999 to 9.1% and is currently below the EU-average. Youth unemployment increased in 1999, but the unemployment ratio of young women diminished to 7.8 which is below EU-average. Total female unemployment is lower than the EU-average, and the gap with male unemployment is diminishing. A particular problem is long-term unemployment: LTU has diminished 0.6 percentage points between 1998 and 1999 but its share of total unemployment (56%) is among th e highest in the EU.
There are considerable regional disparities (with local variations) in labour market performance: unemployment is especially pronounced in Wallonia and Brussels, while qualitative labour shortages have emerged in parts of Flanders.
The cornerstone of Belgium's employment policy is the reduction of wage costs through wage moderation and reductions of social security contributions (both should arrive at the level of the three main neighbouring countries) in order to diminish the productivity trap and to increase the demand for labour.
The second main element is the redistribution of labour. Given the concern for hourly wage cost increases in the event of generalised reductions of working time, a flexible policy on sectoral and enterprise level has been implemented. Social partners can agree on working time reductions and will be partly compensated for new recruitment by reductions in payroll taxes. The Belgian Labour Minister recently announced a comprehensive package for a reorganisation of working time.
The third building block of the Belgian employment policy is currently called "the active welfare state", referring (among other things) to an increasing emphasis on active labour market policies, with particular attention being devoted to young people. In addition there are special measures to tackle the unemployment traps and to integrate the long-term unemployed on the labour market. The ultimate aim is to increase the supply of labour.
The challenge of this employment strategy is that the authorities have to balance the increased labour demand (by lowering the total wage cost) with an equivalent increase of labour supply (by active labour market policies). An eventual mismatch between labour demand and supply would aggravate the situation of unfilled job vacancies, which are starting to occur in some sectors.
The NAP 2000 is a clear indication of the qualitative improvement of the Belgian NAP since 1998 and gives a good overall view of how the different Belgian authorities define the policy mix in order to implement the European Employment Strategy. Efforts to increase the coherence of the Belgian NAP are strengthened, but the total number of labour market instruments is still very high.
The preventative approach, although reinforced by recent policy announcements, is still not fully implemented and the main focus of the Belgian labour market policy is still on curative policies addressed to the long-term unemployed. As a result, the non-compliance rates for the two first guidelines exceed 50%. Taking into account the high percentages of inflow into long-term unemployment for young people (41%) and for adults (35%), intensified action is urgently required.
On employability Belgium is continuing its efforts towards the preventative approach, especially for young people. For GL 1 the non-compliance rate declined from 57.6% in 1998 to 50.4% in 1999. This is an improvement but there is still a long way to go until every young unemployed person is offered a new start before the 6th month of unemployment. Concerning GL 2 the effort indicator for 1999 is even lower than in 1998. As a result non-compliance is st ill at 54.3%.
In 1999 80.8% of job seekers participated in active measures to reduce unemployment (GL 3), which is 16 percentage points higher than in 1998. Training represents 12% of the beneficiaries of active measures.
With regard to the entrepreneurship pillar the federal and federated authorities implemented initiatives to reduce administrative burdens for businesses, to facilitate the launch and growth phase of enterprises and to train and coach new entrepreneurs. All these initiatives are mainly focusing on SMEs. The creation of jobs in the non-profit sector is encouraged. Since 1 April 1999, and for a period of six years, additional reductions of social contributions are planned, through a lump sum assigned for each worker on the one hand, and an additional reduction for workers with low salaries on the other. A target is set to reduce social security contributions to the average of the main neighbouring countries within 6 years.
Concerning the adaptability pillar several initiatives were implemented, mainly focusing on the reorganisation of working time. Firms that switched to the four-day week, benefit from reductions in their social contributions for the additional staff they have to employ. However no indicators are available to evaluate the impact of this initiative. Training efforts were increased and measures have been taken concerning career breaks, part-time work for the elderly and train ing during working time. A law to encourage participation of staff in company profits was approved. On continuous training the Social Partners committed themselves to increase resources in order to arrive within six years at the average of the three main neighbouring countries. Therefore resources will be increased from 1.2% to 1.4% of the payroll before the end of 2000, with the aim to arrive at 1.9% in 2004.
Equal opportunities through mainstreaming are high on the political agenda, but it can be stated that more concrete actions are awaited. The 1999-2000 inter-professional agreement commits the partners to the review of function classification systems. Positive action is encouraged and equal opportunities for men and women are to be pursued in training.
The role of the Social Partners in the implementation of the NAP 1999 was important. The inter-professional agreement of 1999-2000 is the backbone of the various measures that the Social Partners have committed themselves to undertake for the implementation of the NAP 1999. Social Partners have been consulted during the preparation of the NAP 2000.
During the 2000-2006 period the ESF will support the NAP-strategy through an increased focus on preventive labour market measures, adapted to specific regional circumstances.
The 1999 Council recommendations on the implementation of Belgium's employment policies
(1) Strengthen preventive policies, by taking early action based on individual needs, to stem the flow into long-term unemployment. In particular, Belgium should comply fully with guidelines 1 and 2 and provide young and adult unemployed with effective employability measures before the 6- and 12- month thresholds, respectively;
(2) Examine in more detail disincentives within the tax and benefit system which may discourage labour market participation, particularly of women and older workers. Belgium should, in particular reassess existing policies facilitating early retirement of workers, and consider the policy choices most appropriate to avoid the early withdrawal of workers from the labour market and to promote employment of older persons;
(3) Adopt and implement coherent strategies, encompassing regulatory, fiscal and labour market measures, to exploit more fully the job creation potential of the service sector;
(4) Reinforce the cooperation between the different authorities implementing the national employment action plan.
Concerning the strengthening of preventative policies, the major innovation in the NAP 2000 is the 'starter job for young people' (convention de premier emploi jeunes). According to this programme, both public and private sectors have to increase their staffing level by hiring, from 1 April 2000, young short-term unemployed people. Companies have to offer jobs equivalent to 3% of its workforce to young people within six months after leaving school. In addition, these companies benefit from reductions in employers' social security contributions if recruits have low qualifications. The impact of this new measure will be reinforced, in close collaboration with the regions, by offering integration pathways for young people after 3 months of unemployment. It is expected that 45,000 extra jobs will be created.
The NAP 2000 is weak on new specific measures in response to GL 2: the measures listed in the NAP more often refer to the prevention of early retirement than to the prevention of long-term unemployment.
Concerning disincentives within the tax and benefit system, the reduction of social and fiscal charges is stepped up. Since 1 April 2000, the government further reduced social security contributions. The total reduction of charges in the year 2000 is budgeted at {{X80}} 2.6 billion. Targeted reductions in workers' taxes and social security contributions are intended to diminish the unemployment traps. However the average tax burden on labour has shown an increasing trend, and i of the highest in the EU, which suggests that the measures taken have been insufficiently strong.
As regards the labour market participation of older persons, the minimum age for early pensions has not been modified. Although the age of access to early retirement will not be modified, methods will be developed to reorganise working time in function of age, as it already is the case for the non-profit sector, to encourage older workers to remain working. In addition, recruitment of older
workers will be encouraged by a reduction of employers' social security contributions. However, insufficient attention is paid to restrictive measures that would prevent workers leaving their activity early. Although the gender gap in employment is significantly reduced in Belgium since 1997, further measures are taken to increase the participation of women, mainly through the expansion of the possibilities for childcare. Measures aimed at reducing the tax burden on labour do not inclu de any gender impact analysis.
Various initiatives have been taken to increase employment in the service sector. The Belgian authorities are also encouraging the development of specific employment projects in the social economy through the activation of unemployment benefits and minimum income.
The programmes of the federal, regional and community governments consider reinforced cooperation as very important. Improved cooperation and coherence is already visible in the agreement on the 'starter jobs for young people' and on the increased financing by the federal government of employment programmes of the federated authorities. Last but not least, the ESF-NAP Impact Assessment Cell (ENIAC), set up under the new ESF programme, within which the five Belgian authorities wil l work together, is a clear expression of the will to cooperate.
Concerning the new emphases in the Guidelines for 2000 it is important to underline recent initiatives to decentralise services to the unemployed. 'Lokale Werkwinkels' in Flanders, 'Plateformes locales de l'emploi' in Brussels and 'Maisons de l'emploi' in Wallonia are supposed to reach out more easily to the unemployed, to provide integrated services (the 'one-stop-shop' concept) and/or to promote local services.
However, major initiatives concerning training on ICT (GL 6) are not presented in the NAP 2000.
In the area of employability the commitment of the social partners to gradually increase investments in life-long learning of employees is a big step forward. However, specific attention should be given to equity issues in the access to training. The same remark holds for older workers: their present share in adult education is far below the average. One of the ambitions of the 'Spring programme' is to reduce, within a period of five years, by 50% the number of beneficiaries of minimum subsistence and social assistance, by employment programmes.
Under entrepreneurship various types of initiatives are developed in the social economy to develop job opportunities targeted at different groups of low-qualified, long-term unemployed job seekers. The cooperation agreement for the social economy, concluded between the federal and
regional/community governments, has the ambition of doubling employment in this sector. However partnerships with commercial enterprises, and similar integration measures in the regular labour market should also be developed. A reduced VAT rate of 6% applies to sectors such as house repair particularly affected by undeclared work.
In order to increase adaptability various measures are introduced through commitments of the social partners: flexible working hours, increased possibilities of career breaks, increased part-time employment, reduction of the working week for those over 50, reduced working time over the life cycle.
With respect to equal opportunities various initiatives are presented: improvement of childcare, facilitation of career breaks, the fight against vertical and horizontal segregation.
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Belgium |
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Annual data |
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Employment Indicators |
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1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU | |
|
Total Employment Rate |
58.9 |
57,3 |
57,0 |
56,3 |
62,2 |
59,9 |
|
Males |
67.5 |
67,0 |
67,1 |
66,8 |
71,6 |
69,7 |
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Females |
50,2 |
47,5 |
46,7 |
45,6 |
52,9 |
50,0 |
|
15-24 |
25,5 |
26,0 |
25,2 |
26,1 |
39,0 |
36,2 |
|
25-54 |
76,4 |
74,4 |
74,6 |
73,9 |
75,6 |
73,4 |
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55-64 |
24,7 |
22,5 |
22,0 |
21,8 |
36,9 |
35,9 |
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Full-time eq. Employment rate |
54.5 |
53,5 |
53,4 |
53,0 |
56,8 |
55,0 |
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Males |
68.4 |
66,4 |
66,6 |
66,6 |
69,7 |
68,6 |
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Females |
40.4 |
40,7 |
40,4 |
39,5 |
44,2 |
42,3 |
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Unemployment Indicators |
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1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU | |
|
Total Unemployment Rate |
9,1 |
9,5 |
9,4 |
9,7 |
9,2 |
10,8 |
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Males |
7,8 |
7,8 |
7,4 |
7,6 |
7,9 |
9,6 |
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Females |
10,7 |
11,8 |
12,1 |
12,7 |
10,8 |
12,4 |
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Youth Unemployment Ratio |
8,5 |
7,8 |
7,6 |
7,8 |
8,5 |
10,2 |
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Males |
9,1 |
7,7 |
6,9 |
7,1 |
8,5 |
10,3 |
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Females |
7,8 |
7,8 |
8,3 |
8,6 |
8,5 |
10,1 |
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Long-Term Unemployment Rate |
5,1 |
5,7 |
5,7 |
5,9 |
4,2 |
5,3 |
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Males |
4,4 |
4,5 |
4,4 |
4,5 |
3,5 |
4,5 |
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Females |
5,9 |
7,4 |
7,5 |
8,0 |
5,0 |
6,2 |
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Annual change |
Employment related Economic Indicators |
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1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
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Total Employment Growth |
1,1 |
1,2 |
0,8 |
0,3 |
1,4 |
0,7 |
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Real GDP Growth |
2,3 |
2,7 |
3,5 |
1,0 |
2,4 |
1,6 |
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Labour Productivity Growth |
1,2 |
1,5 |
2,7 |
0,7 |
1,0 |
1,0 |
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Real Unit Labour Costs |
-0,2 |
-0,9 |
-1,2 |
-0,6 |
0,0 |
-0,5 |
General appreciation The labour market situation remains in a strong position, with the highest employment rate in the EU, both for men and women. The unemployment rate remained stable, well below the EU average. The major challenges in 1999 were policies towards promoting labour supply and the upgrading of skills and qualifications of the labour force, which included efforts to encourage employees to stay longer in working life and to reduce the numb er of persons of working age on social benefit. Also the participation of women and men across sectors and occupations could be more balanced.
Policy-mix Denmark is responding to labour market challenges with an even stronger focus on the need to increase the labour force and the necessity to maintain and develop their qualifications. Efforts have been made under all four pillars but particular attention is being paid to employability.
Response to the 1999 Council Recommendations The first recommendation to Denmark aiming at an increase in the supply of labour has been addressed through changes in the tax system and better incentives for remaining in or obtaining work. As the measures are being phased in or recently put into force, it is too early to assess whether they are sufficient to reach the objective. For the second recommendation on promoting training and job opportunities for unemployed women satisfactory results have been achieved so far. Different measures have been taken to tackle gender segregation in the labour market. However, achieving less gender segregation seems to be a long-term project since it depends, among other things, largely upon educational choice and preferences as regards occupational fields.
Challenges ahead In view of the need to increase labour supply the reforms of the tax system, leave schemes and the early retirement schemes should continue to be closely monitored and assessed to determine whether they are sufficient to meet the objective. Also ways of further reducing the number of persons on unemployment benefits and social benefits should be continued.
With an expected demographic development having a negative impact on the labour force together with a high employment rate and a relatively low unemployment rate, policies towards promoting labour supply and upgrading of skills and qualifications of the labour force as a means to overcome emerging bottlenecks should be continued.
1. Economic and employment situation
The Danish economy continued to develop in a balanced way and policies to strengthen employment while controlling consumption have worked successfully so far. The GDP growth rate slowed down in 1999 to 1.7% compared to 2.5% in the previous year. The growth during 1999 can be explained by both an employment growth of 1.1% and a more efficient use of the resources in the economy, with 0.6%.
The employment rate at 76.5% in 1999 remained the highest in the EU and well above the future targets for both women (at 71.6 %) and men (at 81.2 %) set for the EU as a whole in 2010 by the Lisbon European Council. There has been a particularly favourable development in employment for the age group 55-64 year olds. The employment rate improved by 3.8 percentage points from 50.4% in 1998 to 54.2% in 1999, in comparison to the EU-average of 36.9% in 1999.
The total unemployment rate remained stable at 5.2% between 1998 and 1999 but women have in 1999 benefited more than men from the improvement of the labour market and the overall situation on the labour market is of increasing equality. The unemployment rate for women fell from 6.6% in 1998 to 6.0% in 1999 whereas the unemployment rate for men rose from 4.1% in 1998 to 4.5% in 1999 thereby bringing down the gender gap to 1.5 percentage points. The long-term unemployment rate fell from 1 .4% in 1998 to 1.1% in 1999. This fall reflects a decrease in the long-term unemployment rate of women, whereas the long-term unemployment rate of men has not changed since 1998. For the first time in recent years the youth unemployment ratio did not fall but rose from 5.8% in 1998 to 7.2% in 1999.
2. Overall employment strategy
"Denmark 2005", the governmental multi-annual structural and welfare policy programme, forms the basis of the overall economic policy strategy, including the employment strategy. Important objectives of the Danish employment policy up to year 2005 are:
- An increase in the labour force of about 80,000 persons from 1998 to 2005, equalling nearly 3 per cent.
- An unemployment rate at a level of about 5 per cent of the labour force according to national definition and a moderation of development in wages.
- Reduction of the number of persons on transfer income with about 60,000 persons from 1998 to 2005.
- Reduction of the tax burden.
- Reduction of public debt.
The main challenge in the employment strategy lies in obtaining the necessary growth in the labour force. The demographic development as such will lead to a fall in the labour force, the rate of unemployment is low and in the beginning of 2000 collective agreements in some sectors were concluded whereby the number of holidays will be increased.
Denmark intends to continue and further develop the structural policy which involves phasing in the reforms of the labour market, the early retirement scheme and the tax system, strengthening labour market measures and a continued development of the inclusive labour market.
3. Progress assessment
3.1. General appreciation
The NAP 2000 is built on the previous NAPs and it reflects very well the development and the progress made in implementation. The Danish labour market policy is progressing well and has an even stronger focus on the need to increase the labour force and the necessity to maintain and develop the qualifications of the labour force. Results are achieved under all four pillars but especially satisfactory results are shown for the employability pillar.
In addition, monitoring and evaluation are seen to play an increasing role in the on-going policy process. The NAP describes in a coherent way the mix of policy measures at both national and regional level, from legal measures to campaigns aimed at changing attitudes and behaviour. Progress is visible concerning economic and statistical information but improvements can still be made.
3.2. Implementation of the 1999 National Action Plan
On employability, the NAP states that the Community target for prevention of youth unemployment is fully phased in and that the adult unemployment target will be met at the beginning of 2001. The indicators show for 1998 that 90 per cent of the insured young unemployed persons and 96 per cent of the insured adult unemployed persons were out of unemployment before reaching 6 and respectively 12 months of unemployment. On the other hand, for the small number of insured persons (i.e . 10 and 4 per cent respectively) remaining unemployed after 6 respectively 12 months without having been offered an action plan, the indicators for non compliance are 84 per cent and 76 per cent respectively. Evidently this requires additional effort. The NAP states that the situation has changed for young persons from the end of 1999 and for the adults it will change from the beginning of 2001.
The activation rate for insured persons in 1999 (1st {{SPA}} 3rd quarter) was 44 per cent. In general indicators for non-insured persons are not given (about 20 per cent of unemployed persons according to national definition).
Efforts continued in implementing policies to increase the incentives for older persons to stay in the labour market which is also the aim of a new voluntary early retirement scheme for persons aged 60 and over started on 1st July 1999. The initiatives to promote a labour market open to all were strengthened, including principles for a reform of the disability pension scheme, a rise in the number of jobs on special terms and a further reduction of the number of persons on tran sfer income in 1999.
Lifelong learning has high priority and partial targets are set, however the indicators should be further developed. An ICT action plan is nearly fully implemented and ICT has become compulsory in all vocational training programmes.
As regards entrepreneurship, favourable framework conditions for creation of new enterprises remained among the central priorities including reducing administrative burdens, counselling entrepreneurs before business start up and support to innovative business start ups. In relation to the target to utilise the employment potential of the service sector, the use of the "Home service" scheme rose to 14.3 per cent in 1999 from 12 per cent in 1998 of the total number of households.
On adaptability the "MOC" project (Management, Organisation and Competence) supporting adaptability of business to competition conditions in a knowledge-based economy is running as planned. On training, an evaluation of a pool to support planning of training activities has shown that about 50,000 employees have been covered and half of the enterprises state that their project has focused on all employees. New collective agreements in fields regulated by the Danish employer s' Confederation (DA) and the Confederation of Danish Trade Unions (LO) implied that a vast majority of the relevant employees are now covered by a more flexible calculation of average working hours. Also, better access to part time work has been incorporated into these agreements.
As regards equal opportunities, the commitment to integrate the gender mainstreaming approach into all guidelines continued. A proposal for a new equal opportunities act has been tabled, including a proposal to set up a "Knowledge Centre for equal opportunities". One of the tasks of the Centre will be to provide better conditions for monitoring development seen from a gender perspective. Concerning family-friendly policies the degree of coverage for children in day care faciliti es, school clubs and youth clubs (age groups 6 months - 17 years) rose to 55 per cent, an increase of 1 percentage point between 1998 and 1999.
The social partners are strongly involved in the implementation of the employment strategy. They are concerned in the collective bargaining and also through partnership with government and authorities. The labour market reform is an explicit example of the involvement of the social partners by means of partnership.
The ESF assistance for the new programming period 2000-2006 is based on Denmark's economic and employment policy objectives up to year 2005, the European Employment Strategy and Denmark's employment priorities as set out in the NAP 1999 but also the recommendations addressed to Denmark by the Council.
4. New policy initiatives
The 1999 Council recommendations on the implementation of Denmark's employment policies
(1) Pursue reforms of the tax and benefit system so as to reduce the overall fiscal pressure on labour, in particular the tax burden on low incomes, and to increase incentives to take up or remain in jobs. The reform of early retirement and leave schemes should be completed and closely monitored in the light of the need to increase labour supply;
(2) Promote training and job opportunities for unemployed women, and examine, in the context of a gender mainstreaming approach, ways to reduce the current levels of occupational and sectoral segregation in the labour market.
4.1. Initiatives taken in response to recommendations
The first recommendation aiming at an increase in labour supply has been followed. As the measures are being phased in or recently put into force, it is too early to assess whether they are sufficient to reach the objective. Particular attention needs to be paid to the reduction of the overall fiscal pressure on labour.
Changes in the tax system within the so-called "Whitsun package" are being phased in as planned including better incentives for persons to obtain ordinary employment. The total tax burden for 1999 is expected to be 50.8 per cent of GDP while the total tax burden for the years 2000 and 2001 is expected to fall to 50 per cent and 49.7 per cent respectively. In the medium term projections the tax burden is scheduled to be reduced to 47.7 per cent of GDP by year 2005 (national definition). The recent important measures in the field of rules on availability for work, leave schemes and early retirement schemes have strengthened the incentives to take up or remain in job. The reform of the leave schemes has succeeded in decreasing the number of persons on leave with 10,600 or 28 per cent in 1999 whereas the number of persons on early retirement continued to rise. As the reform of the voluntary early retirement scheme was not put into force until July 1999, information for indicating the effect will be available at the earliest in summer 2000.
On the second recommendation, satisfactory results have been achieved on promoting training and job opportunities for unemployed women. Different measures have been taken to tackle the current level of gender segregation in the labour market. Efforts to implement a gender mainstreaming strategy continued along with the work to improve monitoring of gender inequalities. In 1999 women benefited more than men from the improvement of the labour market resulting in a reduction of the unemployment spell to 1.5 percentage points. The activation rate for women continued to be higher with 52 per cent compared to 35 per cent for men. As part of the modernisation of the labour market systems, pilot projects have been initiated in the field of gender neutral job placement. A proposal for a new "Act on equal opportunities for women and men" including the mainstreaming approach has been put before the Danish parliament.
4.2. Other policy initiatives
On employability in order to ensure more effective integration of unemployed persons into the labour market the focus is increasingly on the effects of active labour market measures. A new measure has been introduced, "Work practice", meaning short-term (2-4 weeks) periods of work experience to find out if the person has the required qualifications or needs further training. Lifelong learning will be reinforced through the so-called "VEU reform" and in the ICT field 93 per&n bsp;cent of pupils in the 7th-9th grades have access to computers and 85 per cent have access to the Internet. The focus on the inclusive labour market is underpinned by new measures laid down in the Finance Act for 2000. Moreover in cooperation with the social partners a general action plan has been prepared for improving the integration of ethnic minorities on the labour market.
As regards entrepreneurship, new initiatives include "The Government's industrial strategy.dk.21". Under this plan, it is planned to establish a guarantee scheme to secure loans to small enterprises.
On adaptability in 2000 new collective agreements in the private labour market are concluded for four years. In these agreements aspects in the employment guidelines were negotiated such as work organisation, part-time work, life-long learning and the terms for employment of persons with reduced working capacity.
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Performance Indicators |
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Denmark |
||||||
|
Annual data |
||||||
|
Employment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Rate |
76,5 |
75,3 |
75,4 |
74,0 |
62,2 |
59,9 |
|
Males |
81,2 |
80,2 |
81,3 |
80,5 |
71,6 |
69,7 |
|
Females |
71,6 |
70,3 |
69,4 |
67,4 |
52,9 |
50,0 |
|
15-24 |
66,0 |
66,4 |
68,2 |
66,0 |
39,0 |
36,2 |
|
25-54 |
84,4 |
83,4 |
82,8 |
82,2 |
75,6 |
73,4 |
|
55-64 |
54,2 |
50,4 |
51,4 |
47,5 |
36,9 |
35,9 |
|
Full-time eq. Employment rate |
68,6 |
66,9 |
67,0 |
66,1 |
56,8 |
55,0 |
|
Males |
76,2 |
74,9 |
75,2 |
75,1 |
69,7 |
68,6 |
|
Females |
61,4 |
59,3 |
59,2 |
57,6 |
44,2 |
42,3 |
|
Unemployment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | |
|
Total Unemployment Rate |
5,2 |
5,2 |
5,6 |
6,8 |
9,2 |
10,8 |
|
Males |
4,5 |
4,1 |
4,6 |
5,5 |
7,9 |
9,6 |
|
Females |
6,0 |
6,6 |
6,8 |
8,3 |
10,8 |
12,4 |
|
Youth Unemployment Ratio |
7,2 |
5,8 |
6,2 |
7,6 |
8,5 |
10,2 |
|
Males |
7,0 |
5,3 |
5,4 |
6,5 |
8,5 |
10,3 |
|
Females |
7,3 |
6,2 |
7,2 |
8,8 |
8,5 |
10,1 |
|
Long-Term Unemployment Rate |
1,1 |
1,3 |
1,5 |
1,8 |
4,2 |
5,3 |
|
Males |
0,9 |
0,9 |
1,2 |
1,5 |
3,5 |
4,5 |
|
Females |
1,2 |
1,8 |
1,9 |
2,1 |
5,0 |
6,2 |
|
Annual change |
Employment related Economic Indicators |
|||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Growth |
1,1 |
2,0 |
1,0 |
0,7 |
1,4 |
0,7 |
|
Real GDP Growth |
1,7 |
2,5 |
3,1 |
2,5 |
2,4 |
1,6 |
|
Labour Productivity Growth |
0,6 |
0,5 |
2,1 |
1,9 |
1,0 |
1,0 |
|
Real Unit Labour Costs |
0,6 |
0,6 |
-0,3 |
-0,3 |
0,0 |
-0,5 |
General appreciation: While there has been some reduction in the unemployment rate, economic growth was not strong enough to improve job creation and employment growth remained the lowest in the EU. The stock of adult long-term unemployment, particularly for older workers, remained relatively high. There was no increase in the participation rate of older workers. The lack of job creation in the East German Länder continues to be very worrying.
Policy mix: The policy mix between the four pillars is more balanced than in previous NAPs. Notably actions under the employability and entrepreneurship pillar have been strengthened.
Response to Recommendations: Preventive actions to fight long-term unemployment have been increased by broadening the integration pathway approach. Close monitoring is required for ensuring that such efforts are sufficient for fully complying with guidelines 1 and 2 by 2002 and for reaching the targets set nationally in terms of inflows into LTU.
Initiatives to create jobs in services, notably in the field of ICTs, and specific programmes for SMEs are being reinforced and show encouraging results. Setting up new businesses is promoted in a variety of ways. However, in order to achieve the strategic goals of the Lisbon European Council the potential for job growth in service activities should continue to be increased.
While the adoption of the tax reform 2000 and the enterprise tax reform is a major step, by reducing certain disincentives in the tax system to take up work and offer jobs, more action should be undertaken to continue this process. Little has been done to modernise benefit systems, although for older workers the retirement age was raised.
The overall tax burden on labour has risen recently and is still one of the highest in the EU. The tax reform 2000 is expected to start reversing this trend. Model projects to create jobs for low-paid workers are being initiated. These policies need to be monitored closely with regard to their effective implementation and job creation impact.
Common policy indicators have been provided, but need to be further refined. The possibility of a quarterly Labour Force Survey is being considered and test surveys are envisaged.
Challenges ahead: Important employment problems continue to persist in parallel with certain skill gaps, notably in ICT activities. Training actions need to be further stepped up and modernised, namely in the context of the results of the Josb Alliance process. The development of a strategy for lifelong learning, including the setting of quantitative targets, may help to underpin these efforts. A critical re-assessment of labour market policy in East Germany is needed to promote st ronger employment growth. In the field of gender equality the data show that Germany faces a gender pay gap, notably in the private sector, and that equal opportunities authorities and other relevant actors should pay attention to narrowing this gap.
1. Economic and employment situation
Real GDP growth slowed down from 2.2% in 1998 to 1.5% in 1999. Real unit labour costs continue to decline although to a lesser degree than in 1998. The number of employed persons increased, as in 1998, by an average of 0.3%, and the employment rate increased by about one percentage point, more for women than men. The low employment growth is partly due to the unification process. Employment rates for older workers remained stable. The rate of unemployment went down slightly in 1999, and joblessness among women continued to be higher than among men, although the difference narrowed somewhat. The youth unemployment ratio went down in 1999 as did the long-term unemployment rate, in both cases by more for women than for men. Germany continued to display a dual labour market. In the new Länder overall registered unemployment remained roughly twice as high as in the Western part of the country. Women continued to be especially hard hit by the serious situation in Eastern Germany. < /P>
2. Overall employment strategy and its main objectives
To reduce unemployment and create favourable conditions for better job growth the government has initiated major fiscal reforms and started a programme to consolidate public finances. More generally the economic and social policy agenda undertakes to link employment, education, training, research and innovation policies, in order to raise, in particular, investment in R&D and human resources, to increase capital investment and to provide for the necessary infrastructure. Attention i s given to opening over-regulated markets, fostering the diffusion of information and communication technologies as well as to support programmes for start-ups and SMEs. The main issues for labour market policies lie in prioritising active measures over passive income replacement payments and strengthening the preventive approach. Efforts to modernise the dual system and increase continuing training have been stepped up. Policies agreed by the social partners in the Jobs Alliance at the macro-economic le vel aim at employment-oriented collective bargaining and improved working conditions and pay in accordance with the gains created by productivity increases. In the area of equal opportunities improvements were launched in the framework of the programme "Women and Work".
3. Progress assessment
3.1. General appreciation
In 1999 the strengthening of ALMP and its preventive thrust has been continued. Newly developed indicators have been developed for monitoring compliance with guidelines 1 and 2. However, further efforts are needed both to combat the high stock of the adult long-term unemployed and increase the input into continuing training. Activities supported by specific programmes, notably with regard to SMEs and ICTs, are showing first positive results. The involvement of the social partners in t he field of adaptability has been increased, though further action is needed. The issue of gender mainstreaming is being actively supported.
The German authorities and social partners have made efforts to comply with the EES. Certain inroads have been made in the field of increasing employability. The overall tax burden on labour has, however, increased. This situation requires forceful implementation of the fiscal relief measures of 1999 and the tax reform of 2000 with a view to reducing the overall tax burden in the coming years.
3.2. Implementation of the 1999 NAP
Employability: In general ALMP tools have been oriented more towards prevention and an integrated pathway approach. These efforts should be fully in place within the next two years.
All the efforts described in earlier NAPs concerning the fight against youth unemployment are continuing, including the Immediate Action Programme. The German efforts traditionally focus on a broad approach towards prevention by way of the dual training system which covers about 2/3 of the relevant age groups. The policy input and output indicators show that 74.4% of those who became unemployed in the course of 1998 started a measure within a concrete action plan before six months of unemployment. About 16% of those remaining jobless beyond six months have not started an active policy measure (rate of non-compliance). Active measures were undertaken in the framework of the Immediate Action Programme to combat youth unemployment and to offer training places to young people, in addition to regular ALPM measures. With regard to long-term unemployment among adults, efforts have generally been stepped up through the expansion of the individual pathway approach. In order to intervene earlier, certain thresholds for eligibility have been more strongly implemented. The indicators show that 77% of all who entered unemployment in 1998 have started a measure within a concrete action plan before 12 months. 21% of those who remained unemployed after 12 months had not started a measure within an individual action plan. These figures suggest a trend towards the implementation of this guideline in the near future.
Concerning guideline 3, in 1999 about 1.5 m persons (45.2% women) participated on average in active measures at federal level, 240 000 more than in 1998. At Länder level, it is estimated that, as in 1998, 385 000 persons were supported. Of the registered unemployed, 45.8% were in active measures, against 37.2% the previous year. In addition the communes continued to bring social assistance recipients into work.
Efforts to improve the participation rate of older workers have been intensified. Retirement age is being raised and pensions paid before the statutory retirement age are being reduced. However, flexible exit procedures remain important action parameters, as agreed in the Jobs Alliance process and in collective agreements.
Entrepreneurship: The number of self-employed is generally on the increase. About 100 000 persons received the bridging allowance for unemployed to start up their business. Access to finance is traditionally a priority: the successful new "Stargeld" programme promotes small-scale start-ups. About 30% of the beneficiaries are women. Through a specific programme (BTU-programme) the federal government made available in 1999 nearly 0.8b{{X80}} for venture capital for small logy companies. Coaching, risk capital and training programmes for SMEs have been increased. Measures to close the estimated gap of some 75 000 skilled persons in ICT activities continue to be stepped up. The overall tax burden of the German economy and the effective tax rate on employed labour have been high and rising up to 1999. However, the various steps in the tax relief acts, which started in 1999, the impact of the eco-tax and the upcoming reduction of the corporate tax rate are expected to creat e more employment opportunities in the near future.
Adaptability: Action has been taken to improve partial retirement provisions for older workers, especially in SMEs, and possibilities for persons working part-time. In the Jobs Alliance concertation discussions the social partners committed themselves to modernise the organisation of work, to increase part-time work and make more use of "working-time accounts". In many collective agreements the issue of initial and continuing vocational training has been prioritised.
Equal Opportunities: The "women and jobs" programme, announced in the last NAP, has been put into action through a variety of measures, e.g. by increasing the share of women in ICT training and computer science studies, as well as in leading positions. The Federal Employment Agency continues to pursue a double-handed approach concerning gender mainstreaming and specific measures for equal opportunities. Efforts to increase childcare facilities, notably in West Germany, are bein g undertaken. The high gender pay gap identified in the ECHP needs to be narrowed. Provisions in the tax and benefit system which may form a disincentive for an increased female participation on the labour market should receive strong attention in the government report on the employment and income position of women foreseen for 2001.
Social Partners: The Social Partners have drawn up the text on guideline 15 in the NAP. The Jobs Alliance process, in which the federal government and the social partners participate through regular top-level concertation meetings, has resulted in a number of joint statements, which notably concern employment-friendly working-time policies and the use of partial retirement for older workers. Of particular importance are policies in respect of maintaining and creating initial and continuing training facilities. In a number of important industries these intentions are underpinned by way of stability- and employment-oriented collective agreements over the medium term. These collective agreements make an essential contribution to good overall economic conditions. The Jobs Alliance concertation has also been extended and deepened by similar employment and training alliances at Länder level.
ESF and the Structural Funds: On average, over the years 1994-98, some 250 000 people per year were supported by the ESF. The ESF contributes 3% to the Federal and 36% to the Länder ALMP measures. In 1994-99 some 7.4 b{{X80}} were available through the ESF; in 2000-2006 this amount will rise to 11.5b{{X80}}. While supporting the guidelines as a whole, particularly the preventive approach, 10% of the ESF allocation will be earmarked for specific measures for women. ERDF an ncing in German Objective 1 areas (9.91 b{{X80}} between 1994-99) has contributed to maintaining and creating about 480 000 jobs. In the 2000-2006 period the ERDF and EAGGF resources in Objective 1 areas will rise to 14.75b{{X80}}.
4. New policy initiatives
The 1999 Council recommendations on the implementation of Germany's employment policies.
(1) Strengthen preventive policies, by taking early action based on individual needs to prevent people from becoming long-term unemployed. Germany should increase the level of ambition of the present targets, to bring down the inflow into long-term unemployment to the levels reached by the best performing Member States (less than 10% after 12 months);
(2) Adopt and implement a coherent strategy to exploit the employment potential of the services sector, encompassing regulatory, fiscal and other measures to reduce the burden for setting up new undertakings;
(3) Examine in more detail disincentives within the tax and benefit system which may discourage labour market participation of all groups, especially of older workers. Germany should in particular reassess existing policies facilitating early retirement and consider the policy choices most appropriate to avoid the early withdrawal of workers from the labour market and to promote employment of older workers;
(4) Pursue and monitor efforts to bring down gradually the fiscal pressure on labour, by reducing taxes and social secuirty contributions. In particular, labour costs should be reduced further at the lowest end of the wage scale, while respecting the need for fiscal consolidation;
(5) Take appropriate measures to improve and adapt its statistical system so as to provide data compatible with the common policy indicators by 2000. Germany should consider introducing a quarterly Labour Force Survey in the light of the EC Council Regulation 577/98.
4.1. Initiatives taken in response to recommendations
In order to strengthen preventive policies, initiatives taken are expected to result in a full implementation of guidelines 1 and 2 by 2002 at the latest. The target for the inflows into long-term unemployment for both young people and all groups of unemployed is to reduce this share to under 10% (from respectively 15% and 17% in 1999) over the same period. As long-term unemployment, though decreasing, is still high, the implementation of the policies put in place in this context will need close monitoring as to their real impact on labour market performance.
The development of a coherent strategy to exploit the employment potential of the services sector is reflected in a panoply of measures under the entrepreneurship pillar and initiating and upgrading a set of programmes, notably for SMEs. While an increase of employment in services has recently been registered the impact of all these policies will only be felt gradually over time.
As to the examination of disincentives which may discourage the labour market participation of all groups, especially of older workers, actions have been initiated by the gradual reduction of the overall fiscal and social security burden. Although demographic changes point to a reduction of the labour supply and a natural easing of the unemployment problem more positive action should be envisaged to increase the participation of older workers.
Despite certain income and corporate tax reliefs in 1999 and the introduction of the 'eco-tax', the effective tax rate on employed labour rose until 1999 and remained at a high level. The tax reform 2000 will further reduce personal income tax rates over the whole income tax range, raise basic and family allowances and lower the tax rate on corporate profits from 40% to 25% in 2001. Together with the continued reduction of the social security contributions for retirement pensions and increasing compensatory taxes on energy consumption (the "eco-tax") both the overall tax burden on labour and the effective tax rate on employed labour are foreseen to decrease and it is expected to gradually create more employment opportunities. Some model projects are being launched in the summer of 2000 to improve incentives for labour market participation. They focus on giving more effective incentives to employers to offer, and workers to take up, jobs at the lower end of the wage scale. All these policies need to be monitored closely with regard to their effective implementation and job creation impact.
The policy indicators concerning guidelines 1 and 2 have been provided on the basis of a combination of a statistical survey in representative labour market regions and register labour market flow data Gender disaggregation is, however, missing, but is foreseen for 2001. The indicators for guideline 2 do not yet completely focus on adult unemployed only, but comprise all age groups. The whole system should therefore be put on a firmer base. The question of whether a labour force survey could be carried out on a sub-yearly basis is being examined and test surveys will probably be conducted in the autumn of 2000.
4.2. Other initiatives
Employability: It is expected that in 2000 about 1.6 m persons will be supported by Federal ALMP programmes. Towards the end of 2000 the number of apprenticeship places in connection with the measures taken with regard to the ICT, will be raised to 40 000. Lifelong learning is to be increased, notably in ICT activities for the employed and unemployed. Companies have committed themselves to verifiably increase in-firm training for internet-rel evant technologies. By the end of 2001 all educational establishments will be equipped with multi media PCs and internet access. It is anticipated that the share of first year students in computer sciences will increase to 40% by 2005. A bill has been adopted to bring about 50 000 severely disabled persons back into the labour market in the coming 2 to 3 years.
Entrepreneurship:The Government has announced the establishment of an action plan, to be implemented by the end of 2001, for the reduction of bureaucratic obstacles to start-ups and SMEs. The efforts to both increase innnovation and promote the use of ICTs in SMEs will continue. It is expected that the gradual implementation of the tax reform 2000 as well as the envisaged reduction of the share of social security contributions in gross pay from the present 42% to 40% in the medi um term will further improve the business climate. The initiated model projects for workers at the lower end of the wage scale and for long-term unemployed are also expected to show the first postive results.
Equal Opportunities: The share of women in future-oriented jobs is targeted to increase to 40% in 2005. Legal educational leave provisions will be revised in 2001 with a view to more flexibility and a better use of part-time work opportunities. An overall report on the employment and income position of women will be submitted towards the end of 2001. Further new legal instruments for equal opportunities are being launched.
|
|
Performance Indicators |
||||||
|
Germany |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
64,8 |
63,7 |
63,6 |
64,1 |
62,2 |
59,9 | |
|
Males |
72,4 |
71,7 |
71,8 |
72,7 |
71,6 |
69,7 | |
|
Females |
57,1 |
55,6 |
55,2 |
55,4 |
52,9 |
50,0 | |
|
15-24 |
46,2 |
45,1 |
44,4 |
45,5 |
39,0 |
36,2 | |
|
25-54 |
78,3 |
76,9 |
76,6 |
76,7 |
75,6 |
73,4 | |
|
55-64 |
37,8 |
37,7 |
38,2 |
37,9 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
58,0 |
57,3 |
57,6 |
58,5 |
56,8 |
55,0 | |
|
Males |
70,4 |
69,9 |
70,2 |
71,3 |
69,7 |
68,6 | |
|
Females |
45,6 |
44,8 |
45,0 |
45,7 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
8,8 |
9,4 |
10 |
8,9 |
9,2 |
10,8 | |
|
Males |
8,3 |
8,9 |
9,3 |
8,2 |
7,9 |
9,6 | |
|
Females |
9,3 |
10,2 |
10,8 |
9,8 |
10,9 |
12,4 | |
|
Youth Unemployment Ratio |
4,7 |
5,2 |
5,7 |
5,3 |
8,5 |
10,2 | |
|
Males |
5,4 |
6,0 |
6,6 |
6,0 |
8,5 |
10,3 | |
|
Females |
4,0 |
4,4 |
4,7 |
4,6 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
4,5 |
5,1 |
5,1 |
4,4 |
4,2 |
5,3 | |
|
Males |
4,1 |
4,6 |
4,5 |
3,8 |
3,5 |
4,5 | |
|
Females |
4,9 |
5,8 |
5,8 |
5,2 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
0,3 |
0,4 |
-0,8 |
-0,8 |
1,4 |
0,7 | |
|
Real GDP Growth |
1,5 |
2,2 |
1,5 |
0,8 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
1,2 |
1,8 |
2,3 |
1,5 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
-0,3 |
-1,4 |
-1,6 |
-0,4 |
0,0 |
-0,5 | |
General appreciation: In 1999 the Greek economy grew by 3,5%, faster than the EU average for a fourth consecutive year. By the end of 1999 Greece met all convergence criteria for joining the Economic and Monetary Union. Though total employment growth rate for the period 1994-1999 at one percent per annum is higher than the European Union average, unemployment is now well above the EU average reflecting structural deficiencies of the labour market. Yo uth, female and long-term unemployment rates remain significantly higher than the corresponding EU averages. The gender gaps in employment and unemployment rates are among the highest in the EU.
Policy mix: The new policies being announced go in the right direction but their implementation needs to be accelerated. More emphasis should be put on prevention. Efforts have to be more consistently applied if concrete results are to appear in time.
Response to Recommendations: Despite some progress, the reform of the Public Employment Services has been delayed and it will have to be tackled as a matter of urgency. Greece is making efforts but has not met yet the prevention and activation targets of the EES. The existing statistical monitoring system is still inadequate and data on prevention and activation is not available.
A number of actions were introduced aimed to promote gender mainstreaming and to increase female participation in the labour market, but more concerted action is necessary if the female employment rate is to move nearer the EU average.
A number of measures aimed to improve the quality of education and training were adopted or implemented but the effort should continue. The social partners have been consulted more systematically, but there is still considerable room for a more active participation, in particular with regard to modernisation of work organisation and flexibility in the labour market.
In spite of the introduction of several new measures aiming to stimulate entrepreneurship, further action is needed towards reducing the administrative burden for setting up new undertakings and exploiting the job potential of the services sector.
Challenges ahead: Structural deficiencies in the labour market persist. Therefore, Greece needs to continue and intensify efforts to reform the Public Employment Services and implement preventative and activating policies according to guidelines 1, 2 and 3; further encourage labour market participation, in particular of women, and promote gender mainstreaming; further improve the quality of education and vocational training and develop a comprehensive lifelong learning strategy; further stimulate entrepreneurship, facilitate business start-ups and promote the job creation potential of the services sector; encourage a more active participation of the social partners, in particular for the modernisation of work organisation and take further measures to upgrade the statistical monitoring system.
1. Economic and employment situation
By the end of 1999 Greece met all convergence criteria for economic and monetary union. Macroeconomic performance has improved considerably in recent years. Real output growth remained for a fourth consecutive year above the EU average.
Stimulated by the increased activity, labour supply has increased substantially in the last few years and so has employment but at a lower pace. Following an increase by 3,4% in 1998, employment in 1999 declined by 0,7%, whereas employment in the European Union increased by 1.4%. In 1999 the employment rate declined slightly to 55,4%, substantially lower than the EU average of 61%. The difference in employment rates between Greece and the EU average is exclusively due to differences in female employment rates, as male employment rates are almost identical.
In 1999 the unemployment rate increased to 11,7%, which is higher than the 1999 EU average. The rise in unemployment is attributed mainly to the increase in the labour force - due to increased female participation and immigrant workers - and the decline of employment in agriculture. The female unemployment rate was over twice as high as that for men and substantially higher than the EU average. The youth unemployment rate was higher than the EU average and above the national unemployme nt rate. The long-term unemployment rate rose to 6,9%, above the EU average. The female long-term unemployment ratio is much higher than that for men.
Labour productivity rose by 4,1% in 1999, a substantial improvement in comparison with the 0,3% fall recorded in 1998, and much above the EU average of 0,9%. Partly as a result of increases in labour productivity, real unit labour costs fell by 1,4% in 1999, thereby reversing the upward movement experienced in 1997 and 1998.
2. Overall employment strategy
Growth promotion, unemployment prevention and support for vulnerable groups are the main objectives of the new Greek government. Structural reforms combined with flexibility and adaptation policies in the labour market should strengthen competitiveness and contribute to sustainable growth within a framework of social cohesion. Combating regional inequality in unemployment is also a priority for Greece. The new government is committed to continue its efforts to pass from passive to acti ve employment policies and apply the individualised approach, in parallel with the modernisation and restructuring of public employment services.
It is also striving to promote a knowledge society, with the goal of preparing a work force able to keep up with developments in Greek and international labour markets. Equal opportunities for vulnerable groups and gender equality are being pursued both in mainstream and through specific measures. In 2000 Greece aims to create 75.000 new jobs and 75.000 new training posts. It also intends to extend the accreditation regulations for trainers, to make efforts to better use employment pos sibilities in new areas such as new technologies and to intervene on the labour market if necessary (e.g. working time arrangements) with a view to increasing the number of jobs available. The Greek government is striving to achieve the greatest possible social consensus by strengthening the role of social partners in planning and implementing policies and encouraging them to take positive initiatives. The significance of restructuring the social security system with a view to ensuring social solidarity is emphasised. Greece will strengthen and implement its employment strategy and policies in the period 2000-2006 by more efficient use of ESF credits and the Structural Funds more generally.
3. Progress assessment
3.1. General appreciation
The NAP 2000 is the continuation of the previous plan. Despite progress, a more strategic vision and a better balance of policies among pillars are necessary. Employability continues to be the most important pillar. Some new measures have been introduced. The absence of appropriate statistical data, including the flows into and out of unemployment, makes the assessment of policies and measures difficult. The delay in Public Employment Services reform is hampering the implementation o f other actions in the NAP. Despite some efforts, Greece has not yet adopted the preventative, activating and individualised approaches and has not met the targets of the EES. A comprehensive lifelong learning strategy has to be developed and targets to be set. A number of new measures have been introduced with the aim of supporting SMEs and facilitating their access to the capital market. Some new measures promoting equal opportunities between women and men provide a first response to dealing with the gender gap.
3.2. Implementation of the 1999 National Action Plan
Employability: Despite some efforts to accelerate the reform of Public Employment Services, action remains well behind schedule. 24 new Employment Promotion Centres are now in operation, estimated to double by the end of 2000. The programmes "Young people into Active Life" and "Back to Work" remain the main actions for preventing youth and long-term unemployment. Although no detailed evaluation of the programmes has been undertaken so far, the number of participants under the "Back to Work" scheme exceeded the target set in 1999 and 60% of the new employment posts were retained after the end of the programmes. No explicit information exists on
meeting the 20% activation target. A comprehensive strategy for lifelong learning has to be developed and targets to be set. The Employment and Vocational Training Fund, with the active participation of the social partners, enhanced its activities, financing a number of new initiatives. The establishment of new Vocational Orientation Centres and the operation of a Special Centre for Continuous Vocational Training have been planned.
Entrepreneurship: Measures for reducing overhead costs and administrative burdens for business have been implemented albeit to a scale lower than expected. The modernisation of the tax system was accelerated in 1999. If this effort continues in 2000, it is estimated that it will have an overall positive impact, especially on self-employment. The reduction in non-wage labour costs {{SPA}} which was one of the most important initiatives under this pillar in 1999 - was legislated for ember 1999 and implementation started at the beginning of 2000. The implementation of measures under the Territorial Employment Pacts started after long delay in September 1999. Although not ambitious, this is an encouraging development for improving job opportunities at the local level. Some specific cultural employment programmes aimed at promoting the employment potential of the services sector have been implemented, but similar initiatives in other sectors identified as priority areas in 1999 (e .g. new technologies, environment) have not followed.
Adaptability: 1998 legislation - which provides for more flexible forms of work - is the main statutory measure addressing directly the objective of this pillar. Some progress has been made in its implementation, especially with regard to setting up private employment agencies, part-time work and the pilot application of flexible forms of work in the banking and telecommunications sectors. Part-time work has been extended to the public sector. A consultation with the social partner s is planned for this year with a view to further promoting flexible working arrangements. The Greek government believes that the privatisation programme is likely to have an indirect positive impact on adaptability and flexible working arrangements. New skills have been experimentally explored. Various in-house training schemes have been implemented but to a lower scale than envisaged in 1999. The social partners continued to play a major role in this area, but there is still room for improvement.
Equal opportunities: Steps have been taken to improve gender mainstreaming. Priority is to be given to ensuring that women participate in all active labour market policies proportionally to their share in unemployment. The programmes "Support Structures for Female Entrepreneurship" and "Strengthening Female Entrepreneurship" have been implemented, although only a small part of the 1999 budget of the latter was spent. The establishment of childcare centres for 7.500 children has alm ost been completed, and 191 Social Welfare Centres for the care of the elderly were created. The demand for such services is planned to be fully satisfied during the Structural Fund implementation period 2000-2006.
Social partners: Efforts have been made to upgrade the role of the social partners, though there is still room for improvement. The activities of the Employment and Vocational Training Fund {{SPA}} co-financed by the social partners {{SPA}} in training actions in small enterprises were enhanced. A National Agency for Vocational Training was established with the joint participation of the Ministries of Labour and Education, as well as the social partners. The tripartite couns ttees in the Organisation for Vocational Education and Training are worth mentioning.
ESF and Structural Funds: A very considerable proportion of the active labour market policies implemented {{SPA}} mainly under the employability, adaptability and equal opportunities pillars {{SPA}} was co-funded by the Structural Funds, in particular the ESF. Care has been taken that the CSF 2000-2006 and the relevant operational programmes are focused on the objectives and priorities of the EES as implemented through the Greek NAP. The development of a complete and reliable ncerning targets and evaluation indicators would reinforce the positive role of the ESF.
4. New policy initiatives
The 1999 Council recommendations on the implementation of Greece's employment policies
(1) Take decisive, coherent and measurable action to prevent young and adult unemployed people from drifting into long-term unemployment. In particular, strengthened efforts should be made to complete the reform of employment services, to implement preventive policies in compliance with guidelines 1 and 2.
(2) Examine in more detail disincentives within the tax and benefit system which may discourage labour market participation, in particular of women, so as to increase progressively the female employment rate towards the EU average of 50%, and reinforce gender mainstreaming by building on progress already made in respect of entrepreneurship.
(3) Pursue efforts to further improve the quality of education and vocational training, and to strengthen support for continuous training, in particular by involving social partners more actively.
(4) Adopt and implement coherent strategies, encompassing regulatory, fiscal and other measures, designed to reduce the administrative burden for setting up a new company, in order to stimulate entrepreneurship and exploit the job creation potential of the service sector.
(5) Encourage a partnership approach and promote concrete commitments by the social partners at all appropriate levels on the modernisation of work organisation, with the aim of making undertakings more productive and competitive while achieving the required balance between flexibility and security.
(6) Take appropriate measures to upgrade the statistical monitoring system, so that policy indicators on prevention and activation will be provided by 2000, with the agreed definitions and methods.
4.1. Initiatives taken in response to recommendations
Greece has not taken any particular additional action or initiative additional to the existing to prevent young and adult unemployed people from drifting into long-term unemployment. Nevertheless, the completion of the restructuring of OAED (Public Employment Service) is foreseen for the end of 2001.
The NAP 2000 provides no information regarding disincentives to women's labour market participation within the tax and benefit system. Some care facilities for children and the elderly are being provided. Although several measures have been gender mainstreamed and some steps have been made towards increasing the female employment rate, a comprehensive strategy has to be developed and further steps are necessary to address the problem. Considerable sums will be allo cated for the promotion of female participation in the next programming period of the Structural Funds.
Greece continued the implementation of the 1998 educational reform, one of the main objectives of which is the improvement of quality of education and training. Evaluation of the steps undertaken and social partners' involvement should be built into the reform efforts. Action has been taken for the improvement of continuous training, in particular through accreditation. Measures like the "Second Chance Schools" and the "Adult General Education" have not yet reached their targets.
The continuing modernisation of the tax system is creating a positive environment for entrepreneurship. However, no new measure directly targeted at the reduction of the administrative burden for setting up new undertakings is reported in the NAP. Measures, designed to facilitate business access to capital, have been either taken or are under consideration. Although they indicate a more coherent approach, the existence of more than one decision-making body is obstructing coordin ation in certain cases, such as SMEs. An important planned statutory measure is the creation of the New Stock Exchange for dynamic SMEs. Several actions included in the NAP 2000 are expected to improve the employment potential of the services sector. The creation of a fund to support investments in new technologies is currently under study and is expected to facilitate initiatives in the services sector. The preparation of a legislative framework for the operation of electronic commerce is encouraging.
The social partners are involved in the planning and implementation of various policies and measures of the NAP. Although efforts are being made to progressively upgrade their role no specific information is provided on their active involvement or any commitments for the modernisation of work organisation. In this area the legal framework is defined by 1998 legislation on industrial relations, which has started to be implemented. The balance between flexibility and security in w ork is a major concern of the Greek government.
Some steps have been taken for the improvement of the NAP monitoring system. The reform and computerisation of the public employment services have not advanced sufficiently to allow for the calculation of the policy indicators for prevention and activation. The lack of statistical data and indicators is a weakness of the Greek NAP.
4.2. Other policy initiatives
Employability: Several new measures have been introduced, targeted at the improvement of education and the integration of more vulnerable groups in the labour market. They seem an encouraging, but not sufficient effort towards a better quality of education and vocational training. Greece will strive to comply with the Lisbon conclusions on information society by means of an ambitious programme, co-funded by the Structural Funds in the 2000-2006 period.
Entrepreneurship: In a favourable macroeconomic environment, the imminent liberalisation of the telecommunications and energy sectors and the planned privatisation programme, are expected to contribute to the further enhancement of entrepreneurship. The improvement of the budgetary position has allowed the introduction of some fiscal measures such as tax rate reductions and tax incentives for the creation of Venture Capital Companies. Moreover, the decline in interest rates is r educing the cost of capital. Both developments are likely to promote investment and, hence, employment, although the latter may also encourage the adoption of less labour intensive technologies.
Adaptability: Pilot schemes concerning flexible forms of work organisation have been implemented in the telecommunications and banking sectors. Their evaluation, which is underway, will constitute a basis for the introduction of further flexibility in the labour market.
Equal Opportunities: The establishment of a special inter-ministerial committee to coordinate the work on promoting equal opportunities among all policies could be a first step to more concrete initiatives. New actions and sufficient credits have been earmarked to promote gender in the new Structural Funds programmes.
|
Performance Indicators |
|||||||
|
Greece |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
55,4 |
55,6 |
54,8 |
54,9 |
62,2 |
59,9 | |
|
Males |
70,9 |
71,6 |
71,9 |
72,6 |
71,6 |
69,7 | |
|
Females |
40,7 |
40,3 |
39,1 |
38,5 |
52,9 |
50,0 | |
|
15-24 |
26,8 |
28,0 |
24,5 |
25,4 |
39,0 |
36,2 | |
|
25-54 |
69,9 |
69,7 |
69,7 |
69,5 |
75,6 |
73,4 | |
|
55-64 |
38,4 |
39,0 |
40,7 |
40,7 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
54,1 |
53,7 |
53,8 |
56,8 |
55,0 | ||
|
Males |
70,6 |
71,1 |
71,9 |
69,7 |
68,6 | ||
|
Females |
38,3 |
37,6 |
37,2 |
44,2 |
42,3 | ||
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
11.7 |
10,7 |
9,6 |
9,6 |
9,2 |
10,8 | |
|
Males |
7.5 |
7,0 |
6,2 |
6,1 |
7,9 |
9,6 | |
|
Females |
17.8 |
16,5 |
14,9 |
15,2 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
12.5 |
12,9 |
11,5 |
11,4 |
8,5 |
10,2 | |
|
Males |
9.5 |
10 |
9,0 |
8,6 |
8,5 |
10,3 | |
|
Females |
15.3 |
15,8 |
13,7 |
13,8 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
6.9 |
5,9 |
5,3 |
5,4 |
4,2 |
5,3 | |
|
Males |
4.0 |
3,1 |
2,8 |
2,8 |
3,5 |
4,5 | |
|
Females |
11.1 |
10,1 |
9,2 |
9,6 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
-0,7 |
3,4 |
-0,3 |
-0,4 |
1,4 |
0,7 | |
|
Real GDP Growth |
3,4 |
3,7 |
3,4 |
2,4 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
4,1 |
0,3 |
3,8 |
2,8 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
-1,4 |
0,6 |
1,6 |
-1,4 |
0,0 |
-0,5 | |
General appreciation In 1999, Spain has continued experiencing a very positive trend of economic and employment growth with a marked improvement in unemployment figures. Employment creation was significant and well above the EU average. However, despite the positive trend, some of the pre-existing problems remain. The employment rate is still very low, particularly for women. Long-term unemployment has decreased significantly although it is s till high. There was an important increase in the number of stable jobs but the percentage of temporary employment, mostly of short duration, has not significantly decreased, affecting particularly women and young people . Although their employment rate has increased, women continue to have a disadvantaged situation in the labour market and they find it harder to leave unemployment and find stable employment. Regional disparities remain striking.
Policy-mix The Spanish employment strategy aims at the creation of stable employment. It relies both on a set of incentives for permanent contracts and on a substantial development of active policies for the unemployed, presenting a better balance with respect to passive support. This is complemented with legislative and administrative reforms to reduce firms fiscal and administrative costs and to improve the efficiency of markets. The employment policy is carried out within a high ly developed social dialogue.
Response to the 1999 Council Recommendations A serious effort is currently being made both at the central and regional level to modernise the public employment system (PES), increase its coordination and improve its data management. The effort to increase the efficiency of the actions at the beneficiary level is to be reinforced. Also, since 1997, the administrative and fiscal burden on firms has been reduced with successful initiatives such as the 'one stop shop'. Measures to ensu re equal opportunities involved guaranteeing proportional access to active measures, legislative initiatives and hiring incentives. Still, more should be done to facilitate female labour force participation.
Challenges ahead In 2000, efficient actions need to be further developed to address the problems of those facing more employment market difficulties. The effort to coordinate PES and improve their efficiency should be continued. Also, further measures should be taken to ensure the creation of stable and skilled jobs. Spain should intensify efforts to provide the labour force with adequate skills in the framework of a comprehensive strategy of lifelong learning. A serious efforts s hould be made to improve the quality of vocational education and training and to reduce the early school leaving rate.
1. Economic and employment situation
In 1999, the Spanish economy has continued to experience a very favourable evolution. Real GDP growth was 3,7% well ahead of the EU average. The employment growth rate was 3,4% reaffirming the very positive trend that has existed since 1997. Only in 1999, 612.000 new jobs were created. Accordingly, the employment rate has increased from 48,2% in 1997 to 52,5% in 1999. Despite the increasing proportion of people at work, the employment rate is still below the EU average of 62,2%. The employment rate of women is particularly low (37,6% in 1999) although it has been improving. The increase in employment has not yet absorbed the unemployed population and the unemployment rate is still high (15,9% in 1999) although sharply falling. The long-term unemployment rate has been significantly reduced from 9,4% to 7,3%, although it is still a serious problem mostly affecting women and older workers. The unemployment rate of women is more than double that of men (23,0% and 11,2% respectively), w hich is aggravated by the increasing number of women entering the labor force. Youth unemployment ratio has fallen from 14,5% to 12,5% in 1999 although their level of activity has also slightly fallen.
Regional disparities are impressive with some regions having less unemployment than the EU average and others showing unemployment rates above 25%. Geographical mobility has not been enough to reduce significantly the disparity in unemployment. It may also have been hampered by a high temporality rate (32,6% of all workers work are on fixed term contracts).
2. Overall Employment Strategy
The main objective of the Spanish employment policy as formulated in the Spanish National Action Plan is the creation of stable employment and the improvement of the labour market mechanisms. It is a comprehensive policy that aims to intervene in all fields: macroeconomic stabilisation, liberalisation of the markets for capital, goods and services and labour market reforms. Labour market reforms are being undertaken in a context of social dialogue, with most measures being negotiated wi th social partners. Most of the strategy is still built on the 1997 Agreement for Stable Employment agreed by the social partners. Among other measures, this agreement promoted the reduction of the costs of permanent contracts extended to women, young people and older workers. The other main action has involved an increase in the importance of the active policies delivered by the public employment services and its collaborating entities. The financial resources dedicated to active measures for employabi lity increased by or to 37% between 1997 and 2000.
Several legislative reforms have also been undertaken to improve working conditions in temporary work agencies, local cooperatives, immigration and compatibility of working and family life. An important national initiative has been launched aiming to increase the spread of information technology in society.
A new round of negotiations that will discuss labour market reform will start this year.
The employment policy is taking place in a dynamic context of institutional decentralisation, which will require persevering in the effort to strengthen the coordination among intervening agents.
3. Progress Assessment
3.1. General Appreciation
Over the last two years, the Spanish employment policy has presented coherent National Action Plans, which while addressing national specificity, prompted convergence towards the EES guidelines. Major efforts were made to develop activation and prevention under the Employability Pillar and on diminishing fiscal and administrative costs for firms under Entrepreneurship Pillar. Progress on flexible work organisation or equal opportunities has been less dramatic. In addition, the NAP does not adequately address the issue of regional disparities.
3.2. 1999 Implementation
In general, policies announced in the 1999 NAP were satisfactorily implemented. Financial resources dedicated to active policies increased by 15% between 1998 and 1999, which allowed an increase in the number of actions provided. Still, despite a satisfactory implementation effort, information on the effective impact of the different policies is scarce.
Regarding employability, 1,8 million actions were implemented covering 1,1 million beneficiaries, much more than predicted in last year's plan. Despite an increase in the preventive actions for adults, only 45% of the young people and 33% of the adults that became unemployed benefited from activation before they reached long term unemployment. A greater effort will be required to meet the Guidelines by the end of 2002. As regards GL 3, Spain met the common target in 1999. There seem to be regional disparities in the coverage. Most of the increase went to guidance services, with 600,000 more such actions carried out. There was much more difficulty in implementing aids to employment and particularly in setting up the project to develop local initiatives. The individualised pathways approach has not yet been generalised but is currently limited to experimental programs. There was nevertheless a substantial development of measures for people with disabilities. Regarding the effi ciency and adequacy of actions, in depth individual interviews are systematically carried out to direct unemployed to the most appropriate measure.
Attention should be paid so that the multiplication of intervening organisms does not affect the coordination and the effectiveness of the policies. More generally, as expenditure on active labour market policy increases, increased efforts will be required to ensure the efficiency of these measures and to monitor outcomes. The statistical system that integrates all public employment services is still being developed. Improvements in education are not apparent and the early school leavi ng rate is still worrying. Serious efforts have been made to reduce the tax burden on labour.
In the entrepreneurship pillar, regulatory changes and administrative simplifications have effectively decreased the burden for new firms. The 'one stop shop' has been set up and is being spread to more regions. The project to develop the potential of the local economy has not yet materialised but an effort was undertaken to set up a more comprehensive strategy that addresses the specific problems faced by those initiatives.
Concerning adaptability, the temporality rate failed to decrease although 528.000 new stable jobs were created that benefited from the social security reductions promoting permanent contracts. Complementary measures such as the reform of the temporary work agencies were taken to promote stability and improve job quality. Also 261.287 new stable part time contracts were signed in 1999 raising part time work from 7,7% of all employment in 1998 to 8,2% in 1999. A concrete strategy on lifelong learning that would promote stability has still to be presented although actions in lifelong learning have increased by 15%. There has been pressure from the government to diminish pre-retirement abuse and to encourage older people to remain in the labour force.
In order to promote gender equality, the new legislation on the reconciliation of working and family life was implemented. Special aids to employment targeted at women have been developed. Still, although women benefited to a large extent from active policies, they are still under-represented in the more effective and intensive measures. Mainstreaming is understood as guaranteeing a fair participation in all measures but no particular mechanisms to ensure it are described.
Social partners have been consulted during the preparation phase of the NAP. The plan was nevertheless approved without a consensus. The participation of both unions and employers association in the design of employment policies is established and constructive. They also take an active part in the management of some of the policies such as the national lifelong learning plan.
In 1999, the ESF provided financial support to active measures up to an amount of {{X80}} 1.771 million. Negotiations on the use of the structural funds for the 2000-2006 period have agreed that the bulk of the {{X80}} 11.317 million ESF contribution will be dedicated mainly to the development of active policies and to the support of lifelong learning. The ESF will pay particular attention to the mainstreaming of equal opportunities. Through its intervention, the ESF constitutes rt to the implementation of the measures announced in the NAP.
The 1999 Council recommendations on the implementation of Spain's employment policies
Pursue the preventive policies initiated in 1998, moving beyond the identification of the unemployed persons' needs by increasing the number and the efficiency of the individualised activation measures so as to reduce significantly the inflow of youths and adults into long-term unemployment;
Adopt and implement coherent strategies, encompassing regulatory, fiscal and other measures, designed to reduce the administrative burden on companies, in order to stimulate entrepreneurship and exploit the potential for more stable employment in the service sector;
Intensify efforts to mainstream equal opportunities in employment policy beyond the preparatory measures already announced in order to raise the female employment rate towards the average EU level;
Pursue efforts to upgrade the statistical monitoring system, so that policy indicators on prevention and activation will be provided by 2000 in accordance with agreed definitions and methods. This is particularly important in the current framework of decentralisation of active labour market policies.
There has been an effort to increase the number of intensive individualised activation measures, mostly targeted at unemployed facing more labour market difficulties. Preventative action is a substantial part of the activation effort and particular progress has been made in the case of adults. The results of the detailed interviews will be used to improve the adequacy of the measures offered by the public employment services although progress towards the generalisation of individ ualised solutions is not documented. The focus on activation is well reflected in the budget, with active measures increasing a further 32% in 2000. The system to improve the data management as well as the policy coordination of the regional systems will be further developed but there is a danger of overlapping and loss of efficiency in the multiplication of intervening agents.
To address the need to reduce the administrative burden faced by companies, the simplification of the administrative procedures will continue. Particularly, the 'one stop shop' that started in a few provinces as an experimental project proved satisfactory and will be extended. In addition, firms will be able to handle social security operations through the Internet. In an effort to exploit the service sector potential, INFO XXI, a national initiative for the spread of the inform ation society, has been launched. Involving {{X80}} 2.524 million, it aims at promoting internet use in households, schools and public administration.
Regarding the intensification of the mainstreaming of equal opportunities, actions are foreseen that support entrepreneurial projects among women and training in IT directed at women will intensify. There is a plan to develop a system of childcare and services to dependants but it will rely on the development ofcooperation among local agents. A more solid commitment may be called for in this area.
The existing Integrated System of Employment Services, which involves data collection and transmission, is being further developed to upgrade the statistical monitoring system of the prevention and activation policy and is expected to be functional during 2001. The project has become more ambitious in its monitoring and coordinating capabilities.
There are a number of other new initiatives in the NAP 2000. In the employability pillar, a new program is being created to increase labour market participation of older workers responding to the new guideline that requires providing incentives to join the labour force. This 'Active Integration Income' is an income support for adults over 45 involving a contract with the employment services to take the necessary steps to re-enter the labour force. Regar ding the public employment service, there seems to be a tendency to favour the development of hiring subsidies rather than that of direct employment aids to the unemployed. This involves moving towards measures that are likely to be less targeted. Addressing the new guideline requiring access to the information society in schools, the new INFO XXI initiative should equip all schools with computers before the end of 2001. Also, a new quality control system is introduced at an experimental stage in some te chnical education centres but no comprehensive plan is presented to solve the current problems of the educational system. In particular, no initiative is taken to face the problem of early school leaving. The integration measures for handicapped people as well as for immigrants continue to be developed and benefit from increased resources.
Regarding adaptability, agreements are being reached to extend the subjects included in collective bargaining to topics related to flexible working arrangements. A new agreement on continuous training is to be negotiated this year. Also, a comprehensive study is launched as a preliminary step for a national plan aiming at reducing the existing barriers to regional mobility.
Most regions have produced their own employment plan that detail the measures in employment policy to be financed by the regional authorities. The Spanish NAP would provide a more accurate picture of Spanish human resources strategy if it complemented the description of central administration measures with information regarding the additional regional measures taken to implement the employment guidelines.
|
Performance Indicators |
||||||
|
Spain |
||||||
|
Annual data |
||||||
|
Employment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Rate |
52,5 |
49,9 |
48,2 |
46,8 |
62,2 |
59,9 |
|
Males |
67,9 |
65,2 |
63,0 |
61,6 |
71,6 |
69,7 |
|
Females |
37,6 |
35,0 |
33,6 |
32,3 |
52,9 |
50,0 |
|
15-24 |
29,8 |
26,8 |
25,2 |
23,9 |
39,0 |
36,2 |
|
25-54 |
65,6 |
63,1 |
61,6 |
60,3 |
75,6 |
73,4 |
|
55-64 |
34,9 |
34,8 |
33,5 |
33,0 |
36,9 |
35,9 |
|
Full-time eq. Employment rate |
50,0 |
47,4 |
45,8 |
44,5 |
56,8 |
55,0 |
|
Males |
66,8 |
63,9 |
61,7 |
60,3 |
69,7 |
68,6 |
|
Females |
33,8 |
31,4 |
30,3 |
29,1 |
44,2 |
42,3 |
|
Unemployment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | |
|
Total Unemployment Rate |
15,9 |
18,8 |
20,8 |
22,2 |
9,2 |
10,8 |
|
Males |
11,2 |
13,8 |
16,1 |
17,6 |
7,9 |
9,6 |
|
Females |
23,0 |
26,6 |
28,3 |
29,5 |
10,8 |
12,4 |
|
Youth Unemployment Ratio |
12,5 |
14,5 |
16,1 |
17,3 |
8,5 |
10,2 |
|
Males |
10,8 |
13,0 |
14,9 |
16,2 |
8,5 |
10,3 |
|
Females |
14,2 |
16,1 |
17,3 |
18,4 |
8,5 |
10,1 |
|
Long-Term Unemployment Rate |
7,3 |
9,4 |
10,7 |
11,7 |
4,2 |
5,3 |
|
Males |
4,5 |
6,1 |
7,3 |
8,1 |
3,5 |
4,5 |
|
Females |
11,5 |
14,5 |
16,1 |
17,5 |
5,0 |
6,2 |
|
Annual change |
Employment related Economic Indicators |
|||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Growth |
3,4 |
3,6 |
2,8 |
1,3 |
1,4 |
0,7 |
|
Real GDP Growth |
3,7 |
4,0 |
3,8 |
2,3 |
2,4 |
1,6 |
|
Labour Productivity Growth |
0,3 |
0,2 |
1,1 |
1,1 |
1,0 |
1,0 |
|
Real Unit Labour Costs |
-1,1 |
0,3 |
-0,5 |
-0,6 |
0,0 |
-0,5 |
Conclusions
General appreciation: The economic growth that continued in 1999, accelerating strongly towards the end of the year, had a positive influence on employment developments. In spite of the fact that the employment rate in France improved in 1999, it remains below the EU average, but is slightly higher in full-time equivalent terms. The fall in unemployment accelerated at the end of 1999, but the unemployment rate is two percentage points above the European average. This fall mainly benefited the long-term unemployed, young people and women. The gap between the employment and unemployment rates of men and women narrowed.
Policy mix: These results are in keeping with the French strategy, which is designed to achieve growth that is more employment-intensive and benefits everyone. This strategy, which has had a positive effect on employment, has given priority to measures to assist young people, women and the long-term unemployed. This is the backdrop to the "new services, jobs for young people" programme, the agreements on the reduction of working time, the sets of measures contained in the Combating of Exclusion Act and the measures under the "new start" towards employment for the unemployed. More than half of the people seen by the public employment service in this context were women.
Response to recommendations: There is a risk that the measures taken to encourage the oldest workers to continue to work longer will not have a sufficiently dissuasive effect, given the magnitude of the problem.
In order to exploit the job creation potential of the services sector, new fiscal measures and venture capital support measures have been adopted to complement the programme to employ young people in the services sector, but they do not appear to go far enough to address the issues.
It has been decided to introduce a new system for reducing the non-wage labour costs of enterprises that have concluded agreements on the reduction of working time, in order to lower the tax burden on labour, especially unskilled and low-paid labour. The average rate of taxation of labour is still too high, however.
Negotiations on the reduction of working time have often led to agreements between the social partners, making it possible to speed up the modernisation of work organisation.
Challenges ahead: The efforts made so far in response to these recommendations must therefore be stepped up. Particular attention should be paid to reducing the tax burden on work, which remains above the European average. With this in mind, consideration should be given to revising the system of reductions in non-wage labour costs in connection with the reduction of working time.
Furthermore, the priority given to the long-term unemployed under the "new start" measures should be supplemented by strengthening the preventive measures offered to young people/adults who have been unemployed for 6/12 months, since these measures did not achieve their objectives for 1999.
The 2.9% increase in GDP in 1999 had a positive influence on employment, which rose by 1.5%. Labour productivity grew by 1.4%.
The employment rate rose from 59.9% in 1998 to 60.4% in 1999. It lies below the European average, but is slightly higher in terms of full-time equivalence. This improvement mainly benefited young people (increase from 25.2% in 1998 to 26.5% in 1999) and women (increase from 52.9% in 1998 to 53.5% in 1999). On the other hand, the employment rate of people over the age of 55 stabilised and remains very low (28.3%).
The unemployment rate fell from 11.7% in 1998 to 11.3% in 1999. However, it remains above the EU average. The fall in unemployment benefited women more than men (the female unemployment rate dropping from 13.8% to 13.3%). The difference between the female and male unemployment rates narrowed but remains high (3.7% higher for women). There was a major fall in the youth unemployment ratio (from 9.1% to 8.2%). Girls benefited more than boys from the fall in unemployment. The long-term unemployment rate fell from 4.9% to 4.4%.
There are three focuses to the French employment strategy: stronger growth, more employment-intensive growth and growth for all. This strategy aims to achieve full employment by the end of the decade.
The measures of the entrepreneurship and adaptability pillar, especially the reduction in working time, the reduction in non-wage labour costs on low wages and the creation of new jobs linked to the new services are designed to make growth more employment intensive. Lastly, the measures of the employability and equal opportunities pillars are designed to ensure that everyone benefits from this growth. This is true, in particular, of the measures to prevent and combat exclusion, the "new start" measures and the measures to combat early school leaving without qualifications.
The French NAP provides a precise diagnosis of the existing problems and establishes quantified objectives for most of the guidelines. The occupational integration pillar and equal opportunities policy remain the most important. Nevertheless, the most important medium-term implications may lie in the reorganisation of work in connection with the reduction in working time.
The results obtained so far have generally matched the forecasts. And yet, the early treatment of the unemployment of young people/adults before 6/12 months has not met expectations. However, considerable efforts have been made to promote the occupational integration of women, the long-term unemployed and people threatened with exclusion.
Employability: The "new start" measures for young people/adults in the first 6/12 months of unemployment in 1999 (69 000 young people and 154 000 adults) did not achieve the objective established. The non-compliance rate was 77.8% for young people and 74.8% for adults. Priority was given to the long-term unemployed and to persons threatened with exclusion, who make up 73% of the total number of beneficiaries of the "new start" measures (841 000 p eople). The latter have also benefited from the Trace programme (43 000 young people) and from all the measures under the Combating of Exclusion Act. The activation rate rose from 20.3% in 1998 to 22.5% in 1999.
Since 1998, minimal allowance recipients may cumulate their work-based earnings with the allowance during the first 12 months after they find a job. The first results of this scheme, which aims at encouraging disadvantaged people to return to the labour market, are positive (the number of minimum income recipients using this scheme has increased by 17% in 1999).
The establishment of relay classes in order to combat early school leaving without qualifications is continuing as planned. Under the ambitious programme for introducing ICTs into teaching, by the end of 1999, an Internet connection had been established in all general and technical upper secondary schools, 50% of vocational upper secondary schools, 60% of lower secondary schools and 15% of primary schools.
Entrepreneurship: The number of jobs created under the "New services, jobs for young people" programme rose from 160 000 in 1998 to 223 000 in 1999, slightly below the target announced in the 1999 NAP of 250 000 by the end of 1999. There is, however, the question of the longevity of these jobs. In order to consolidate these jobs beyond the subsidised period, priority is being given to the quality of the projects in relation to the relevance of the needs to be met.
Adaptability: As part of the application of the Act of 13 June 1998, by the end of March 2000 28 400 enterprise-level agreements on reducing working time had been concluded covering more than 3.1 million workers, and 132 sectoral agreements covering more than 10 million workers. According to national estimates (as of March 2000), the negotiations on the 35 hours working week will lead to the creation or maintenance of 182 000 jobs. This does not appear to be havi ng an adverse effect on the competitiveness of enterprises. In 1999, unit labour costs rose by only 0.2%. This was achieved through wage moderation, tax reductions and increases in productivity as a result of the new forms of work organisation. These agreements have also helped to give impetus to the social dialogue.
Equal opportunities: Equal opportunities policy was systematically incorporated into all pillars. The objectives laid down in the 1999 NAP for the participation of women in the integration measures were achieved overall (56% in the measures of the programme for combating long-term unemployment and exclusion and 54% in the "new start" scheme).
The role of the social partners was considerably enhanced. They were involved in drafting the NAP at a meeting chaired by the Prime Minister and at five working meetings. They are also helping to implement the measures of the NAP, especially in the areas of vocational training, adaptability and equal opportunities.
The contribution of the ESF mainly concerns the first pillar. The principal measures supported are the "new start" preventive policy, the policies to promote integration and combat exclusion and the measures to facilitate the transition from school to work. The rest of the ESF contribution concerns the adaptation of workers and equal opportunities. The ESF was implemented using greater decentralisation, which should make it possible to strengthen territorial employment strategie s.
The 1999 Council recommendations on the implementation of France's employment policies
(1) Review existing benefit schemes, particularly those facilitating early retirement, in order to keep older workers longer in active life.
(2) Adopt and implement coherent strategies, encompassing regulatory, fiscal and other measures, designed to reduce the administrative burden on companies, in order to exploit the job creation potential of the service sector, inter alia building on recent efforts to create new job opportunities for young people.
(3) Pursue and evaluate policy measures designed to reduce the fiscal pressure on labour, particularly those addressing unskilled and low-paid workers.
(4) Strengthen social partnership with a view to developing a comprehensive approach to modernising work organisation.
In order to keep older workers longer in active life, a series of measures was taken, including increasing the contribution that enterprises must make for the dismissal of any worker over the age of 50 (which was doubled). However, there is a need to examine whether these measures, on their own, are enough to reduce the number of early retirements.
The measures taken in order to exploit the job creation potential of the service sector ("new services, new jobs" programme, simplification of administrative formalities and support for venture capital) do not appear to go far enough to tackle the issues, especially in the private sector. As far as the reduction in the VAT rate on highly labour-intensive services that was adopted at the end of October 1999 is concerned, it is too early to assess its impact.
In order to reduce the fiscal pressure on labour, especially unskilled and low-paid labour, a further reduction in non-wage labour costs for the lowest wages, which is reserved for enterprises that have concluded agreements on the 35-hour working week, was introduced in 2000. The cost of labour is expected to fall by 18.5% for wages at the level of the statutory national minimum wage. Until the effects of this measure are felt, it has to be said that the average rate of taxation on labour did not fall in 1999 and remains too high (64.67% of gross wages). The same applies to the rate of taxation at minimum-wage level (48.34%).
The State authorities have made a major effort to strengthen the social partnership. In spite of the positions adopted by the employers' organisations in response to the Law on the 35-hour working week, the negotiations on the reduction of working time have given a boost to the social dialogue in many enterprises and have often led to agreements between social partners on the organisation of work.
One of the most salient aspects of the 2000 NAP is the plan to make a special effort to strengthen the first two guidelines and develop the local dimension of the programmes.
Employability: The forecast of the number of beneficiaries of the "new start" measures for the year 2000 is 1 100 000 people, including 240 000 young people who have been unemployed for less than six months and 440 000 adults who have been unemployed for less than 12 months, which is very ambitious in relation to what was achieved in 1999. Other measures planned under this pillar mainly concern the validation of experience, the system of certification and the esta blishment of an Internet connection in all secondary schools and 5 000 nursery and primary schools.
The local dimension will be enhanced in the measures to develop entrepreneurship. The public employment service and the persons responsible for implementing the "new services, new jobs" programme will have to strengthen local partnership and introduce genuine strategies for a given geographical area. Tax reductions are also planned for the new enterprises created and for the transfer of the conveyance duty on business assets.
In the area of adaptability, mention must be made of the new provisions of the Act of 19 January 2000 on the reduction of working time. This Act sets out the system governing overtime, opens up new possibilities for organising working time (modulation, "time savings account", provisions for managers, part-time work) and introduces new reductions in employers' social security contributions.
As far as equal opportunities are concerned, the focus in 2000 will be on mobilising the public employment service in order to make it easier for women to enter the labour market. The condition of length of unemployment, which is required to benefit from the "new start" system, no longer applies to women re-entering the labour market. Other specific measures are the inclusion in the agreements signed by enterprises of measures to combat discrimination in recruitment as a conditio n for benefiting from reduced social security contributions; the increase in the resources of the guarantee fund for the creation of enterprises by women; lastly, the quantitative and qualitative improvement in child care.
|
Performance Indicators |
||||||
|
France |
||||||
|
Annual data |
||||||
|
Employment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Rate |
60,4 |
59,9 |
59,4 |
59,7 |
62,2 |
59,9 |
|
Males |
67,5 |
67,2 |
66,8 |
67,3 |
71,6 |
69,7 |
|
Females |
53,5 |
52,9 |
52,1 |
52,3 |
52,9 |
50,0 |
|
15-24 |
26,5 |
25,2 |
24,3 |
25,5 |
39,0 |
36,2 |
|
25-54 |
77,2 |
77,0 |
76,6 |
77,1 |
75,6 |
73,4 |
|
55-64 |
28,3 |
28,3 |
28,9 |
29,1 |
36,9 |
35,9 |
|
Full-time eq. Employment rate |
57,0 |
56,7 |
56,2 |
56,4 |
56,8 |
55,0 |
|
Males |
67,5 |
67,3 |
66,9 |
67,0 |
69,7 |
68,6 |
|
Females |
47,0 |
46,4 |
46,0 |
46,3 |
44,2 |
42,3 |
|
Unemployment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | |
|
Total Unemployment Rate |
11,3 |
11,7 |
12,4 |
12,4 |
9,2 |
10,8 |
|
Males |
9,6 |
9,9 |
10,7 |
10,6 |
7,9 |
9,6 |
|
Females |
13,3 |
13,8 |
14,4 |
14,5 |
10,8 |
12,4 |
|
Youth Unemployment Ratio |
8,2 |
9,1 |
10,1 |
10,5 |
8,5 |
10,2 |
|
Males |
8,4 |
8,8 |
9,8 |
10,0 |
8,5 |
10,3 |
|
Females |
8,1 |
9,4 |
10,4 |
10,9 |
8,5 |
10,1 |
|
Long-Term Unemployment Rate |
4,4 |
4,9 |
5,0 |
4,8 |
4,2 |
5,3 |
|
Males |
3,6 |
4,1 |
4,2 |
3,9 |
3,5 |
4,5 |
|
Females |
5,3 |
5,8 |
5,9 |
5,9 |
5,0 |
6,2 |
|
Annual change |
Employment related Economic Indicators |
|||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Growth |
1,5 |
1,2 |
0,3 |
0,3 |
1,4 |
0,7 |
|
Real GDP Growth |
2,9 |
3,1 |
1,9 |
1,1 |
2,4 |
1,6 |
|
Labour Productivity Growth |
1,4 |
2,1 |
1,8 |
1,3 |
1,0 |
1,3 |
|
Real Unit Labour Costs |
0,2 |
-0,4 |
-0,7 |
-0,1 |
0,0 |
-0,5 |
|
General appreciation: As the economy in Ireland continued to grow exceptionally strongly throughout 1999 rapid job growth pushed the employment rate ahead of the EU average for the first time. With unemployment continuing to fall, labour and skills shortages now constitute one of the major challenges for the imminent future. Coupled with the tightening labour market, inflation has increased rapidly (in part due to exchange rate and energy price tre nds) and needs to be managed in order to sustain competitiveness and economic growth. Policy mix: The policies introduced or planned in this year's NAP show a distinct move towards labour mobilisation, with a clear focus on measures to tackle both skills and labour shortages, as well as strong commitments on gender equality and social inclusion. The conclusion earlier this year of the new 3-year Partnership agreement 'Programme for Prosperity and Fairness' (PPF) has meant that the Social Partners have had a strong influence on policy developments. Response to recommendations: Ireland is actively pursuing the recommendation to facilitate and increase the participation of women in the labour market on a number of fronts, including a tax individualisation programme and the introduction of a broad range of childcare initiatives. It is a very promising response, but it will also require a comprehensive follow-through, not least in the area of tax individualisation, if the large employment gender gap is to be re duced. There has been very rapid expansion in Irish service sector employment over the past 5 years (1994-1999). Service sector jobs now account for 63% of all Irish employment. The policy of continuing cuts in corporation tax rates, coupled with rapidly rising domestic real incomes, is considered as creating an appropriate environment for continuing expansion of the sector. The NAP announces a major new policy initiative in relation to in-company training, the introduction of a new National Training Fund financed through an employer levy. The success of this initiative will depend on the degree to which fund resources leverage increased investment in enterprise training and lifelong learning. Challenges ahead: The transformation of the Irish labour market has required a decisive shift in policy. If future labour force expansion requirements are to be met strategies will need to include efforts to further increase labour force participation rates, especially amongst married women and older workers, and to facilitate inward migration aimed at addressing skills shortages. These factors will help augment labour supply in the context of a slowdown in the natural increase in t he labour force. Sustaining productivity growth will require strategic efforts to continuously upgrade the skills and competencies of the Irish workforce, especially in the enterprise sector. This will require an increased emphasis on in-company training and lifelong learning, and the development of an operational framework for both. Efforts in relation to the strengthening of mechanisms to promote gender mainstreaming must be sustained, and continuing attention must be paid to the gender pay gap. |
The exceptional performance of the Irish economy continues, with 1999 being the 6th year of extremely strong economic growth. Real GDP growth, at 9.8%, is four times the Union average. Real Unit labour costs continue to decline, underpinning swift employment expansion - the numbers at work rose by 103,000 in the twelve months to the final quarter of 1999. The service sector accounted for over 70% of the total job growth. The employment rate, at 62. 5%, edged ahead of the EU average for the first time. While the female employment rate is rising more rapidly than its male counterpart, at 51.4% it remains below the average for the EU. The employment and pay gender gaps also remain wider than the EU average. Employment rates in the younger and older cohorts of working age are significantly above the EU average levels, however the employment rate in the prime working age cohort remains below the EU average, reflecting lower female labour force participa tion rates.
Unemployment (ILO) continued its downward spiral, falling to 5.7% of the labour force in 1999, or less than two-thirds of the EU average levels. Unemployment rates in all component groups {{SPA}} youth, long-term unemployed, men and women {{SPA}} are signally below average EU levels. By 1999 the long-term unemployment rate stood at just 2.3%. Both rates (unemployment and LTU) have continued to fall sharply in 2000.
Increased employment rates and sharply declining rates of unemployment are indicative of a further tightening of the labour market, already evident last year. All indicators of potential labour supply are falling steeply.
The NAP highlights the changing needs of the Irish economy, and the new emphasis on pursuing policies based on labour mobilisation, rather than focusing solely on tackling unemployment. It identifies existing skills and labour shortages as requiring differing policy responses. With new entrants to the labour market set to decline over coming years a new approach to immigration is being developed to ensure that economic growth rates, as set out in the NDP, are a ttained. The NAP recognises the considerable pressures on available supply resources, which are being reflected in higher wages and inflation, and the possible consequences of loss in competitiveness and slower growth. It recognises too the need to reposition Irish industry in terms of adaptability, to meet challenges of new technologies and skills and globalisation of markets, and reaffirms the strong commitment set out in the National Development Plan and the CSF to equal opportunities between women and men.
The National Development Plan 2000-2006 (NDP) includes a Programme for Employment and Human Resource Development, structured round the four pillars of the EES, which will account for expenditure of {{X80}} 14 billion over a 7-year period (25% of total planned expenditure).
To date, the policy emphasis within the NAP has been concentrated on the Employability pillar, and in particular on unemployment prevention. This NAP indicates that the preventive strategy will be rolled out to all groups even earlier than originally envisaged. The new orientation in labour market approach is evident, coupled now with continuing efforts to re-integrate the long-term unemployed. There is now a recognition that, within conditions of a very tight labour market, greater efforts must be directed towards labour mobilisation. Tax and benefit reforms are aimed at improving the reward from work and thereby enhancing labour supply. Within the present NAP greater weight has been afforded to the equal opportunities pillar, particularly with respect to increasing women's participation in education, training and employment. The new National Training Fund element of the Adaptability pillar is an interesting development, which will be elaborated in the conte xt of legislation to be introduced in Autumn 2000. Whilst this year's NAP is consistent with the plans set out in the NDP and the Programme for Prosperity and Fairness, 2000-2003 (PPF) the longer-term nature of these programmes means that it is important that the review mechanisms in place ensure their timely implementation. The capacity of the Irish economy and its research facilities to absorb effectively the very considerable research funding proposed under the Technology Foresight Fund in a manner tha t will result in enhanced competitiveness will need to be monitored. Much of the future success of the labour market is tied up with the stability and success of the Partnership agreement: how it addresses the strain of inflationary pressures remains to be seen.
Employability: As provided for in the 1999 NAP, the preventative approach was extended to the 25-34 age group in May of last year, and to the 35-54 age group in February 2000. The remaining group will be covered later this year, and the trigger point will be brought forward to 9 months for all groups. A modest improvement in effort for the younger age group can be seen, but figures for the adult unemployed cover only the last 6 months, so comparisons are not av ailable. However, the inflow into long-term unemployment for this group is relatively low. For guideline 3 the Irish calculate participation in ALMPs as 49.6% of the Live Register. Last year's NAP set a sub-target of 20% long-term unemployed on FÁS training programmes and this was exceeded (22%). The target
is increased to 25% for 2000. In promoting activation the low paid have been exempt from income tax, while the taxation of working married couples has been lightened. The introduction of the new minimum wage from April 2000 should also encourage higher levels of labour force participation. The Government has approved a restructuring of Community Employment (40% of ALMP places) to further concentrate on long-term unemployed and disadvantaged groups, as well as increasing the training co mponent.
Legislation to establish a National Qualifications Authority was enacted in July 1999; the structure is in course of being established. Funding for adult literacy has been significantly increased (albeit from a very low base considering the scale of the problem), and various new initiatives have been put in place. It is hoped that the upcoming White Paper on Adult Education will outline a comprehensive strategy, but there remains a concern that existing resources may not be sufficient t o address the problem. National certification was introduced for the first time for Youthreach (the early school-leavers programme), improving the progression route and subsequent educational opportunities, but early school leaving is still a concern, given the enhanced attractions of the labour market. The Education (Welfare) Bill published in 1999, which provides for the registration of young people under 18 who leave school early, and that an employer may not employ such a person without a certificate of registration, has now been enacted. A specific Post-Primary Retention Initiative, aimed at schools, was established in June 1999. Targets of the 3-year IT 2000 programme were met after two years, the National Centre for Technology in Education has been established, and the Scoilnet website launched. In the area of High-Technology an additional 5,400 places in universities and institutes of technology are provided for over the period 2000-2002 (in accordance with recommendations of t he Expert Group on Future Skills Needs).
Entrepreneurship: The graduated reduction in the standard Corporation Tax rate, as provided for in the 1999 NAP, continued (down from 32% to 28%). The developing roles of Enterprise Ireland, County Enterprise Boards and local development partnerships are clearly set out in the NAP. Ireland now ranks 7th overall in the international league of national competitiveness (moved up between 11 and 15 places in various recent studies {{SPA}} OECD, World Economic Forum, Institute agement Development). A Social Economy Programme was approved by Government in July 1999, and the operating framework and resources for 1999/2000 have been agreed.
Adaptability: An initiative aimed at enhancing awareness of the significance and business implications of eCommerce and eBusiness was launched by Enterprise Ireland in October 1999, as one element of a comprehensive Government strategy on the Information Society. In relation to in-company training the NAP refers to a recently-published study by the Employers Federation (IBEC) which suggests that enterprise training expenditure is now at 3% of payroll. Further work may be needed to v alidate this information.
Equal opportunities: Considerable progress is evident: an extremely strong commitment to gender mainstreaming is contained in the NDP and the CSF, including structures for monitoring across all areas of the Plan, as well as various initiatives, particularly in the area of childcare (grants, taxation allowances, training, and a childcare census and database). A 'Term-time' initiative is currently being piloted in a limited number of Government Departments (allowing parents to take lea ve during the summer months).
Social partners: Social Partnership has evolved substantially in Ireland over the past 15 years. The latest national partnership agreement, the PPF, demonstrates the continuing shared understanding between Government and the social partners on the need for collaborative effort to achieve shared social and economic goals. The PPF is particularly notable for its strongly-developed social inclusion and equality dimensions. The Social Partners were formally consulted on the preparation of the NAP.
ESF and the structural funds: The NAP sets out in detail the future role of the ESF in delivering the EES through the new Employment and Human Resources OP, structured around the four pillars of the European Employment Strategy. However, in quantifying the expenditure the NAP omits the considerable funding devoted to childcare under the Regional Operational Programmes ({{X80}} 317 million in total expenditure, representing the single biggest investment in pursuit of equalit een women and men. The ESF contribution - {{X80}}115 million - represents 11% of the total planned ESF expenditure in the period 2000-2006). The ERDF has also made a significant contribution in terms of global investment in job creation, and will play a very strong role under the new CSF particularly in the areas of childcare and research and technology investment.
|
The 1999 Council recommendations on the implementation of Ireland's employment policies (1) Adopt a comprehensive strategy to increase the participation of women in the labour market, including the removal of tax-benefit disincentives, and putting in place measures which facilitate the reconciliation of work and family life. In particular, a sustained effort to raise the standards of care for children and other dependants and flexible leave schemes is called for; (2) Pursue recently implemented policies, encompassing regulatory, educational and fiscal measures, in order to further exploit the potential for job growth in the service sector; (3) Intensify policy efforts to expand and improve in-house training of employees. |
Ireland is actively pursuing the recommendation to facilitate and increase the participation of women in the labour market on a number of fronts. Two principal instruments have been utilised. First, this year's Budget introduced the first stage of a tax individualisation programme, which should increase the incentive to work, in particular for married women. Second, Budget 2000 introduced a broad range of childcare initiatives, from capital grant s for the provision of childcare facilities to supports for childcare training and the development of local childcare networks. In addition, the new social partnership agreement undertakes that negotiations on an equitable strategy to support parents in meeting their childcare needs {{SPA}} including proposals on direct payments per child {{SPA}} will be completed before the end of 2000 and will be implemented during the term of the agreement. The establishment of a National Framework to support and devel iendly policies at enterprise level has been agreed by both government and social partners.
With employment in services exceeding 1 million for the first time in 1999 it would seem that recently implemented policies are having a strong impact in this area. The expansion has been driven by rapidly rising domestic real incomes, an enhanced performance by internationally-traded services and continuing cuts in corporation tax rates, scheduled for cumulative reduction to 12.5% by end-2002.
The major new policy initiative in relation to in-company training was the announcement in Budget 2000 of the introduction of a new National Training Fund, to be financed through an employer levy of 0.7%, with a corresponding reduction in employers' social insurance contributions. The establishment of the Fund does not involve any additionality in the year 2000 in terms of in-house training: resources will be used to finance existing training supports in and for employment. Howev er it is expected that, over time, the growth in fund revenues will provide new resources for in-company training and life-long learning programmes.
Employability: In an effort to increase the attractiveness of work, single people earning less than {{X80}} 140 per week have been exempted from the income tax system from April 2000. Simultaneously, the standard and higher income tax rates have each been cut by 2 percentage points to 22% and 44% respectively. A national minimum wage was introduced for the first time, also in April 2000, at an hourly rate of {{X80}} 5.59. The role of the National Employment Service within continues to be strengthened, with the integration of Local Employment Service (LES), and the transfer of
responsibility from the National Rehabilitation Board for the provision of employment and vocational training services for people with disabilities. Annual spending on adult literacy is effectively scheduled to double in the years 2000 to 2002, compared with a base provision of {{X80}} 7.24m in 1999, although absolute spending levels remain relatively low. A White Paper on Adult Education is foreseen. Targets are set in relation to the further development of the Schools IT nbsp;programme, with the objective of ensuring that all pupils have access to ICT facilities.
Entrepreneurship: Substantial new resources have been allocated for competitiveness-improving new technologies over the period of the NDP. These include almost {{X80}} 2.5billion in research, technology and innovation programmes, of which {{X80}} 1.5billion is targeted at industrial development-related Science and Technology schemes. In addition, the Technology Foresight Fund intends to invest {{X80}} 711 million between 2000 and 2006 in researching niches within biot . The capacity of the Irish economy and its research facilities to absorb effectively this research funding should be monitored. The Government is also investing heavily in creating the research, legal and business conditions which will foster the development of electronic commerce and digital industries (a Bill to give effect to electronic signatures and contracts, published in March, has now been enacted). Budget 2000 cut the standard corporation tax rate from 28% to 24%. Furthermore the 12.5% standar d rate of corporation tax, that will apply generally from 2003, has been brought forward to 1 January 2000 for SMEs with trading profits below {{X80}} 63,487. The dedicated Social Economy programme is allocated {{X80}} 12.69m in 2000, and this figure is expected to rise to {{X80}} 52m when the programme is fully operational.
Adaptability: A Task Force on lifelong learning has been established focusing on adaptability and upskilling, and the access to learning opportunities necessary to meet these goals. In March 1999 a new working visa system was introduced to ease skills and labour shortages in certain occupational categories where labour is in particularly short supply. Adaptation policy also concentrates on developing and exploiting the Information society. The Social Partners have agreed a range of topics to be taken up in partnerships at company level, such as better work organisation, personal development and family-friendly working arrangements.
Equal Opportunities: The strong commitment to gender mainstreaming in both the NDP and CSF is mirrored in the NAP. Specific initiatives include the development of a databank of gender disaggregated statistics for all areas across the NDP, and the implementation of a programme of positive action measures for women, with a budget of almost {{X80}} 30million. A report on Male/Female wage differentials is to be published by the ESRI in September 2000, and a consultative group, whic include the social partners, will develop policy proposals arising from the report's recommendations.
|
Performance Indicators |
|||||||
|
Ireland |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
62,5 |
59,7 |
56,4 |
54,9 |
62,2 |
59,9 | |
|
Males |
73,6 |
71,0 |
68,0 |
66,8 |
71,6 |
69,7 | |
|
Females |
51,4 |
48,2 |
44,7 |
42,8 |
52,9 |
50,0 | |
|
15-24 |
46,5 |
43,0 |
38,3 |
35,6 |
39,0 |
36,2 | |
|
25-54 |
73,3 |
70,6 |
67,5 |
66,5 |
75,6 |
73,4 | |
|
55-64 |
43,8 |
41,6 |
40,3 |
40,5 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
58,3 |
55,4 |
52,8 |
51,1 |
56,8 |
55,0 | |
|
Males |
72,9 |
69,7 |
66,3 |
64,6 |
69,7 |
68,6 | |
|
Females |
43,5 |
41,0 |
39,2 |
37,8 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
5,7 |
7,8 |
9,8 |
11,6 |
9,2 |
10,8 | |
|
Males |
5,8 |
8,0 |
9,8 |
11,5 |
7,9 |
9,6 | |
|
Females |
5,5 |
7,6 |
9,8 |
11,8 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
4,2 |
5,5 |
7,0 |
8,0 |
8,5 |
10,2 | |
|
Males |
4,6 |
6,1 |
7,9 |
9,0 |
8,5 |
10,3 | |
|
Females |
3,9 |
4,8 |
6,2 |
7,0 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
2,3 |
3,2 |
5,3 |
6,9 |
4,2 |
5,3 | |
|
Males |
2,5 |
3,5 |
5,8 |
7,4 |
3,5 |
4,5 | |
|
Females |
2,0 |
2,8 |
4,4 |
6,0 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
5,1 |
5,0 |
5,6 |
3,8 |
1,4 |
0,7 | |
|
Real GDP Growth |
9.8 |
8,6 |
10,7 |
7,7 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
4.5 |
3,4 |
4,9 |
3,9 |
1.0 |
1,0 | |
|
Real Unit Labour Costs |
-1.4 |
-2.8 |
-3.5 |
-2,8 |
0,0 |
-0,5 | |
|
General appreciation: labour market conditions improved in 1999, principally due to the adoption of fiscal incentives and flexible work arrangements. Social dialogue favoured the introduction of these measures. The structural problems of the Italian labour market require further actions: difficulty for youth and the long term unemployed to (re)enter employment; unfavourable gender differentials; regional imbalances; undeclared labour. Policy mix: policy improvements can be noticed. Progress was noteworthy in the Adaptability and Entrepreneurship pillars. In addition, other steps were taken in the right direction, by completing the reform of the education system, by continuing to shift tax and contributions burdens away from labour and by increasing training and apprenticeship opportunities. Under Employability legislation has been introduced, but the scope of the reform launched and administrative delays hindere d the practical implementation of policies. Response to recommendations: full implementation of the preventative approach is proceeding slowly. Restructuring and modernisation of the PES, when achieved, will represent a building block. The devolution of the PES to the Regions was completed and the tasks for the new local employment centres were set. The implementation delays meant that the data required for the monitoring of policy developments was not collected according to the commonly agreed methodology. Measures further alleviating fiscal and administrative burdens on firms were introduced. The reform of the unemployment benefit system was postponed to 2001. Measures aimed at favouring equal opportunities were taken, but they need to be strengthened in order to reduce the gender gaps significantly. The challenges ahead: last year's recommendations were partly met, but further and faster action is required, especially in the fields of active policies aimed at preventing and/or reducing youth and long term unemployment and gender gaps. The reform of the benefit system should not be postponed further; the environment conducive to the development of employment in the service sector could be improved; action needs to be taken on a strategy for lifelong learning; upgrading of the mon itoring and evaluation system is essential.
|
GDP growth, at 1.4%, was lower than the 1999 EU average. Employment grew by 1.0%. High elasticity of employment with respect to the rate of growth of output is thus also an effect of a different distribution of work among the employed. The employment rate rose to 52.5%, mainly due to the growth of the service sector. It remained below the EU average, mainly due to the female component: the differential is 4.5 points for men, and 14.8 points for women. The fe male employment rate grew more than male employment rate (1 and 0,5 percentage point respectively). Employment rates for the young and older people did not grow.
The recovery of employment started to re-absorb the stock of persons searching for a job. The rate of unemployment fell to 11.3%; the female unemployment rate was 15.6%, almost twice that of males, at 8.7%. Youth unemployment decreased slightly, even though the unemployment ratio for 15-24 year-olds was almost 4 percentage points above the EU average. The long-term unemployment rate, which remained almost unchanged, or marginally worsened in Southern Italy, is still above the EU average.
Regional differentials characterise Italian unemployment. Southern Italy accounted for 35% of the resident population, for 28.1% of employment and for 61.3% of the number of persons in search of employment. The unemployment rate was 6.5% in the Centre-North and 22% in Southern Italy.
The NAP foresees employment growth rates, expressed in terms of full-time equivalents, slightly below 1% between 2000 and 2003 and a fall in the average unemployment rate to 9.3% by 2003, with a higher speed of reduction in Northern than in Southern Italy.
The employment strategy is split into three lines of actions. The first one aims at raising the rate of growth, especially in the South. The instruments to be adopted are: incentives to competitiveness; increased public capital expenditure; a privately financed expansion of public works and services; tax cuts; privatisation and liberalisation programs. The second line of action operates on the supply side through: (i) reforms aiming at reducing the unemployment differential between you th and adults (PES implementation, a new apprenticeship scheme, etc.); (ii) measures designed for adults (reform of social relief benefits, new contracts for re-entering the labour market, lifelong learning); (iii) reforms of corporate law and public administration simplifying firms' start-ups and localisation, enlargement of capital markets, etc. The third line is to set up actions for Southern Italy. Two structural policies are emphasised: contribution-related measures for the "surfacing" of enterprises and workers; reduction of tax and contribution burdens on labour.
Some of the policies adopted in 1999 appear to have been effective, mainly in meeting the demand of enterprises for higher flexibility of work arrangements. An effort was made to structure the policy mix in terms of pillars, but imbalances remain in the way and in the speed at which actual policies are meeting the guidelines. Progress can be seen, in particular, in the Adaptability and Entrepreneurship pillars. The reduction in both tax burdens on firms and in labour costs is continuing.
As for Employability, further steps were taken in the right direction, by increasing training and apprenticeship opportunities. Social dialogue favoured these developments. Delays in reforming employment services are however hindering the implementation of active labour market policies fostering a preventive approach to long-term unemployment. Delays occurred also in the completion of development projects in the South, even though budgetary commitments increased.
In the face of differentials in territorial unemployment rates, no policy supporting regional mobility of labour was proposed. Measures related to Equal Opportunities appear mainly experimental and of limited impact.
Employability: Active measures increased in 1999. Measures for preventing young and adult long-term unemployment, operated through the PES, are envisaged to become gradually operative and - to be fully implemented by 2003. With respect to employment services, the wide-ranging initiatives set up in 1999 were partly activated. The process of devolution of the PES to the Regions was completed although implementation is proceeding in some Regions only (234 Employm ent Centres were activated in the Centre-North and 8 in the South). The deadline for the completion of the Employment Information System, set for mid-2000, shifted to the end of the year. The general reform of the social benefit system and employment incentives was also postponed to March 2001. More than 20% of the unemployed registered with PES were involved in training programmes and/or subsidised work experience. Several measures for the employment of disadvantaged persons were introduced.
The number of advanced training courses involving work experience in firms increased. The reform of the education system was completed. Schools and Universities were given more autonomy and more effective actions were undertaken against early school leaving in Southern Italy. Accreditation of training establishments and the development of a certification system for vocational training is under way. 21.000 projects for the purchase of multimedia stations in schools were financed. 487 Permanent Training Centres were set up and 200.000 adults enrolled for adult education courses.
Entrepreneurship: The main actions refer to labour cost: contribution burdens went down by 0,82%; total contribution relief for firms in the South are still in place; the system of incentives and relief available to industrial firms was extended to the non-profit sector. Measures favouring youth entrepreneurship and the set up of new business ventures obtained results. "Planned Programming" led to an increase in budgetary commitments related to territorial pacts in areas of high une mployment where social dialogue is particularly emphasised. Administrative simplification is being pursued through the "single counter" for firms, though implementation is at the moment partial (45% in the North and 33% in the South). The promotion of youth and female entrepreneurship and "Honour loans" are proceeding together with action programmes for the diffusion of an enterprise culture in schools.
Adaptability: Results were obtained mainly through a new regulation and incentives for part-time work (the target of 100.000 new jobs was overshot by 40.000) and through fixed-term contracts (apprenticeship, temporary work, etc.), addressing mostly women and young workers. A non-discrimination principle and worker's consent were included in the part-time regulation particularly to prevent an unfavourable impact on women. Social dialogue led to further spread and regulation of labour flexibility. The legislative action relative to contracts exchanging work time for training activity and to the regulation of coordinated and continuing cooperation schemes proceeded. The development of temporary work concerned 200.000 persons.
Equal opportunities: The initiatives to favour female entrepreneurship (enterprise creation in particular) were confirmed. Maternity income support is to be provided to large families and to women without other social security coverage. A reform of care services and nursery schools was started. The opportunities for parental and training leave were enlarged.
Social Partners: The NAP expressed clearly the wide consultation of social partners on all important Government decisions. The formalisation of social dialogue occurred through the 1998 Christmas Pact. Social partners agreed with the broad strategy of the NAP. However they asked the Government to take more effective and rapid actions on PES implementation, on further lowering the labour tax burden and on administrative simplification. They also asked for a renewal of the legi slation on social benefits and on the regulation of part-time work. Controversial issues remain, particularly on flexibility policies, on which further negotiation is proceeding.
The ESF and the Structural Funds: Compared to 1998, ESF commitments supported a broader range of national policies. More than 20% of the total funding was allocated to Pillar 3, i.e. continuing training, with special regard to the employability of persons of working age. 1395 M {{X80}} (about 70% of the total) were committed to preventive measures, specifically targeted on young people in search of their first job, adult unemployed, and disadvantaged persons. Significant support w en to initiatives to enhance equal opportunities.
The reform of the PES, the implementation of the preventive approach, and the development of the training system, will be pursued through the 2000-2006 ESF programmes, as will other national and regional policies. 10% of total resources is devoted to the improvement of equal opportunities, for both mainstreaming and specific actions.
|
The 1999 Council recommendations on the implementation of Italy's employment policies (1) Take decisive, coherent and measurable action to prevent young and adult unemployed people from drifting into long-term unemployment. In particular, strengthened efforts should be made to complete the reform of employment services, to implement preventive policies in compliance with guidelines 1 and 2, and to improve the quality of vocational training. Efforts to upgrade the statistical monitoring system should be pursued, so that policy indicators on prevention and activation will be provided by 2000 in accordance with agreed definitions and methods; (2) Adopt and implement coherent strategies, encompassing regulatory, fiscal and other measures, designed to alleviate the administrative burden on companies, to stimulate entrepreneurship and exploit the job creation potential of the service sector; (3) Continue current reform efforts designed to shift away the tax burden from labour to other tax bases; (4) Continue the implementation of the reform of pension and other benefit systems in order to reduce the outflow from the labour market into pensions and other schemes; (5) Adopt comprehensive policies in order to address the wide gender gaps in employment and unemployment, inter alia by building on existing specific initiatives. Gender policies should also be mainstreamed under all the pillars of the National Employment Action Plan. |
The reform of PES and the Employment Information System implementation continued, but was insufficient. Indicators allowing for effective monitoring of preventive policies have not been supplied in accordance with the commonly agreed methodology. The NAP 2000 sets tasks and minimum standards of operation for the new Employment Centers and confirms that, while progress continues, the full implementation of the preventive measures for youth and long-term unemployment and of PES will be op erational by 2003. Therefore, recommendation 1 was partially met.
The recommendation to alleviate administrative burdens on firms, to stimulate entrepreneurship and to foster services was partly met. Firms' administrative procedures were simplified through the introduction of the single counter, which is however far from reaching a complete territorial coverage. Measures were also taken to create jobs in the cultural and environmental sectors.
The recommendation to lower the tax burden on labour was pursued by continuing the fiscal and contribution reductions introduced in 1998-99, though to a lesser degree. The 2000 Finance Act sets small reductions for contribution charges on wage costs (0,2% cut in maternity contributions and 0,5% cut in the National Insurance premium against work accidents). Possibilities such as the extension of the Dual Income Tax to corporate firms and the revision of the regional tax on economic activ ities in favour of smaller enterprises, were mentioned in the NAP without details. These positive actions should be pursued.
The reform of the unemployment benefit system, which was to be completed in 1999, was postponed to 2001. A further revision of the pension system is expected to be undertaken by 2001, in the meantime, reforms of pension schemes already agreed continue to operate.
Actions in order to promote gender mainstreaming in all pillars were taken. However, the process of gender mainstreaming is still in its preparatory phase. Female employment is expected to grow especially through the increasing use of part-time and flexible contracts. Attention was paid to the extension of care, nursery and supplementary services and to the introduction of parental leave. Further concrete steps are needed to fully address the wide gender gaps, as recognised by the NAP itself.
New aspects of the GL 2000 were partly addressed. In line with the Lisbon conclusions, the Finance Act 2000 provides for further financing of computers in schools and for young people, together with teachers' training programs. It also allocated £. 330 billion in 2000-2002 for entrepreneurial initiatives related to ICT and e-commerce. A plan for the development of scientific and technological research will be financed, with the target of increasing employment of new qualified research ers by 30.000 units in three years. The actions taken will be part of a plan developing the Information Society and a knowledge based economy. There was no action on incentives for (re)entering the labour market especially tailored to youth and the long-term unemployed, nor easier access to risk capital markets.
Employability: Funds for "Socially Useful Jobs" are to be re-allocated in favour of employers hiring workers under this heading and of other actions for job placement by an agency of the Ministry of Labour. By 2002, all young persons aged 15-18 who drop out of the school system will be involved in vocational training projects, or, if already hired under apprenticeship contracts, they should be given at least 120 hours of off-the-job training enhancing general skills. Guidelines for enlarging the adult education system were approved, but details on organisation and quantitative targets were postponed. No particular actions were proposed on life-long learning.
Entrepreneurship: Initiatives exist for "training for development", such as training of development capacity builders. Fiscal measures were taken, such as reductions in VAT on private building renewal. ISTAT is taking the first census of the non-profit sector. Appreciating the widespread diffusion of undeclared labour markets, "re-alignment" and "surfacing of undeclared labour" contracts will be redrawn.
Adaptability: The incentive for part-time working through reduction in contributions became operational. Contracts allowing for temporary employment were extended to the building industry and the agricultural sector. Measures aiming at regulating working time were financed and the legislation on the reduction of overtime was re-defined. The 2000 Finance Act reduced contribution-related inequality between people working under different types of contracts.
Equal Opportunities: A Female Employment Monitoring Unit was set up in order to measure the impact of policies and to spread information. The Flexibility Monitoring Unit monitors the gender effects of flexible work arrangements. The activities of the Female Equality Advisors were regulated by a decree. The law in favour of self-employed women was further extended.
|
Performance Indicators |
|||||||
|
Italy |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
52,5 |
51,8 |
50,5 |
50,6 |
62,2 |
59,9 | |
|
Males |
67,1 |
66,7 |
65,0 |
65,3 |
71,6 |
69,7 | |
|
Females |
38,1 |
37,1 |
36,2 |
36,1 |
52,9 |
50,0 | |
|
15-24 |
25,5 |
25,4 |
25,2 |
25,4 |
39,0 |
36,2 | |
|
25-54 |
66,9 |
66,2 |
65,5 |
65,5 |
75,6 |
73,4 | |
|
55-64 |
27,5 |
27,7 |
27,3 |
27,3 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
50,8 |
50,3 |
49,1 |
49,3 |
56,8 |
55,0 | |
|
Males |
66,4 |
66,0 |
64,4 |
64,8 |
69,7 |
68,6 | |
|
Females |
35,7 |
35,0 |
34,2 |
34,3 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
11.3 |
12,2 |
12,1 |
12 |
9,2 |
10,8 | |
|
Males |
8.7 |
9,4 |
9,3 |
9,4 |
7,9 |
9,6 | |
|
Females |
15.6 |
16,7 |
16,6 |
16,4 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
12,4 |
12,9 |
11,9 |
12,1 |
8,5 |
10,2 | |
|
Males |
12,3 |
12,8 |
11,6 |
11,9 |
8,5 |
10,3 | |
|
Females |
12,5 |
13,0 |
12,2 |
12,3 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
6,9 |
7,1 |
7,6 |
7,7 |
4,2 |
5,3 | |
|
Males |
5,3 |
5,6 |
5,9 |
5,9 |
3,5 |
4,5 | |
|
Females |
9,3 |
9,6 |
10,4 |
10,6 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
1,0 |
0,6 |
0,1 |
0,4 |
1,4 |
0,7 | |
|
Real GDP Growth |
1,4 |
1,5 |
1,8 |
1,1 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
0,5 |
0,4 |
1,5 |
0,8 |
1.0 |
1,0 | |
|
Real Unit Labour Costs |
0,0 |
-4,7 |
0,2 |
0,0 |
0,0 |
-0,5 | |
Conclusions
|
General appreciation: Thanks to the dynamism of the economy in recent years, Luxembourg has seen a strong increase in employment, and its domestic employment rate has reached the EU average. In spite of this positive development, Luxembourg still has a very low employment rate among workers over the age of 55 years and women, and a low level of participation in continuing training. The "apparent" employment rate is extremely high, with the Luxembou rg labour catchment area extending far beyond national administrative borders. Border workers occupy more than one third of paid national employment, which explains the strong growth in employment in the virtual absence of a pool of qualified labour in the country. Policy mix: The Luxembourg employment strategy focuses on strong and employment-intensive growth and growth for all. This policy is based on strong activation measures, a highly preventive approach to combating unemployment, the development of a favourable climate for business creation and a strong social security net, resulting in a very low level of poverty. Response to recommendations: The social partners play a crucial role in Luxembourg. The 1998 and 1999 NAPs were always based on a tripartite agreement transposed into national legislation. This explains the delay in the implementation of the planned reforms. Furthermore, given the absence of a tripartite agreement, the Luxembourg Government was unable to present a NAP for 2000 setting out the main reforms that it had planned, especially in response to the Council recommendations. The document presented is therefore limited to an implementation report for 1999, during which Luxembourg took measures to improve the position of women on the Luxembourg labour market (parental leave, child care) and adopted a framework law on continuing vocational training.. Challenges ahead: Against the background of "full employment" in Luxembourg, and building on the success of its preventive policy that already goes beyond Guidelines 1 and 2, workers over the age of 55 should be encouraged to continue to work. The recent framework law on continuing vocational training is a step towards the qualitative adaptation of workers. Nevertheless, this remains one of the main issues of the future, and attention will have to be paid to the implementation in order to ensure a significant increase in the level of continuing training. The widespread application of the principle of equal opportunities has begun to have an effect on the position of women on the Luxembourg labour market. The introduction of positive discrimination should further improve their chances of finding employment. The difficulties encountered in the tripartite committee should encourage the partners to return to the path of constructive dialogue, which is essential for the success of the commitments made under the employment promotion plan. Lying at the center of an euroregion where there are about 500.000 jobless persons, Luxembourg should pursue its efforts towards simplification of existing mechanisms in order to reach a more favourable climate for development of entreprises and to exploit further the potential for job creation made possible by its sound economic situation. |
The Luxembourg economy has been growing strongly since 1985. GDP increased by 7.5% in 1999, which was faster than the European average (2.4%). This growth led to net job creation of 4.9%, which was the second best result in the EU, and a very low unemployment rate (2.3%).
The domestic employment rate (61.6%) is slightly below the EU average (62.2%), whereas the "apparent" employment rate is 91%, given the influence of border workers. This is because the Luxembourg labour catchment area extends far beyond national administrative borders. Border workers account for 34% of paid national employment, which explains this strong growth in total employment in the absence of strong wage tensions, in spite of the virtual lack of a pool of skilled labour in the cou ntry. The employment rate of workers over the age of 55 (26%) is one of the lowest in the EU, and, in spite of a recent rise in the employment rate of women, Luxembourg has a considerable male-female gap and a participation rate (48.5%) that is below average for the Union.
In comparison with the other Member States, the situation remains very favourable: Luxembourg has very low rates of total unemployment (2.3%, 5,351 people in 1999), long-term unemployment (0.8%) and youth unemployment (2.3%), which is partly the result of an activation policy launched in 1995 and reinforced by the NAPs. Generally speaking, the main problem in Luxembourg is not unemployment in the "traditional" sense (made up of job-seekers), but rather the early exclusion from the labour market of a significant proportion of the population of working age, which is put into "store" in passive schemes. This leads to non-employment in the broad sense, which is estimated to concern 13% of the labour force {{SPA}} i.e. more than 25,000 people out of a domestic labour force of 183,000, and is made up of job seekers and beneficiaries of active labour market measures and of passive schemes (early retirement, invalidity pensions).
The Luxembourg employment strategy focuses on strong and employment-intensive growth and growth for all. It should be noted, however, that border workers fill 75% of the new paid jobs created.
The increase in the domestic employment rate is the aim of the measures of the entrepreneurship and adaptability pillar, such as the reform of continuing training, the reduction in administrative formalities to set up a company, parental leave, an increase in the number of childcare places, and the encouragement of new jobs linked to local services. Lastly, the measures of the employability and equal opportunities pillars are designed to ensure that everyone benefits from this growth. T his is true, in particular, of the measures to prevent and combat exclusion, the "new start" measures and the measures to combat early school leaving without qualifications.
The social partners play a pivotal and crucial role. They are directly involved in the implementation of the plan.
Luxembourg has developed a comparatively dynamic employment policy, which was strengthened by the NAPs and which can go some way towards explaining the low level of unemployment in this country. This policy is based on strong activation measures (more than 2 200 people benefit from these measures, in comparison with the 5 351 people who are unemployed), a preventive approach to combating unemployment, characterised by early identification of abilities and personalised support f or job seekers, the development of a propitious climate for setting up businesses and a strong social security net, resulting in a very low level of poverty.
The 1998 and 1999 NAPs were based on the tripartite agreement of 18 April 1998, which was transposed into legislation on 12 February 1999. This explains a delay in the implementation of the planned measures. Accordingly, a major law on continuing training was adopted in June 1999 but did not enter into force until January 2000. These NAPs have broader scope than a simple annual programme, and efforts should therefore be maintained. An evaluation of all the measures taken und er the NAPs is planned for 2003.
Employability: Luxembourg is consolidating its active policy of preventing and combating youth unemployment and long-term unemployment (which fell in 1999). It will be recalled that Luxembourg decided to go further than the thresholds set out in Guidelines 1 and 2 and set itself the ambitious objective of reaching all young people before they have been registered for three months, and all adults before they have been registered for six months. Priority was given to young people ente ring working life and to adults lacking work on a temporary basis. Mention should be made of an improvement over time, with the rate of non-compliance falling from 29.9% in 1998 to 13.8% in 1999 for young people (out of a flow of 6 500/year), while the same rate for adults has improved just as much {{SPA}} from 63.1% in 1998 to 41.4% in 1999 (out of a flow of 11 000 people in 1999). The total number of active measures on offer increased slightly (+2% in volume between 1998 and 1999), while the N posed efforts in the area of the training of residents, with limited results, precisely because of a fall in unemployment and an increase in domestic employment.
Certain socio-economic studies explain the recruitment of border workers partly by their level of training, their flexibility, their geographical mobility and their adaptability. Therefore, in order to raise the level of domestic employment (which increased in 1999), the NAP proposed efforts to train resident workers and unemployed people. The recent framework law is therefore a major step forward towards the creation of a genuine system of lifelong training.
As far as the combating of early school leaving is concerned, measures have recently been adopted in secondary education. Access to apprenticeship will be made easier through a modular approach to training and financial assistance for apprentices. Employers have substantially increased the number of apprenticeship places on offer, many of which are not taken up (350 places remain unfilled) because of the lack of resident applicants.
Given the high level of inactivity, especially of persons over the age of 50, awareness-raising campaigns have been conducted in order to dissuade people from retiring on an invalidity pension or from taking early retirement. Measures design to improve employment for less employable or disabled persons have also been introduced.
Entrepreneurship: In order to encourage entrepreneurship, Luxembourg has introduced various measures designed to facilitate access to employment, the creation of businesses and the development of venture capital markets, the coordination needed to simplify administrative procedures for enterprises and the adaptation of legislation on business creation. One-stop shops, coaching measures and measures for the allocation of development capital intended for SMEs (start-ups) have been intr oduced. The indirect cost of labour has been made attractive in comparison with neighbouring countries. In the area of taxation and VAT, the Luxembourg rules are also comparatively attractive. As far as policy to promote the setting up of businesses is concerned, tangible results have been produced but it is not yet possible to quantify their impact.
Job creation (+/- 300) in third-sector enterprises or local services is increasing, especially as a result of the introduction of care insurance (since January 1999), an earlier start to schooling (since the beginning of the 1998/99 school year) and measures under the territorial employment pacts.
Adaptability: Under this pillar, the social partners play a crucial role in Luxembourg. Accordingly, matters of working time and the organisation of work are the responsibility of the social partners alone. They also play an important role in the continuing training of workers or enterprise-based training courses for young people or adults.
The recent framework law on continuing vocational training (Law of 22 June 1999) is a major step towards the qualitative adaptation of enterprises and workers. This law introduces tax reductions for enterprise-based training. It is not possible to provide figures on the results because the framework law was introduced only recently.
Furthermore, a reform of the system of training leading to qualifications is already under way for nine occupations, and a modular approach to learning will be available from the start of the 2000/01 academic year. Certain groups of apprentices will receive an income equivalent to the social minimum wage. This reform is all the more important since many young people leave education without qualifications, and the gap between the demands of the economy and the level of training of reside nts continues to have a negative impact on the level of domestic employment.
Equal opportunities: The widespread application of this principle is beginning to have a positive influence on the position of women on the Luxembourg labour market (increase in the employment rate of 1% every year over the past two years), but much still remains to be done. Measures such as parental leave or child care (+ 55% in number of childcare places in three years) help mostly women to reconcile family and working life. These measures are of a structural nature, and create jo bs at the same time. Parental leave has been a real success (1 443 beneficiaries). However, the objective of people rotating in the post "freed up" in this way has yet to be fully achieved (65% of the posts are actually re-filled). The principle of introducing positive discrimination has been accepted. The arrangements for introducing this discrimination provided for by law for the sex underrepresented in a given sector of the economy are being worked out by the social partners and will certainly a lso help to increase the chances of labour market entry or re-entry for women, and thus to close the gap between men and women.
ESF: Under Objective 3, the European Social Fund will support the employment strategy, improve employability, contribute to the prevention of unemployment and help to discourage the oldest workers from entering a passive scheme too early.
Given the lack of agreement on all the measures in the tripartite committee, the Luxembourg Government was unable to submit its draft NAP for 2000 to the Commission. The document submitted is therefore simply an implementation report for 1999.
|
Performance Indicators |
||||||
|
Luxemburg |
||||||
|
Annual data |
||||||
|
Employment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Rate |
61,6 |
60,2 |
59,9 |
59,1 |
62,2 |
59,9 |
|
Males |
74,4 |
74,6 |
74,3 |
74,4 |
71,6 |
69,7 |
|
Females |
48,5 |
45,6 |
45,4 |
43,6 |
52,9 |
50,0 |
|
15-24 |
31,7 |
33,1 |
34,7 |
36,9 |
39,0 |
36,2 |
|
25-54 |
76,7 |
74,7 |
74,4 |
73,2 |
75,6 |
73,4 |
|
55-64 |
26,3 |
25,0 |
23,7 |
22,6 |
36,9 |
35,9 |
|
Full-time eq. Employment rate |
59,0 |
57,9 |
58,2 |
57,3 |
56,8 |
55,0 |
|
Males |
74,5 |
74,8 |
74,9 |
74,5 |
69,7 |
68,6 |
|
Females |
43,4 |
41,1 |
41,3 |
39,9 |
44,2 |
42,3 |
|
Unemployment Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | |
|
Total Unemployment Rate |
2,3 |
2,8 |
2,6 |
3,0 |
9,2 |
10,8 |
|
Males |
1,7 |
2 |
1,8 |
2,2 |
7,9 |
9,6 |
|
Females |
3,3 |
4,2 |
3,8 |
4,3 |
10,8 |
12,4 |
|
Youth Unemployment Ratio |
2,3 |
2,5 |
3,0 |
3,4 |
8,5 |
10,2 |
|
Males |
2,2 |
2,7 |
2,7 |
3,5 |
8,5 |
10,3 |
|
Females |
2,4 |
2,3 |
3,4 |
3,2 |
8,5 |
10,1 |
|
Long-Term Unemployment Rate |
0,8 |
0,9 |
0,9 |
0,8 |
4,2 |
5,3 |
|
Males |
0,7 |
0,7 |
0,7 |
0,7 |
3,5 |
4,5 |
|
Females |
0,9 |
1,1 |
1,3 |
1,1 |
5,0 |
6,2 |
|
Annual change |
Employment related Economic Indicators |
|||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | |
|
Total Employment Growth |
4,9 |
4,4 |
3,3 |
2,7 |
1,4 |
0,7 |
|
Real GDP Growth |
7,5 |
5,0 |
7,3 |
2,9 |
2,4 |
1,6 |
|
Labour Productivity Growth |
2,4 |
0,6 |
3,8 |
0,2 |
1,0 |
1,0 |
|
Real Unit Labour Costs |
-1,0 |
-1,2 |
-3,9 |
0,4 |
0,0 |
-0,5 |
1. General appreciation
The Dutch economy and labour market have been booming since the middle of the nineties. Nevertheless major challenges remain that need to be overcome. The most pressing one is the still large unexploited supply of labour,probably best exemplified by the more than 744.000 persons with invalidity benefits. The present economic climate offers a unique opportunity to raise the employment rates of women and persons over 55. This will help to cope with the future ageing of the population. Other important challenges are the increasing bottlenecks due to economic expansion and the need to harmoniously integrate the many new citizens with a minority ethnic background.
2. Policy-mix
The Netherlands has in its employment and labour market policy mix achieved a reasonable balance between the four pillars of the European Employment Strategy. The emphasis is on increasing effective labour supply through activation and prevention and on measures to make the tax- and benefit system more employment friendly. At the same time the policy continues to focus on wage moderation, flexible labour relations and the modernisation of the organisation of work.
3. Response to the 1999 Council Recommendations
The major tax reform is an important step in meeting the first Council recommendation of 1999, which asked the Dutch to make their tax and benefit system more employment friendly. The tax reform contributes to a reduction in the poverty trap.
Concerning the second recommendation on monitoring the comprehensive approach, there seems to be some progress. A new data processing system is set up, but verification of Guidelines 1, 2 and 3 remains difficult as long as the data of the different operators have not been brought together in one database.
The Netherlands has taken the initiative to expand the comprehensive approach to the more difficult disadvantaged groups who are at particularly distant from the labour market. It seems that the success of this strategy will depend critically on the ability to transform the present rigid social security system into an integrated and well functioning, decentralised, Centre for Work and Income.
4. Challenges ahead
The measures presented in the NAP to tackle the growing number of invalidity benefits may not be commensurate to the magnitude of the problem and will have to be closely monitored. Greater efforts, particularly in the short run, are also required to address the skill gaps and the many difficult to fill vacancies that have emerged.
There are no signs yet of an economic slow down. Real GDP growth increased in 1999 by 3.6 % and is expected to grow at 4 % in 2000. Labour market conditions have constantly improved since 1990 apart from a dip in 1993. The Netherlands is experiencing its longest period of continuous economic growth since WW II.
The employment rate in persons increased from 65.4 % in 1996 to 70.9 % in 1999 which is well above the EU-average. For those older than 55, the employment rate of 35.3 % is slightly below the EU-average. The employment rate in full-time equivalent (FTE) also increased to 56.3% in 1999. The less impressive rise in FTE is due to the widespread use of part-time work. The male (FTE) employment rate is 3.5% point above the EU-average, whereas the FTE female rate is still almost 4.5 % point s below. The FTE gender gap in 1999 stands at 33.5 % points compared to an EU average of 25.5%.
The unemployment rate has continued its decrease in 1999 and is currently at 3.3%. The composition of unemployment is characterised by high shares of low-skilled, older workers and by an over-representation of ethnic minorities. The unemployment rate of ethnic minorities in 1998 was 16% compared to 4% for native Dutch persons. Youth unemployment is below the EU-average at 4.8% in 1999. Total female unemployment at 4.7% is much lower than the EU-average, but it is nevertheless twice as high as the male rate of 2.3%. Long-term unemployment is very low at only 1.3%. The very favourable unemployment picture that emerges from the official statistics above must be qualified. Broad unemployment is still quite high due to the fact that many benefit recipients are not actively looking or available for work. There is also considerable hidden unemployment among the 744.000 persons receiving invalidity benefits.
One of the major problems is the current mismatch on the labour market due to skill shortages. Apparently all sectors of the economy are facing hard to fill vacancies. In 1996 there was one vacancy per hundred workers, now this figure has more than doubled.
Ever since the agreement of Wassenaar in 1982, wage moderation and measures to improve the functioning of the labour market have been the cornerstones of the Dutch employment policy. This policy is achieved through nominal wage moderation and through reductions in income taxes, and if possible employers' social security contributions. The Social Partners, supported by government legislation, have over the years established many agreements relating to training a nd labour market flexibility, starting with the promotion of part-time work and the wide spread use of temporary work agencies.
The Dutch 2000 NAP mentions three themes as the main policy focus for the coming years: i/ A general 'enabling' policy aimed at macro-economic stability and structural reforms to make sure that the labour market keeps pace with economic development, ii/ The stimulation of effective labour supply to keep wage cost under control and to meet present labour shortages and iii/ The limiting of the present inflow into and the encouragement of the outflow from the invalidity benefit schemes.
The 2000 NAP presents a concise but comprehensive presentation of how the Dutch policy mix is balanced between the four pillars. The main emphasis is clearly on increasing and maintaining labour supply through activation and prevention. The comprehensive approach of the employability pillar appears to be making progress. The exact situation for GL 2 is difficult to evaluate due to incomplete quantitative monitoring. It is questionable if the measures in the NAP are a sufficient short run response to the recent rise in labour shortages. The announced reform of the social security system was long overdue. Its success will depend crucially on the possibility to streamline the various implementing bodies, who each have their own objectives, into one single well functioning Centre for Work and Income.
Employability: In 1999 the Council already acknowledged that the Netherlands complies with GL 1. By law the non-compliance rate should be put at zero, although empirical evidence is not available in the NAP. In the case of GL 2 the non-compliance indicator rate is set at a surprisingly high 63%. This result is incomplete as it is based only on Employment Service data registers, it does not contain data from the unemployment benefit agency (LISV) nor from t he municipalities. The Dutch strive for compliance in full by the end of 2002. The activation effort indicator of GL 3 in 1999 is estimated at 34%.
The government, together with the social partners, has formulated as a "lifelong-learning" policy target to equal the performance of the top two MS's. The apprenticeship scheme is to be transformed into a 'training on the job' system. Employability is further promoted by a quality award for investing in people, by a skills validation system and by a pilot system of individual learning accounts based on UK experience. Average class size are to b e reduced and a campaign has started to make the teaching profession more attractive. Early school leaving is attacked with the Regional Registration System Act, supported with a budget of 27 million Euro.
Special reintegration efforts were made on behalf of 82.000 disabled persons, to date 10.700 have been placed in paid employment. A taskforce will evaluate the new Act to Encourage Labour Force Participation of Ethnic Minorities (SAMEN). The SMEs in association with the government and the Employment Service, have started a programme to place 20.000 persons with an ethnic background in paid jobs.
Entrepreneurship: An external body is reviewing all current procedures and regulations with the aim to reduce by 15% in 2000 the administrative cost of running a business. The government intends to tackle obstacles to entrepreneurship by revoking superfluous business requirements, by promoting risk capital for SMEs, by amending the Bankruptcy Act and by introducing a business training programme for young people. Furthermore the highly successful Market Forces, Deregulation and Legis lative Quality Project (MDW) will continue. Under the new tax system for the 21st century tax rates on labour are reduced, i.e. ranging from 0.6 % points for the first bracket to 8 % points for the third and fourth bracket. There are special tax advantages for working parents and for environmental protection. The VLM/SPAK (wage-cost subsidy) scheme, which was introduced a few years ago provides employers with a tax rebate if they hire long term unemployed people or employ workers earni ng up to 115% of the minimum wage. The scheme is estimated to have generated almost 60.000 additional private sector jobs. The average wedge for a minimum wage has been reduced from 29% in 1990 to 15% in 1999. Additionally tax incentives of 4436 Euro are given to employers to promote the "on the job" training of LTU. The Netherlands has started experiments with lower VAT rates in labour intensive sectors.
Adaptability: The Adjustment of Working Hours Act, which will come into force in July, gives workers statutory rights so that part-time workers can expand up to full-time or the reverse. The dual dismissal procedure is under review, the aim is to accommodate employers without sacrificing individual worker rights.
Equal Opportunities: In order to redress the gender gap, the Dutch want to raise the female employment rate to a level as close as possible to 70% by 2010. An Equal Pay Monitor was launched in 1999 to better detect sex-based discrimination. The government has prepared the new Work and Care Act which combines various leave schemes. The new act entitles both parents to three weeks of paid maternity leave, and up to 10 days of care leave per year paid at 70%, half of the employer's co st is reimbursed. The new Leave-Saving will make it possible to save up to 10% of one's income for a sabbatical period.
The number of childcare places has almost doubled. The 89,000 places that existed in 1998 are enhanced with an additional 71.000 places. The Government has made 68 million Euro available to expand childcare tax relief. A special childcare budget of 56 million Euro is made available for single parents. So far 2700 new subsidised childcare jobs have been created. In 55% of all collective wage agreements specific childcare provisions have been included. Childcare cost can be reimbursed as part of a reintegration pathway.
The Social Partners have been consulted during the drafting of the NAP. The social partners have a first responsibility for lifelong learning through the sector training funds and they are also directly involved in solving the sector bottlenecks that arise due to skills shortages.
The ESF contribution for the new period is fully used to speed up the implementation of the NAP. A special effort is made to reinforce GL 2 and the comprehensive approach.
The 1999 Council recommendations on the implementation of Dutch employment policies
(1) Continue efforts to improve the tax benefit system with a view to removing disincentives which may discourage participation in employment, in particular of older workers and women. Resolute efforts are needed to reduce the high number of persons who remain outside the labour market depending on passive income support;
(2) Pursue efforts to upgrade the statistical monitoring system so that policy indicator on prevention and activation will be published by 2000 in accordance with agreed definitions and methods.
Concerning the efforts to remove disincentives in the tax and benefit system, the Dutch government is pursuing a four-pronged tax reform policy, which represents a significant step forward to meet the first Council recommendation. The first is the tax reform which among other things will reduce the poverty trap through tax credits which increase net income at the lower end of the pay scale by 2-3%. At the same time the tax allowance of inac tive persons is abolished which
increases the difference between income and benefit by 540 Euro. Second, there is social security reform recently approved in Parliament. The structure and implementation will be more integrated and transparent following the one stop shop approach. Public funds are channelled to a separate private market for reintegration in order to improve effectiveness and efficiency. The third is to
promote the participation of older workers by making working at an older age possible and attractive again. Compulsory early retirement is to be avoided and replaced by voluntary retirement at the individuals own expense. The outflow from employment is curbed by ending the present favourable tax treatment for early retirement schemes. The inflow is encouraged through tax reductions, The government is considering an abolishment of the exemptions for older unemployed people to app ly for a job. Fourth, the participation of women is supported by doubling the number of childcare places, through the Work and Care act and the Working Hours (Adjustment) Act and via the tax reform. The government is also reviewing the favourable treatment of breadwinners in the tax and social security system.
Regarding the large number of persons receiving invalidity benefit it seems that the problem lies mainly in entry conditions that are too lenient. Although the NAP announces various measures to limit this inflow their effectiveness can only be evaluated in a few years time. Their success will depend critically on the possibility to impose more stringent conditions of entry.
With respect to the second recommendation about the need to improve the monitoring of the comprehensive approach, an extra effort is needed to get harmonised information from the three different implementing bodies i.e. the municipalities, the LISV and the Employment Service, responsible for supplying information on the inflow into unemployment and on the outcomes of the reintegration pathways. So far only one, the Employment Service, has a monitoring system in place. Moreover 5 00 municipalities were until now unable to provide information on this subject. At the moment the government has started together with Association of Municipalities (VNG) a pilot with the 25 largest municipalities (G25) to arrive at a common system. The first usable data should be available in the first quarter of 2002. For the unemployment benefit agency (LISV) the first results are expected in the third quarter of 2001.
Regarding the implementation of the GL's 2000, the parliament has now approved the Cooperation in the Implementation of Work and Income Act (SUWI) concerning the reform of the PES. The five existing benefit bodies are merged into one public body responsible for implementing employee insurance schemes. Local Centres for Work and Income will take over the advisory function of the Employment Service. Social Partners and local authorities are represe nted in a national Work and Income Council. In the employability pillar, the main new initiative is the extension of the comprehensive approach to the current stock of unemployed, without jeopardising the implementation of GL 2. Additional funds will be made available to provide for as many pathways as needed. Practically all collective wage agreements now have special employability measures. On the job training is offered to unemployed people and to subsidised workers. Experiments with the Unem ployment Insurance Act allow for training without the loss of benefits. In April an Invalidity Benefit Action Plan was submitted to Parliament to curb the increase in invalidity benefits. In line with the Lisbon summit, the government has pledged to connect all schools to the internet by 2001, which is one year earlier than was announced in 1999. Under the entrepreneurship pillar local development is strengthened by giving the Employment Service a special budget for projects that reduce loc al mismatches. The adaptability pillar is addressed by the ever increasing number of collective wage agreements that have provisions for the training of workers. Equal Opportunity has received attention via the new Equal Rights Monitor. This monitor promotes gender mainstreaming and pays also special attention to ethnic origin.
|
Performance Indicators |
|||||||
|
Netherlands |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
70,9 |
69,4 |
67,5 |
65,4 |
62,2 |
59,9 | |
|
Males |
80,3 |
79,6 |
77,9 |
75,7 |
71,6 |
69,7 | |
|
Females |
61,3 |
58,9 |
56,9 |
54,8 |
52,9 |
50,0 | |
|
15-24 |
62,7 |
60,3 |
56,9 |
54,1 |
39,0 |
36,2 | |
|
25-54 |
80,6 |
79,3 |
77,8 |
75,8 |
75,6 |
73,4 | |
|
55-64 |
35,3 |
33,0 |
31,4 |
30,0 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
56,3 |
55,2 |
53,7 |
51,8 |
56,8 |
55,0 | |
|
Males |
73,2 |
72,4 |
71,1 |
69,2 |
69,7 |
68,6 | |
|
Females |
39,7 |
38,1 |
36,4 |
34,4 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
3,3 |
4,0 |
5,2 |
6,3 |
9,2 |
10,8 | |
|
Males |
2,3 |
3,1 |
3,9 |
5 |
7,9 |
9,6 | |
|
Females |
4,7 |
5,3 |
7,0 |
8,1 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
4,8 |
5,3 |
6,1 |
7,3 |
8,5 |
10,2 | |
|
Males |
3,3 |
5,2 |
5,3 |
7,0 |
8,5 |
10,3 | |
|
Females |
6,3 |
5,4 |
6,8 |
7,7 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
1,3 |
1,9 |
2,6 |
3,1 |
4,2 |
5,3 | |
|
Males |
0,9 |
1,6 |
2,0 |
2,7 |
3,5 |
4,5 | |
|
Females |
1,7 |
2,4 |
3,4 |
3,8 |
5,4 |
6,2 | |
|
Annual change |
|||||||
|
Employment related Economic Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
2,5 |
2,5 |
3,1 |
2,3 |
1,4 |
0,7 | |
|
Real GDP Growth |
3,6 |
3,7 |
3,8 |
3,0 |
241 |
1,6 | |
|
Labour Productivity Growth |
0,9 |
1,0 |
1,0 |
0,5 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
0,8 |
-0,4 |
-0,9 |
-0,2 |
0,0 |
-0,5 | |
General appreciation: In comparison with most Member States, the Austrian labour market results are quite satisfying. The situation improved during 1999. Both the favourable economic situation and ALMP contributed to the increase in employment and the decrease in unemployment. But the key challenges in the labour market - low participation of older workers in employment, the significant gender gap in employment and the higher-than-average tax share o n labour - remain unchanged.
Policy Mix: The medium-term strategy concentrating on employability continues to be implemented with some modifications. Activation and prevention measures were extended significantly, the 'safety net' for apprenticeship-seekers addressed the unemployment of disadvantaged youth with some success and the gender mainstreaming approach in the employability pillar has now more transparent objectives.
Response to Recommendations: There has been a limited response to the Council Recommendations. The measures put in place to encourage older workers to stay longer in work have not had the desired results. Unemployment in the age group 55 years and over remains high. In order to reduce the gender gap and to reach the Lisbon targets of increasing the female employment rate, more efforts are needed concerning the expansion of childcare facilities for children under 3 yea rs and of the home services for elderly people. The problem of the high gender pay gap has to be addressed. The announced gradual reduction in non-wage labour costs of about 0.4% of GDP in 2003 can be considered as a modest step forward to bring down the high tax burden on labour.
Challenges ahead: Future bottlenecks and skill gaps in the labour market need to be avoided by harnessing the potentials of new technology. Life-long learning should be further promoted by concerted efforts from those responsible for research and education and the social partners to anticipate demand. New ant-discrimination measures need to be promoted for migrant workers. Incentives within the unemployment insurance system or flexible working time models could contribute to reduci ng seasonal unemployment.
1. Economic and Employment Situation
In 1999, GDP growth in Austria amounted to 2.1%. After a phase of sluggish activity in the wake of the Asian crises, the economy recovered and the cyclical upswing gained momentum in the course of the year. Productivity growth slowed down to 0.7% percent.
The performance of the Austrian labour market improved in the last year. Employment grew by 1 % in 1999 and the employment rate increased from 67.4 % in 1998 to 68.2 % in 1999. The full-time equivalent employment rate for men was 75.4 %, for women 50.8 %. Employment gains were translated into a decline of the unemployment rate, which was reduced from 4.7 % in 1998 to 3.8 % in 1999. The register based unemployment rate in Vienna was one fifth above th e Austrian average, and approximately half of all long-term unemployment was registered in Vienna. By contrast, Upper Austria and Salzburg reached almost full employment.
Besides the favourable economic situation (vacancies increased considerably), the significant expansion of the funds available for ALMP contributed to this positive outcome. Although female unemployment was still above male unemployment (4.5 % to 3.3 %), the gender gap in the unemployment rate was reduced slightly. With the exception of Luxembourg, Austria had the lowest youth unemployment ratio (2.9 %), and the long-term unemployment rate (1.2 %) remained one of the lowe st in the EU and was slightly decreasing. However, the recovery of the labour market for people over the age of 54 was well below that for younger persons.
The positive economic situation has enabled Austria to reach, in 1999, the national targets originally set for 2002 of increasing the proportion of people in ALMP measures to at least 20% and, in 2000, of creating 100.000 new jobs.. The Austrian policy mix focuses on employability, on developing entrepreneurial potentials, on opening up innovative employment resources and on equal opportunities for women and men. These objectives are to be realised through a co mprehensive and coordinated strategy of employment policy. The mainstreaming of the concept of the Territorial Employment Pacts into all Länder is improving the dissemination of good practice in job creation on regional and local level.
In 1999, the NAP contributed significantly to the improvement of the Austrian labour market performance through a balanced policy mix. In particular, the greater emphasis on active labour market policy has helped to reduce the number of the unemployed as well as the inflow into LTU..
The fight against youth unemployment met with some success. The safety net for young people, providing opportunities for disadvantaged youths to find apprenticeship training, was an important measure as it put emphasis on this group. Under the 1999 NAP, a policy package for older people was worked out that came into force on 1 January 2000 with the aim of increasing the employment rate of older workers. Within the entrepreneurship pillar, there has been a certain progress in initiating administrative reforms. The NAP process gave rise to a broad debate on a variety of obstacles to fostering entrepreneurship. As in the last two years, the social partners did not make much progress on modernising the organisational framework of work. Some efforts were put into strengthening equal opportunities for women and men by facilitating the return to the labour market after a longer break.
Employability: Austria is implementing preventative and active policies very satisfactorily. The flow into LTU is amongst the lowest in the EU. The share of participants in active measures was increased significantly by 5.6 percentage points and as a result Austria is complying for the first time with the 20% common target. Almost half of the increase was due to a significant expansion of a training programme on job search training (due to be cut back i n 2000). The regional differences in activation are still very high and range from only 15.9% in Vienna (despite the increase in activation in this region) to 33.1% in Upper Austria.
Older workers became the central target group of the PES. However, there are still no attractive measures that represent an alternative for older (lower qualified) workers who have already reached early retirement age. A 62 M{{X80}} programme co-financed jobs for more than 15.000 long-term unemployed people and older persons. For young people, the safety net was quite successful as it reduced the strain on the apprenticeship market on a short-term basis.
Two innovative qualification measures concentrating on the ICT bottleneck were implemented in 1999. In total, 6.300 participants were trained, though first results show they had difficulties in integrating into the labour market. Consequently, an improved version of this measure has been designed.
Concerning lifelong learning, early school leavers were offered some opportunities to complete compulsory education at a later stage. In total, 600 persons participated in such courses (3.6 M{{X80}}). Efforts for the provision of a second chance need to be increased to reach the medium-term national targets on the reduction of the share of low qualified young people.
The situation of disabled persons on the labour market improved in 1999, but this group did not profit from the economic upswing to the same extent as other groups. Though expenses for ALMP for disabled persons have been increased considerably during the last year, more efforts for an effective integration of the disability dimension in all ALMP have to be undertaken.
For ethnic minorities and migrant workers, the NAP 1999 did not provide any additional measures.
Entrepreneurship: Austria has adopted a tax reform (Steuerreform 2000) which simplifies the taxation regime for small businesses, facilitates business transfers and removes several administrative fees for businesses. The reform particularly addresses SMEs and start-ups. It includes the introduction of special favourable conditions for new businesses, which profit fromf a certain reduction fo non-wage labour costs. Apart from the innovative programme NEWSTART, a few initiatives were taken to meet the target of creating new jobs in the social and health care sector.
Adaptability: New working time models contributed to the decrease of seasonal unemployment in the construction industry, but this problem has not yet been tackled either in the other seasonal branches such as tourism or in the regions concerned. Take-up of other flexible working time models, such as the educational leave scheme (Bildungskarenz) or the solidarity bonus model which links flexible working time with the recruitment of unemployed persons in 1999 was rather low.
Only limited progress was made on the dissemination of new occupational profiles and new certification regulations. For instance, the Länder developed new occupational profiles and new training programmes for home help services for elderly people, but the certificates are not recognised by the other Länder. Moreover, for this fast growing branch, specific collective agreements still have to be reached in order to attain attractive working conditions and assure high quality sta ndards of the services delivered.
Equal Opportunities: In 1999, the targets of the guidelines 1-3 were changed into more equal opportunities specific performance targets. 10.000 childcare places were created under a special programme that ends in spring 2000. This represents a limited progress in providing more and better childcare facilities. Efforts to create more facilities better adapted to the needs of working parents should be sustained. In 1999, the share of unemployed women with mobility restrictions (most ly due to childcare) was, after a rise in 1998, back to the 1997 level. The concept of gender mainstreaming was well implemented under pillar I, but there were no new initiatives under the other pillars.
Social Partners: In contrast to previous years, the Social Partners' involvement has decreased. This year they were only consulted on the draft NAP as were other federal and regional authorities.
ESF and the Structural Funds: The NAP strategy was underpinned by the main objectives of the ESF programmes, particularly as regards the guidelines 1-3, 6, 9, 12 and pillar IV. In 1999, 124 M{{X80}} ESF and 262 M{{X80}} of total public funds were spent on measures of the ESF programme. In 1999, the priorities of the European Employment Strategy coincided with the target groups of the Austrian ESF programmes: Specific groups needing assistance for their integration into the labour ma young persons, older people, disabled and long-term unemployed persons are target groups in the NAP as well as in the ESF. Within objective 4, skills training for workers is aimed at preventing unemployment. The data for the first half of 1999 indicate that 48% of all participants were female. For the new programming period 2000-2006, the objectives of the NAP and the ESF have also been harmonised. The ESF will concentrate on preventive measures to combat unemployment of adults and youth and on policie s for disabled persons. A focus on lifelong learning has been introduced under the new objective 3, and the gender mainstreaming approach will be pushed forward.
The 1999 Council recommendations on the implementation of Austria's employment policies. Austria should:
(1) Review early retirement incentives and develop flexible working time schemes, so as to keep older people longer in working life;
(2) Pursue a comprehensive strategy to narrow the gender gap in employment, inter alia by putting in place measures, which facilitate the reconciliation of work and family life;
(3) Continue efforts to reduce the high tax burden on labour, in particular by focusing on problem groups in the labour market.
Regarding the recommendation on the participation of older workers in employment, a "policy package for older workers" has been worked out focusing on flexible working models. This includes part-time work arrangements and unemployment insurance contribution incentives. First results from the year 2000 indicate that the take-up of these part-time work models is low. A higher participation of older workers in active employment is not foreseeable in the ne ar future. New initiatives need to be taken to activate the older workers to stay in the labour market.
The recommendation on narrowing the gender gap in employment and facilitating the reconciliation of work and family has been taken into consideration by a number of largely motivational and 'soft' measures. The provision of childcare facilities for parents working unusual hours and for children under 3 and furthermore assistance for people with care obligations need to be set as quantified targets.
The recommendation on reducing the tax burden on labour with specific attention to the problem groups on the labour market has been partially addressed by the 2000 tax reform, which brought measures supporting the employment of apprentices, special assistance of young entrepreneurs and support of in-house training. The labour costs were lowered only for apprentices. By 2003, it is planned to reduce the non-wage labour costs by 0.9 b{{X80}} (0.4% of GDP). In the light of the cont high tax rate on employed labour, the impact of such reforms needs to be closely monitored.
Under employability, the government set the target of raising the proportion of low-skilled workers in skills training to the level of participants with medium-level qualifications. However, no additional measures to attain this goal have been planned for 2000. The option to complete compulsory education later was already mapped out in 1998 and extended in 1999 on a small scale. With the help of the new ESF objective 3 programme, this important target w ill be reinforced for 2000, covering approximately 850 participants. It is planned to provide all Austrian schools with an access to the World Wide Web by 2002. However, due to current budget restrictions, the financial means for this initiative have not yet been allocated.
No new provisions under GL 9 have been made to improve the situation of migrant workers, who are among the most disadvantaged groups on the Austrian labour market. Austria should promote training measures adapted to the needs of the migrants, in particular for women and for the second or third generation.
In the NAP 2000, measures are planned to strengthen the venture capital sector, to reform the social security system and the administrative system as well as to improve e-commerce vis-à-vis market requirements. Measures discussed for several years (one-stop-shops, liberalisation of regulations) are also listed in the NAP 2000. The NAP 2000 mentions a new priority for the creation of new jobs in the social and care sector, using territorial employment pacts and initiatives under t he new ESF objective 3. No additional steps are planned for defining new outlines of professions, and the employment potential of the Austrian care regulations were not fully exploited. Administrative obstacles, e.g. the validity of certifications across the borders of the Länder demonstrate that many barriers still remain in these areas. In addition, collective agreements and a further exploration of the employment potentials in the emerging new service sectors, especially the health care sector, should be envisaged. These new challenges require an innovative approach from the social partners.
The NAP 2000 points to the importance of raising the labour market participation of women and reducing female unemployment with a special focus on the reconciliation of work and family life. Simultaneously, the government is discussing new policies that may even lead to a more traditional division of labour by implementing a longer parental leave with higher childcare subsidies. In the long run, such policies may counteract the target of integrating more women into the labour market.
|
Performance Indicators |
|||||||
|
Austria |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
68,2 |
67,4 |
67,2 |
67,3 |
62,2 |
59,9 | |
|
Males |
76,7 |
75,9 |
75,9 |
76,1 |
71,6 |
69,7 | |
|
Females |
59,7 |
59,0 |
58,5 |
58,6 |
52,9 |
50,0 | |
|
15-24 |
54,9 |
54,2 |
54,0 |
55,5 |
39,0 |
36,2 | |
|
25-54 |
81,3 |
80,4 |
79,9 |
79,3 |
75,6 |
73,4 | |
|
55-64 |
29,2 |
28,0 |
28,5 |
29,4 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
63,0 |
62,7 |
62,8 |
62,9 |
56,8 |
55,0 | |
|
Males |
75,4 |
74,6 |
74,7 |
74,9 |
69,7 |
68,6 | |
|
Females |
50,8 |
50,9 |
50,9 |
51,0 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
3,8 |
4,5 |
4,4 |
4,3 |
9,2 |
10,8 | |
|
Males |
3,3 |
3,8 |
3,6 |
3,6 |
7,9 |
9,6 | |
|
Females |
4,5 |
546 |
5,3 |
5,3 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
2,9 |
3,9 |
3,9 |
3,7 |
8,5 |
10,2 | |
|
Males |
2,3 |
3,2 |
3,4 |
3,2 |
8,5 |
10,3 | |
|
Females |
3,5 |
4,5 |
4,4 |
4,2 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
1,2 |
1,4 |
1,3 |
1,2 |
4,2 |
5,3 | |
|
Males |
0,9 |
1,1 |
1,0 |
0,9 |
3,5 |
4,5 | |
|
Females |
1,6 |
1,8 |
1,6 |
1,5 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
1,4 |
0,9 |
0,5 |
-0,6 |
1,4 |
0,7 | |
|
Real GDP Growth |
2,1 |
2,9 |
1,2 |
2,0 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
0,7 |
1,9 |
0,7 |
2,6 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
0,6 |
0,3 |
-1,6 |
-2,7 |
0,0 |
-0,5 | |
General appreciation In 1999, the Portuguese economy has continued to grow at a greater rate than the EU average. Both the employment and the unemployment rates registered a better performance than the EU average, particularly for women and long-term unemployed. However, the skills level of the workforce still suffers from high levels of drop out in secondary education, low levels of formal education and low levels of participation in continuous train ing. This goes along with low productivity levels and a need for modernisation of work organisation. The service sector is under-developed with a significant potential for the creation and up-grading of jobs.
Policy-mix The main challenge for Portugal is to make it compatible to continue structural changes and the modernisation of the economy while maintaining the good employment performance. The national strategy for 2000 follows a path of continuity with the 1999 NAP although stronger attention is now devoted to lifelong learning, which is consistent with the need to increase the level of qualifications of the labour force.
Response to the 1999 Council Recommendations The NAP addresses the 1999 recommendations but with a greater emphasis on the education sector, the training system and the introduction of new technologies. The main weaknesses of the education system are addressed but a comprehensive lifelong learning policy should be further developed. There is still no clear strategy of development of the service sector. Faced with difficulties in social dialogue, the government and social partners h ave agreed upon a new and pragmatic methodology for the partnership on adaptability.
Challenges ahead Efforts should continue as part of a long-term strategy of structural reform with a strong focus on improving the quality of both the supply and the demand of the labour force. This implies the development of livelong learning and the improvement of the education sector in parallel with the evolution towards a more high-skilled productive system.
In 1999, the Portuguese economy continued to grow at a greater rate than the EU-average even if the pace was slower than in 1999 (2.9% growth compared to 3.5% in 1998). The employment and unemployment situation has continued to improve.
The employment rate has globally improved (from 66.5% in 1998 to 67.4% in 1999) with a particularly strong increase for women (from 57.9% to 59.4%) and temporary workers. The gender gap has diminished also in unemployment rates where the positive performance (4.9% to 4.5%) is completely due to the better situation of women (6.1% to 5.2%). Long-term unemployment has decreased (2.3% to 1.7%), which is a faster rate than total unemployment. The situation of all groups except older men imp roved.
Nevertheless, this good employment performance continues to hide structural weaknesses related to low participation in education and training, low productivity levels and unbalanced employment distribution by sectors. Labour force participation in the service sector has also increased mainly due to the growth of low-skilled jobs (particularly in commerce and health, social and personal services) and, to a lesser extent, of high-skilled jobs.
The national strategy is to stabilise and reinforce the effectiveness of the current employment policies. Therefore, the strategic objectives follow a path of continuity with the 1999 NAP within the wider objective of maintaining the employment rate over 70% and the unemployment rate under 5%. These objectives have to be seen in the light of national indicators, which were 71.5% and 4.5% in 1999. The global strategy does not therefore aim at increasing the emp loyment rate but rather at maintaining it while pursuing the modernisation of the economy.
All pillars are addressed and as in the previous NAP there is a clear focus on the first pillar. Under employability, the priorities are prevention, early intervention and effective integration of those more exposed to the risk of long term unemployment. Lifelong learning will be further promoted, particularly in the field of new technologies, which is consistent with the need to increase the level of qualification of the labour force.
Entrepreneurship is to be fostered particularly in the service sector and at the local level. Equal opportunities are to be ensured by the gender mainstreaming approach.
The overall strategy is to be assessed against a framework of difficult collective bargaining.
As compared to last year's budget, the NAP 2000 presents a consistent and considerable shift of resources from active measures offered to unemployed (particularly GL 1) to lifelong learning (GL 6). Early intervention measures will be developed at regional level.
1999 has been a year of consolidation of the Portuguese employment strategy outlined in the 1998 NAP. Efforts have been concentrated on Pillar I and particularly on measures aimed at the unemployed: the territorial coverage of the employment networks has reached {{SPA}} as foreseen {{SPA}} 75% of the population. Most of the quantitative objectives have been met or exceeded. There has been a noteworthy improvement of indicators. Given the positive economic and performance as well as the quantitative success of the activation policies, efforts should now be focused on qualitative objectives.
Some weaker features appear though: the PES are confronted with a low level of turn-up of unemployed; inflow into LTU remains high; the planned budget for 1999 has been under-spent (but the financial data is still provisional), no information is given on fiscal measures and their effectiveness. Social dialogue has made little progress.
On employability, the programmes dealing with young (INSERJOVEM - GL 1) and adult unemployed (REAGE {{SPA}} GL 2) continue to produce significant results. The territorial coverage of both initiatives has been widened and 18,7% of young and 21,2% of adults had not been offered an active measure before, respectively, 6 and 12 months of unemployment. Assessment of these relatively low rates of non-compliance (one of the best performances among Member States l take into account that many unemployed do not answer the PES call. Turn-up rates are indeed worryingly low: 52% of the young and 43% of the adults do not come to the interviews offered by the PES. A study on this problem is being carried out. There is also a lack of information about the type of measures offered to ensure the most efficient integration. Globally, 18,8% of the registered unemployed received an active measure in 1999 (GL 3). However, some measures seem to be under-evaluated. The 20% o bjective is set to be reached by 2002.
A national agency for the education and training of adults has been created but is still at a very early stage. The number of employed in continuous training under the Pessoa programme has increased by 60% as compared to 1998 (GL 6). The number of apprentices (at 31%) has also greatly improved beyond expectations (GL 8).
As for entrepreneurship, it has been made easier to start business with an average delay of 14-26 days compared to 5-6 months as a result of the further development of the Network of Business Formalities Centres. However, these initiatives only partially cover the registering and licensing of a company. Measures have been taken to fight bogus self-employment (workers disguised as sub-contractors) with a subsequent fall in the self-employment rate, and informal employment.
A legal effort has been carried out in order to foster adaptability with laws adopted in the fields of part-time employment, temporary work and night work. The legal framework for employees (wages, dismissal) has been amended. In 1999, about 140,000 employees have benefited from training co-financed by the ESF.
Equal opportunities are addressed through the mainstreaming approach. Indicators have been developed to monitor it but they will be applied only in 2000. The coverage rate of pre-school education (3 to 5 years of age) has increased to 65% (from 62.6% in 1998) and reached 323,000 children.
Social partners have participated in the assessment and revision of the NAP but there were considerable problems in the collective bargaining process as a whole.
Most of the measures executed in the 1999 NAP were co-financed by the ESF. Guidelines 1, 2 and 6, representing more than 90% of the planned budgetary effort (excluding fiscal rebates), were co-financed up to an average of 63%. This strong link between the NAP and the ESF will be maintained in the 2000-2006 period. For 2000, the ESF is expected to co-finance these three guidelines up to an average 73% of the public expense, with a special effort on continuous training.
The 1999 Council recommendations on the implementation of Portugal's employment policies
(1) Pursue efforts to improve the quality of the education system, and to strengthen support for continuous training, in particular by involving social partners more actively;
(2) Adopt and implement coherent strategies, encompassing regulatory, fiscal and other measures, in order to reduce the administrative burden on companies, to stimulate entrepreneurship and to exploit the job creation potential of the service sector;
(3) Encourage a partnership approach and promote concrete commitments by the social partners at all appropriate levels on the modernisation of work organisation, with the aim of making undertakings more productive and competitive while achieving the required balance between flexibility and security.
In order to improve the quality of the education system, the plan lays down several measures aimed at reducing early school-leaving and at strengthening the content in new technologies. Notably, the special education action zones will be developed, alternative curricula will be offered to pupils with learning difficulties, special combined education and training courses will be made available to early school-leavers entering the labour market. The number of pupils in professional training should increase by 10% compared to 1997. An increase of up to 40% of pupils in new technologies is also planned with special attention to equal opportunities. It is also stated that the reform of the secondary education will be carried out by 2002. The efficiency of these measures will need to be closely monitored taking into account an early school-leaving rate of 45% in 1999.
The national target of reaching a 10% rate of participation of employees in training actions is being pursued untill 2002 and it has been made more ambitious by adding a supplementary target according to which half of these actions should have new ICT content. Further attention should be devoted to the adequacy and the anticipation of labour market needs. A medium term agreement on Employment, Labour Market and Training is being negotiated with the social partners. This translat es into a considerable budget increase for GL6.
This set of initiatives appears as a response to some of the main deficiencies of the system but should be presented in a context of a long-term strategy for lifelong learning.
The initiatives aimed at reducing the administrative burden on companies will continue, particularly in the area of social security. However, incomplete information is given on the present situation. The lack of information also hampers the assessment of the financial support given to new enterprises (financial schemes, fiscal measures). A large number of initiatives for the service sector (notably in the fields of new technologies, tourism and environment) are announced but they don't allow for a clear picture of the strategy adopted.
To overcome the blocking of the social dialogue, the government proposed a new working approach to the social partners with the objective of settling medium term agreements on sector themes such as training, work organisation, social protection, working conditions. All partners were committed to this approach and reports should be issued this year.
Furthermore, other initiatives of the NAP 2000 show the willingness to increase efficiency of the overall employment strategy by a stronger focus on lifelong learning and local development, as recommended by the Guidelines 2000. Particular attention is devoted to new technologies in education and training, in line with the Lisbon Summit conclusions.
Under the employability pillar, the full territorial coverage of the Regional Employment Networks will be completed in 2000. Learning issues are further emphasised with new quantitative {{SPA}} but not qualitative -targets (GL 8).
Computer literacy will also be emphasised with new curricula and multimedia products. The programme Internet in Schools will ensure that by 2002 all Portuguese schools (primary and secondary) are connected to the internet, with a strong support of the structural funds. This will be done through the Science, Technology and Society Network that will link the schools also to public libraries, teacher training centres and cultural associations.
In order to develop entrepreneurship at local level, territorial Pacts will be further extended and foster partnerships at local level. The objective is to create 5000 jobs per year at local level thanks to micro-initiatives.
As for equal opportunities, Portugal has clearly identified its weaknesses in particular in the field of labour market horizontal segregation. Nevertheless, few new positive actions are planned the most important being the development of the pre-school network that will reach full coverage by 2006.
|
Performance Indicators |
|||||||
|
Portugal |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
67,4 |
66,5 |
63,5 |
62,3 |
62,2 |
59,9 | |
|
Males |
75,8 |
75,6 |
71,8 |
71,0 |
71,6 |
69,7 | |
|
Females |
59,4 |
57,9 |
55,7 |
54,2 |
52,9 |
50,0 | |
|
15-24 |
43,7 |
43,1 |
38,0 |
35,1 |
39,0 |
36,2 | |
|
25-54 |
80,8 |
80,1 |
78,5 |
78,2 |
75,6 |
73,4 | |
|
55-64 |
50,7 |
50,0 |
47,5 |
46,3 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
64,6 |
63,8 |
61,4 |
60,7 |
56,8 |
55,0 | |
|
Males |
74,2 |
74,3 |
71,2 |
70,4 |
69,7 |
68,6 | |
|
Females |
55,5 |
54,0 |
52,5 |
51,8 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
4,5 |
4,9 |
6,8 |
7,3 |
9,2 |
10,8 | |
|
Males |
3,9 |
3,9 |
6 |
6,5 |
7,9 |
9,6 | |
|
Females |
5,2 |
6,1 |
7,7 |
8,3 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
4,3 |
5,1 |
6,7 |
7,2 |
8,5 |
10,2 | |
|
Males |
3,7 |
4,3 |
5,8 |
6,8 |
8,5 |
10,3 | |
|
Females |
4,9 |
5,9 |
7,5 |
7,6 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
1,7 |
2,3 |
3,6 |
3,9 |
4,2 |
5,3 | |
|
Males |
1,5 |
1,8 |
3,1 |
3,4 |
3,2 |
4,5 | |
|
Females |
2,0 |
3,0 |
4,3 |
4,6 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
1,8 |
2,6 |
1,8 |
1,6 |
1,4 |
0,7 | |
|
Real GDP Growth |
2,9 |
3,5 |
3,7 |
3,6 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
1,1 |
0,8 |
1,9 |
2,0 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
1,0 |
-1,1 |
-1,2 |
-0,4 |
0,0 |
-0,5 | |
General appreciation The labour market situation is characterised simultaneously by a higher than EU-average economic growth and employment rate. It also has a higher than average unemployment rate. Also the tax burden on labour is high in Finland. Employment is higher than EU-average, but the participation of older age groups is low and the labour market is strongly segregated. The structural unemployment has become a persistent problem threatening ageing LTU people with exclusion.
Policy-mix The aim of the national employment strategy is to raise the employment rate to 70% by 2003. This seems realistic, provided that favourable economic development continues and that the social partner support is sustained. Emphasis is put on ensuring the supply of labour and well-functioning labour markets by investing in skills development and public employment services. Reinforcing entrepreneurship, improving the adaptability of organisations as well as alleviating segreg ation are closely linked to the knowledge-based growth strategy. An effort is made to reduce taxes on labour.
Response to the 1999 Council Recommendations Finland responded to the recommendations by introducing incentives and disincentives for the employees and employers to keep the older workers longer in active life. Several measures have been put in place to support active ageing, including raising the limit for early retirement pensions, but making it possible to go earlier to a part-time pension. Finland has continued to reduce the tax burden on labour. Steps were taken in 1999, and f urther steps announced for 2000 and 2001. However, further progress is still needed. Gender segregation in the labour market is a difficult problem with important social and labour market implications. To desegregate the labour markets the NAP introduces a major initiative "Equal Labour Markets", where the social partners play a key role.
Challenges ahead include further efforts to reduce structural unemployment. In addition, Finland may, in a decade, face serious problems in the availability of labour, not only in the IT-branches, but also in services at various skill levels, if no strong measures are taken to secure the availability of skilled labour. There is a considerable pool of resources to be mobilised in the LTU-reserve, bearing in mind that bottlenecks are experienced also in other than highly skilled jobs.
Attention should also be paid to develop wide partnerships on the ground including the private sector, the municipalities, citizens' organisations, and the third sector. The regional and local actors have a major role to play in achieving concrete results.
Finland has maintained strong economic growth through the past five years. Even though there was a drop in the GDP growth in 1999, the economic outlook is very favourable with fairly low inflation and interest rates combined with considerable improvement in the export industry output.
In 1999 the total employment growth was 2.2%, the employment rate being 66.3% (69.1% for men and 63.4% for women), varying though considerably according to age. Over 80% of the prime age groups (25-54) were employed compared to those over 55 years out of whom only 38.8% were in employment.
The strong economic growth has led to rapid job creation, but due to a simultaneous increase of the labour supply, the total unemployment rate stood at 10.2% in 1999 (10.7% for women and 9.8% for men), with wide regional disparities. The youth unemployment ratio remained high in Finland (10.8%). Most new jobs are in the private sector, where recent labour shortages have occurred, especially in sectors experiencing rapid growth. The demand is focusing on young people with good qual ifications and IT skills, while at the same time job seekers that are over 50 years and with outdated skills tend to remain unemployed.
The NAP 2000 reflects the strong will of the Finnish government to improve overall employment by investing in knowledge-based growth. The government has set a target to reach an employment rate of close to 70% by 2003, which is in line with the Lisbon Conclusions. The objective is to promote balanced economic growth through disciplined fiscal and other policies, in order to prevent bottlenecks in the labour market. Emphasis is put on ensuring the supply of lab our and well-functioning labour markets by investing in skills development and public employment services. To improve efficiency, the focus will shift from targeting short-term unemployed to those in danger of shifting into long-term unemployment.
The employment policy in Finland is based on a thorough analysis of the needs and problems of the labour market. The NAP 2000 provides a strategic approach, consolidating its actions into eight distinct action programmes, all multi-sectoral with specific targets and timetables (i.e. improving skills within SMEs, the availability of skilled labour, New Start, preventing exclusion, reinforcing the information society, entrepreneurship, modernising work organisation and adaptability in ent erprises, an equal labour market).
To achieve a long-term impacts in the labour market, Finland has evaluated and defined the policies of the past rounds. From extensive use of labour market measures the focus has now been put on improving the quality of the actions. The individual service process and close cooperation with the companies have been put to the foreground.
Progress in key areas has been achieved and the recommendations have been addressed properly. Although immediate results cannot be expected, as most goals set out in the NAP 1999 were far reaching, positive steps have been taken especially in improving employability. Under Entrepreneurship the NAP set targets for further tax reductions, especially for low-income earners. These will now have to be translated into action in line with the Council recommendation. Achievements under Adapta bility concern a comprehensive review of all aspects of work organisation and serious efforts could be also seen in improving the equality policies.
Employability: The Finnish labour market policy reform aimed at providing all job seekers with an action plan to find work in the open labour market. Although significant progress was made, the targets set for GLs 1 and 2 were not fully reached in 1999. Of all unemployed job seekers around 95% received an action plan before reaching the threshold. However, almost half of those drifting into long-term unemployment (6/12 months) did not have an individual action plan. In spite of the importance of the prevention effort, the output indicator is still high: around 10% of both young and adult job seekers passed the threshold into long-term unemployment. The risk of long-term unemployment is very high for older job seekers (32% for the age group 55-59 and 61% for the age group 60-64).
Active labour market measures covered 30% of the unemployed job seekers in 1999. The follow-up data shows that even if nearly 30% found quickly work in the open labour market after subsidised work or labour market training, still 44% returned to unemployment after 3 months. The efforts to improve the quality of the measures should therefore be strengthened, especially when considering the problems of the most-difficult-to-place groups.
Lifelong learning has long been regarded as a generator of Finland's growth, competitiveness and employment strategies. In addition to offering a vocational training place to all young people, the objective has been to equip the adult population with the skills needed in the information society.
Adult education and labour market training have been expanded and developed, but as the NAP 1999 did not set concrete targets for lifelong learning, it is unclear how fruitful the measures have been. To ease the transition from school to work, most vocational training (70%) included practical training in 1999. Internet-links have been in place since early 1999 in 80-90% of primary schools, in 90-95% of upper secondary schools and in all vocational institutions.
A great effort was made to prevent bottlenecks and to secure the availability of labour (a national guideline). Universities and polytechnics, the regional and employment offices, together with the social partners, launched projects to anticipate changes in the labour demand and provided for extensive training programmes, especially in the ICT sectors.
Entrepreneurship: The creation of new companies was swift in the late 1990s; the number of SMEs has grown in all sectors, mostly in the services. To improve the survival rate and to facilitate the links between higher technology and the businesses, the Government has further increased investments to RDT (3.1% of GDP in 1999, including both state and private sector investment). The implementation of the planned actions under GLs 10-13 however had a slow start.
Adaptability: Particular attention has been devoted to the development of work organisation both by legislation and new ways of working. The Government, together with the social partners, has continued to develop labour legislation to guarantee the safety of workers and the flexibility of enterprises. Finally, after four years of preparatory work, the Employment Contract Act is being submitted to Parliament. It will bring about improvements in the job security in atypical work, pro visions related to trial period, and benefits and obligations to offered work. The social partners were also involved in launching the "Well-being at Work Programme" which has started during the first half of 2000.
Equal opportunities: Mainstreaming equal opportunities in all government acts has taken a step forward, but a longer "leap" will not be taken until in 2000 when the new Employment Contract Act will be assessed for its gender impact, and be used as a pilot project in assessing other legislative bills for their gender impact. To desegregate the labour market, each regional employment authority was obliged to draw up a programme for alleviating segregation. The NAP does not explain wha t concrete steps have been taken to proceed in this difficult task. The social partners have been involved in developing more equal wage systems and continued their project to develop an equal workplace.
Social partners: As previously, the social partners have been involved in the implementation and monitoring of the NAP. They have also taken an active role in the NAP 2000 and have committed themselves to carry out the planned initiatives. It is a basic principle that the social partners in Finland participate in the preparation of legislative proposals and decision making in the employment-related issues. The tripartite process facilitates cooperation and increases the commitment to the agreed upon goals.
Structural Funds: The role of the Structural Funds is not easy to trace in the 1999 progress report. During 2000-2006 the ESF together with the other Structural Funds will contribute to the goal of the Finnish Government to increase the employment rate, to keep the ageing workforce longer in work, and to support job-creation, thereby underpinning the implementation of the European employment strategy. The ESF plays a positive role in terms of developing new methods of implementing l abour market policies.
The 1999 Council recommendations on the implementation of Finland's employment policies
1) Pursue the review of existing benefit schemes, particularly those facilitating early retirement, in order to keep older workers longer in active life;
2) Pursue recent policy orientations to reduce the tax burden on labour;
3) Examine, in the context of a gender mainstreaming approach, ways to reduce the current levels of occupational and sectoral segregation in the labour market.
To pursue the review of existing benefit schemes, particularly those facilitating early retirement, in order to keep older workers longer in active life, the Finnish Government and the social partners agreed on a package of measures to support active ageing. The measures, initiated mostly at the beginning of 2000, include both incentives and disincentives for the employees and employers, e.g. employers' share of pension costs was increased, the age limit for early retirement was raised, but it was made possible to retire earlier on part-time pension. Preventive action is favoured through early rehabilitation plans and improving working conditions. The average retirement age has already risen by one year, but the link between the package of measures and this achievement is not clear.
To pursue recent policy orientations to reduce the tax burden on labour, the NAP 1999 announced that the government will continue cutting the income tax and social security contributions, with an emphasis on low-income earners. The government aims to gradually reduce taxes on labour by {{X80}} 1,8 billion (1.5% of GDP). The concrete decisions are taken yearly and are based on economic trends and the state of public finances. In 1999 the cuts amounted to {{X80}} 350 million, h around {{X80}} 260 million will go to wage earners. Significant further cuts have been announced for 2001. However, Finland still remains above the EU-average as far as tax burden on labour is concerned.
To examine, in the context of a gender mainstreaming approach, ways of reducing the current levels of occupational and sectoral segregation in the labour market, Finland has introduced a new initiative "Equal Labour Markets" to alleviate segregation. The social partners will be in a key position to implement this project, to be started in 2000. The initiative includes a feasibility study aiming at identifying key success factors in dismantling segregation and identifying out best practice. In addition, a regular monitoring of wage differences will be created. Whether concrete results will be achieved, remains to be seen.
The NAP 2000 puts strong emphasis on addressing the structural problems of the labour market, the most important being the availability of labour, high level of unemployment, threat of exclusion and gender segregation.
The local employment initiatives are not treated as a separate issue. Instead there is a plan to regionalise the implementation of the NAP implying that regional and local actors can adapt the plan to their own needs and circumstances. Because this is the critical point of the NAP, the dialogue between the central and regional levels will be decisive. It is also crucial to ensure that the implementation resources are sufficient.
Under Employability emphasis is given to long-term human resource development in SMEs as well as to skills-development of the total population to prevent shortage of labour and to ensure that the labour supply responds to the needed qualifications. To support regionally balanced development, action will be taken to create jobs also outside growth centres. An initiative called "New Start" will be launched to prevent prolonged unemployment. The measures in the individual action pl ans must be started before 6/12 months, and the quality of the plans will be improved.
To reinforce the information society, ICT in enterprises will be promoted, including new business methods and networking. To improve the quality of training, all educational institutions must draw up an ICT curriculum by 2002. This is to ensure that the objective of enhancing the IT skills of the total population will be reached.
A special Entrepreneurship project will be implemented in 2000 and 2001, where several Government services are cooperating to speed up actions to initiate new businesses and to improve their competitiveness. The focus will be on the critical stages of the life cycle of SMEs. Emphasis is also put on staff participation in the planning of training, professional development, and well-being of work-organisations. To improve adaptability the National Workplace Programme will be renewed, covering the entire workforce and focusing on older workers and promotion of equal work communities. This new programme is expected to cover 600 development projects and 85.000 employees (3.3% of the total workforce). Initiatives under Equal opportunities concentrate mainly on GL 19 tackling the segregated labour market by introducing concrete initiatives, e.g. to discover and eliminate the key factors maintaining segregation and to encourage girls and boys to choose an at ypical occupation.
|
Performance Indicators |
|||||||
|
Finland |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
66,3 |
64,0 |
61,9 |
60,5 |
62,2 |
59,9 | |
|
Males |
69,1 |
67,2 |
64,5 |
62,4 |
71,6 |
69,7 | |
|
Females |
63,4 |
60,8 |
59,2 |
58,4 |
52,9 |
50,0 | |
|
15-24 |
40,0 |
34,3 |
31,3 |
27,7 |
39,0 |
36,2 | |
|
25-54 |
80,3 |
78,7 |
76,3 |
75,1 |
75,6 |
73,4 | |
|
55-64 |
38,8 |
36,3 |
35,7 |
34,3 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
63,5 |
60,0 |
58,8 |
57,0 |
56,8 |
55,0 | |
|
Males |
67,5 |
64,1 |
62,5 |
59,7 |
69,7 |
68,6 | |
|
Females |
59,7 |
55,9 |
55,1 |
54,0 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
10,2 |
11,4 |
13,1 |
15,3 |
9,2 |
10,8 | |
|
Males |
9,8 |
10,8 |
12,6 |
14,9 |
7,9 |
9,6 | |
|
Females |
10,7 |
12,0 |
13,7 |
15,8 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
10,8 |
11,1 |
11,5 |
12,0 |
8,5 |
10,2 | |
|
Males |
10,9 |
11,1 |
11,5 |
12,2 |
8,5 |
10,3 | |
|
Females |
10,8 |
11,1 |
11,4 |
11,7 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
2,9 |
3,2 |
3,8 |
5,1 |
4,2 |
5,3 | |
|
Males |
3,1 |
3,6 |
4,0 |
5,6 |
3,2 |
4,5 | |
|
Females |
2,7 |
2,8 |
3,5 |
4,5 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
2,2 |
2,1 |
3,3 |
1,4 |
1,4 |
0,7 | |
|
Real GDP Growth |
4,0 |
5,5 |
6,3 |
4,0 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
1,8 |
3,3 |
2,9 |
2,6 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
-0,1 |
-2,3 |
-3,1 |
0,4 |
0,0 |
-0,5 | |
1. General appreciation
The labour market improved substantially during 1999 and with an employment rate of 72.2%, Sweden reinforces its position as one of the top performers in the EU. The mainchallenges in 1999 for the Swedish economy were to combat the high unemployment rate, to reduce the gender-segregated labour market and to reduce the tax burden, especially for low-income earners.
2. Policy-mix
The overall employment objective is to halve the unemployment rate by the end of this year reaching 4% (national definition) and to increase the employment rate to 80% by the year 2004, for people of working age. These goals will also reduce the numbers dependent on various benefits and grants. Activation and skills enhancement are fundamental to reach the goal of increasing the employment level meaning that the labour market policy supports those who have most difficulties in obtaining work on the one hand and underpin growth on the other hand.
3. Response to the 1999 Council recommendations
Some first steps have been taken to reduce the taxation on labour by raising the starting point for paying state tax and by reducing the tax contribution for financing earning-related and supplementary pensions of low and medium wage earners. These steps should be viewed as the start of a comprehensive tax reform.
The implementation and the effects of this comprehensive tax reform remain to be seen. Sweden intends to combat the gender segregated labour market by confronting the problem at a much earlier stage at all levels of education, and by an awareness campaign in the labour market to improve the situation of both sexes.
4. Challenges ahead
The main goal in the years to come should be to ensure an efficiently functioning labour market and to avoid bottlenecks in the labour market, thereby avoiding inflationary wage increases, and lead to sustainable employment and overall GDP growth. The tax burden on labour in Sweden is still the highest in the EU and efforts for reductions should continue. The Swedish labour market should promote geographical and occupational mobility in order to tackle increased regional disparities and also to satisfy regional skill shortages. Efforts to improve the integration on the Swedish labour market of those having most difficulties, including migrant workers, should be further pursued.
The Swedish economy continued to perform well during 1999 with an overall GDP growth of 3.8%. This boost in the economy has lead to a strong employment growth of 2.2%, which is the best for last 10 years. The employment growth during 1999 was evenly spread between women and men, with an overall employment rate of 72.2%, (70.3% for women and 74.0% among men), thus already higher than the target set by the Lisbon European Council for the EU. The majority of the employment growth has occurred in the private services sector.
The unemployment rate continued to fall during 1999 for both women and men and stands today at 7.1% for women and 7.2% for men. The youth unemployment ratio also declined to 6.2%. The unemployment for persons born outside Sweden has improved during the last two years but is still more than double the figure for the population as whole.
The employment rate among older people is very high, 64% for the age group 55-64 years old, compared with other Member States. The strongest growth during 1999 has, been for the young people, while the employment rate for the prime-age group remained stable.
The regional disparities remain and have increased during recent years, with strong growth in the southern part of Sweden and a less favourable development in Northern Sweden.
The overall employment objective is to halve the unemployment rate by the end of this year reaching 4% (national definition) and to increase the employment rate to 80% by the year 2004, for people of working age. These goals will also reduce the numbers dependent on various benefits and grants. Activation and skills enhancement are fundamental to reach the goal of increasing the employment level. This has meant that the labour market policy underpins growth on the one hand and supports those who have most difficulties in obtaining work on the other hand. During recent years the number of participants in various labour market schemes has been reduced; however, there is greater emphasis on labour market training, as a tool to underpin growth.
Swedish entrepreneurship policy aims at fostering a good business climate in general and also to fully exploit the job potential in the information society. To do so, the policy is directed, among other things, towards achieving broad IT skills throughout society and removing obstacles that might exist to fully exploit the potential in this sector.
Sweden's employment policy focuses on a good collaboration between the government and the social partners in order to create the conditions that will promote employability, flexibility and opportunities for lifelong learning. They intend to produce these initiatives jointly.
Equal opportunities for women and men are a cornerstone of the government's policy in achieving a more even distribution of growth and welfare. In obtaining this overall aim, well-developed childcare provision, care of elderly and the right to parental leave, are important factors to achieve this objective. The individual based tax and benefit system is also important in reaching equal opportunities between women and men.
The NAP focuses strongly on upgrading skills among employed and unemployed people, both by using traditional labour market policy measures and also new pioneering initiatives for lifelong learning. An Internet based information system is been created in order to improve the information available to small and newly started enterprises. The equal opportunity policy in Sweden is well developed and an additional initiative has been taken in the NAP aiming to reconc ile work and family life.
The Swedish NAP is well in line with the European Employment Strategy with an ambitious employment policy and with clear targets. The policy mix is to some extent biased with more emphasis put on employability and equal opportunities. Although the adaptability pillar is rather weak on the implementation part, efforts have been made to reinforce it in this year's NAP especially on competence development. Efforts are being made to improve the environment for entrepreneurs, especially in reducing the administrative burden for enterprises.
Employability: The preventive approach has been successfully implemented for young people. Around 90% of all newly unemployed young people commenced their individual plan before reaching the 6 months threshold. The output indicator shows that only 3% of those who became unemployed drifted into long-term unemployment. For the adults, around 93% had started an individual action plan before reaching the 12 months threshold, though the inflow rate (15%) into long- term unemployment is much higher than for youths, and this is a significant increase compared to 1998. This difference between adults and young is explained by a clearer national target for young people, which stipulates that every young unemployed person should have an individual plan before reaching 100 days of unemployment. In addition to what the Swedish regular educational
system is contributing to employability in the longer term, policy has also switched from work schemes to training measures. As the latter are more expensive, a smaller population will be reached with the same budget, which may in turn lead to an increased risk of adults becoming long term unemployed. The Swedish activation rate exceeds the target set out for the EU, amounting to 86%.
The measure "general recruitment incentive" has been successfully implemented and covered around 10 000 people per month during 1999. Of these, 63% obtained a job. In October 1999 an "extended recruitment incentive", giving a higher tax credit for employers who hire people who have been unemployed for more than 24 months, was introduced and had until March 2000 covered around 2 600 people monthly. The initiative to offer teachers skills development in the IT area is being imp lemented.
Entrepreneurship: A number of measures have been taken to reduce the administrative burden for enterprises, the most important being the National Tax Office and the Patent and Registration Office implementing measures on simpler company registration. To improve the information available to small and newly started enterprises an Internet based information system will be created. During 1999 each county has prepared a Regional growth plan emphasising the importance of knowledge growth and promoting lifelong learning to underpin the regional and local needs.
Adaptability: The Swedish labour legislation is largely optional and is complemented with collective agreements between the social partners. This leads to large differences in working practices in the different sectors. Part-time employment is common in Sweden, especially among women. However, approximately 1/3 of part-timers wants to increase their working time. The progress under the Adaptability Pillar is however vague, which makes it difficult to assess the implementation of N AP 1999.
Equal opportunities: The use of parental allowances for men has risen during 1999 and amounted to 33%. The introduction of the "father's month" has clearly affected the share of parental allowance utilised by fathers. Around 70% of the fathers of children born in 1995 and 1996 have used parental allowance during the child's first two years. This can be compared with 60% for fathers of children born in 1993.
Social partners: The dialogue between the government and the social partners has continued and been strengthened during the preparation of the NAP. In particular in the areas concerning education, training and skills development in working life, a tripartite agreement has been concluded. The partners have highlighted the need of a more differentiated and individual oriented labour market policy. Consensus on a central level is an important criterion for a stable and sound economy, and will make it easier to reach consensus on a local level.
ESF: The importance of the ESF as a tool of implementing the employment strategy is more visible in this year's NAP. ESF's main task during the programming period 2000-2006 will be to strengthen the skills development of both employed and unemployed people.
The 1999 Council recommendations on the implementation of Sweden's employment policies
(1) Take measures to reduce the high tax burden on labour income, in particular for those with a low take-home pay from work;
(2) Examine, in the context of a gender mainstreaming approach, ways to reduce the current levels of occupational and sectoral segregation in the labour market.
Sweden should take measures to reduce the high tax burden on labour income with an emphasis on low take-home pay from work. As a first step of a comprehensive tax reform, starting from 1 January 2000, the tax has been reduced for low and medium wage earners. Some first steps have been taken to reduce the tax for low-income earners, by reducing their individual tax contribution and by raising the starting point for paying state tax. Furthermore, the minimum income level for paying state tax has been increased and the target is that no more than 15% of the taxpayers should pay state tax instead of 18% (19% in 1999) as it is today.
Sweden should examine, from an equal opportunities viewpoint, how gender-segregation in various sectors and occupational categories can be reduced. The Swedish labour market is too highly gender-segregated. The plan, however, also points out the beneficial effects for female employment of the development of public services (such as child care etc). In order to tackle segregation, some actions have been taken especially within the education system in order to affect pupils' choic e of higher education. In addition to these specific measures, active labour market policies also contribute to affect the choice of occupation for women and men. Although the results of these measures should be seen in a long-term perspective, efforts should be continued in this direction.
The regional growth agreements will be implemented during year 2000 to reinforce the collaboration between different actors on a local and regional level and to find measures that will increase growth and employment. Most schools have access to Internet, 85% of primary school pupils and 88% of secondary school pupils have access.
Under employability emphasis is put on reaching those who have most difficulties in obtaining a job by proposing that the recruitment incentives should be strengthened. The length and tax reduction for the recruitment incentives will depend on how long the unemployed has been registered, i.e. the more severe the problem is, the higher the tax reduction will be. Furthermore, an "activity guarantee" will be introduced with the aim of breaking the vicious circle for those who have been unemployed for more than 24 months, by giving them a stable and sustainable full-time activity until they find a full-time job. This measure implies that none will be unemployed for more than two years. Furthermore, the unemployment insurance is being reformed with the aim of reinforcing its role as adjustment insurance. The aim is to clarify the efforts that individuals need to do while seeking work, together with reinforcing the requirements in terms of geographical and occupational mobility. In order to stimulate the labour force participation for older workers the government will propose later this year that it will be possible to continue to work until the age of 67 years.
Under entrepreneurship work has continued to reduce the administrative burden and simplify the rules both for those who want to establish a new business and for existing businesses. The government intends to create a new authority for business development by a merger of parts of existing authorities, which is expected to improve support services for entrepreneurs and would-be entrepreneures. Furthermore, the government aims to reduce the tax for low and medium wage earners. Beyo nd the recommendations, the Swedish government has taken further steps towards a green tax shift by raising diesel tax, electricity tax and nuclear power tax. The revenue gained from this tax increase will be used for tax subsidies in conjunction with individual skills development.
Theadaptability pillar has been reinforced compared to previous NAPs. The government intends, on the request from the Swedish parliament, to present a proposal during spring 2000 concerning the right for employers to make exemption for two employees in each workplace from the priority rules of the Employment Protection Act. A goal has also been set to reduce the number of "part-time unemployed people", i.e. people who want to increase their working time, a goal which, in an agreement between the government and relevant social partners, aims to reduce that group from 30,000 people to 15,000 people. The Swedish government has allocated more than 117 Mio {{X80}} as a stimulus for individual savings towards skills development. The stimulus will be provided in the form of a tax subsidy.
Under equal opportunities emphasis is put on measures to tackle the gender segregated labour market, and to continue the work towards a gender mainstreaming approach into day-to-day activities within all policy areas on a central, regional and local level. The family policy has been further strengthened. Among other things an additional "father's month" will be introduced later this year aiming to provide incentives for men to utilise parental leave to a higher degree. Furthermo re, as a first step in lifelong learning, general pre-school for 4 and 5 year-olds will be introduced from 1 January 2003 and a ceiling on child-care fees are some actions that will be presented in a bill for the Parliament during spring 2000.
|
Performance Indicators |
|||||||
|
Sweden |
|||||||
|
Annual data |
|||||||
|
Employment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
72,2 |
70,6 |
68,3 |
69,7 |
62,2 |
59,9 | |
|
Males |
74,0 |
72,1 |
69,8 |
70,6 |
71,6 |
69,7 | |
|
Females |
70,3 |
68,9 |
66,8 |
68,7 |
52,9 |
50,0 | |
|
15-24 |
40,7 |
35,4 |
32,1 |
33,8 |
39,0 |
36,2 | |
|
25-54 |
82,3 |
81,9 |
80,4 |
81,4 |
75,6 |
73,4 | |
|
55-64 |
64,5 |
64,6 |
61,6 |
64,1 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
63,1 |
61,7 |
61,2 |
62,2 |
56,8 |
55,0 | |
|
Males |
68,4 |
67,5 |
66,4 |
67,2 |
69,7 |
68,6 | |
|
Females |
58,0 |
56,0 |
56,1 |
57,4 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
7,2 |
8,2 |
9,9 |
9,6 |
9,2 |
10,8 | |
|
Males |
7,2 |
8,6 |
10,2 |
10,1 |
7,9 |
9,6 | |
|
Females |
7,1 |
7,8 |
9,5 |
9,0 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
6,2 |
7,5 |
9,3 |
9,5 |
8,5 |
10,2 | |
|
Males |
6,2 |
8,0 |
9,7 |
10,0 |
8,5 |
10,3 | |
|
Females |
6,3 |
7,1 |
8,8 |
9,0 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
2,1 |
3,1 |
3,4 |
2,9 |
4,2 |
5,3 | |
|
Males |
2,4 |
3,5 |
3,7 |
3,4 |
3,5 |
4,5 | |
|
Females |
1,7 |
2,6 |
3,1 |
2,4 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
2,2 |
1,3 |
-0,6 |
-0,6 |
1,4 |
0,7 | |
|
Real GDP Growth |
3,8 |
3,0 |
2,0 |
1,1 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
1,5 |
1,7 |
2,6 |
1,7 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
-0,6 |
0,3 |
-0,8 |
3,6 |
0,0 |
-0,5 | |
|
General appreciation: The UK's favourable employment growth continues, although some structural challenges need tackling. The tightening labour market is showing signs of skill gaps in certain sectors, particularly in IT. Although falling, much of the remaining long-term unemployment is concentrated within workless households, amongst disadvantaged groups, and in a number of geographical areas, presenting associated problems of social exclusion. T he UK has the lowest labour force participation rates for lone parents in the EU. Policy mix: This years' NAP sets out a more ambitious goal of full employment. The mix has a better balance between pillars, but with an emphasis on tackling social exclusion and bringing the inactive into work. Response to Recommendations: The Minimum Wage is helping low paid women and closing one of the largest gender pay gaps in the EU. 1999 UK figures indicate the gap for hourly full-time earnings shrank by one percentage point to 19%. A wider range of policies to tackle occupational gender stereotyping and segregation, could further encourage this reduction. The contribution to the NAP of the UK's two main Social Partners reflects a closer relationship with Government. There are clearer signs of specific actions at all levels in the economy, especially the local level. Progress on national involvement could be built upon. Current statistical monitoring systems have enabled the calculation of most policy indicators. On activation, the UK provides two indicators, one applying the common definition, showing the UK falls well below the 20% target, and one using the UK's wider definition, including intensive counselling and advice with job search. Under this definition the UK achieves 100%. Reforms are addressing the deficiency of childcare provision. The number of publicly funded childcare places has increased by 170,000 under current initiatives. This progress will contribute towards a reduction of a gender gap in employment of over 3 million jobs. Challenges ahead: Certain labour market policy challenges face the UK. The main weakness in providing active support to prevent adult long-term unemployment is the over reliance on intensive job search through the Job Seekers Allowance regime (JSA). For most adults more intensive support is not provided until the 24 month point when they move on to the New Deal. Flagship policies for lifelong learning represent fundamental changes in policy but are still to be fully implemented. T here is little detail on progress towards meeting national targets. In addition policies need to target those with basic skill problems, and show how access and opportunity will be ensured for these groups. This is a particular problem for older workers. Social Partners have an important role in promoting workplace learning to tackle basic skill levels and helping address low labour productivity. |
1999 saw continued real GDP and employment growth, translating into a higher employment rate of 70.4%. The rate for women increased whilst remaining relatively static for men. Most of this growth is due to increases in full-time employment. There remains a large difference between the employment rate for women and the full-time equivalent although this indicator is less relevant to the UK. Working patterns mean the distinction between part-time and full-time work is increasingly blurred. The employment rate for 15-24 year olds fell due to increased participation in education. The employment rate for older workers is above the EU average. The tightening labour market shows signs of skill gaps in certain sectors, particularly IT. Labour productivity growth was slightly under the EU average in 1999 and levels remain below that of major competitors.
Unemployment fell to 6.1% in 1999. Rates for women remain lower than for men. Male youth unemployment exceeds the EU average. The long-term unemployment rate continues to fall and is less than half of the EU average. Unemployment and inactivity are increasingly concentrated amongst male older workers, disadvantaged groups, and within a number of deprived communities where the number of workless families is high. Regional unemployment disparities remain significant, although large sub -regional variations in unemployment have also been highlighted as a problem.
This NAP presents an ambitious strategy to deliver full employment by ensuring job opportunities for all. With unemployment at its lowest level for 20 years, the UK problem is increasingly becoming the need to extend the workforce. The employability pillar sets out the strategy of "making work pay". Tax and benefit reforms are designed to remove financial disincentives of returning to work and tackle associated problems of social exclusion. The UK has set tar gets for 2002, to increase participation in lifelong learning, raise skill levels, cut the numbers of early school leavers by one third and have all schools online. Local employment creation initiatives are a central objective for the UK Government and the devolved administrations in addressing problems of geographical variations in job creation and opportunities. The Adaptability pillar concentrates on maintaining a flexible workforce, combined with measures to ensure a minimum standard of fairness. The re are a range of initiatives aimed at improving the work/life balance and encouraging more women into the labour force.
The NAP provides a well-developed presentation of how the UK policy mix is designed to tackle labour market issues. However, by not distinguishing between existing and new policies, the style often renders the identification of new developments difficult. A number of important new policies are not included, in particular in the area of social inclusion. Despite this, the NAP presents a more balanced policy mix, especially between the first two pillars. The Em ployability pillar remains most important but more emphasis is placed on entrepreneurship in this NAP. The Adaptability pillar reconfirms moves towards a balance between flexibility and security, with the Social Partners confirming such a need, but there seems little in the way of new initiatives. There is also little specific detail on how the UK will tackle low labour productivity.
The UK continues to move towards a more active and preventative labour market policy since the start of the EES. Further moves towards compliance can be seen under the Employability, Entrepreneurship and Equal Opportunity pillars. There is little visible change in Adaptability policy. Certain policies announced in previous NAPs, like the Minimum Wage and the New Deal initiatives are starting to tackling labour market issues, but in general the NAP could have provided more detail on the impact policies are now having.
Employability: The NAP provides the full range of input and output indicators, although not broken down by gender. For guidelines 1 and 2 the active nature of the JSA regime means that all claimant unemployed receive a new start before the 6 or 12 months. The 100% compliance rate is linked to strict benefit sanctions. The input indicator for guideline 3 is discussed under section 4.1. The key policies of the active approach remain the New Deal initiatives. E valuation evidence is suggesting that the New Deal for Young People is having an impact on the off-flows from unemployment. However, inflows into long-term unemployment of both the young and adults (17% and 11% respectively) still exceed those of the best performing Member States. Taxation reform towards in-work support for the low paid through the Working Families Tax Credit (WFTC) is now benefiting 1.4 million workers. The Minimum Wage is paid to 1.5 million low paid workers, mostly women. Combined wi th a lower starting rate of income tax, these measures are removing financial disincentives of returning to work. The New Deal for 50 plus and the New Deal for Disabled People benefit the older inactive or unemployed.
UK policy aims to encourage lifelong learning to address low levels of basic skills. Ambitious national targets have been set. The NAP illustrates the role of partnership in delivering the strategy but does not adequately reflect the priority the Government places on this area. There is little indication of how flagship policies will target provision towards those with basic skill problems, and how access will be ensured for groups on the wrong side of the "Learning Divide". This is a particular problem for older workers. Flagship initiatives, announced three years ago, have yet to be fully implemented. The University for Industry will not start until autumn 2000, and IT learning centres will not be delivered nationally until 2002.
Entrepreneurship: The UK is one of the best performers in terms of employment in services. The UK has one of the shortest lead-in times for starting a new business and the second lowest rate of non-wage labour costs in the EU. Taxation reform is designed to remove barriers to setting up and running SMEs. Devolution of powers to Scotland, Wales, Northern Ireland and the English regions is having an impact on this pillar. The English Regional Development Agencies and the devolved ad ministrations have responsibility for developing strategies to increase skills and stimulate job creation. The work of local agencies is key to stimulating enterprise and tackling social exclusion.
Adaptability: Social Partners re-affirm the need for an appropriate balance between flexibility and security. This has been helped by the 1999 Employment Relations Act. The NAP recognises the UK's persistently low levels of labour productivity growth but there is no discussion of the early impact of the policies in this area. The NAP does begin to spell out steps taken by the Government and Social Partners to promote workplace learning through initiatives like the Union Learning Fu nd and the Partnership Fund. The important role of the National Skills Task Force under this pillar is not discussed.
Equal opportunities: Childcare provision and policies to tackle the gender pay gap are discussed in section 4.1. The introduction of in-work support through the WFTC is helping parents to move into work. The NAP reports on the New Deal for Lone Parents (NDLP), which tries to encourage more lone parents into work. However take-up remains low. The Women's Unit within Government is responsible for the monitoring of all new policy to ensure that gender issues are fully considered. In addition the Government and the devolved administrations require all new legislative policy to contain a statement on gender impact.
Social Partner arrangements are discussed in section 4.1.
ESF and the structural funds: The NAP sets out well the role that the Structural Funds have and will play in delivering the EES. ESF and ERDF have already delivered contributions to the NAP objectives. There is also detail on how the Structural Funds, in particular ESF will be used to underpin the NAP in the 2000-2006 programming round. ERDF will have a major role to play in tackling variations in local job creation and in encouraging entrepreneurship and adaptability, and the ESF will play an important role across all pillars, with particular emphasis on the Council Recommendations. This strategy will be reinforced by the Government's commitment on match-funding arrangements for Structural Fund interventions, which will help to deliver NAP objectives.
The 1999 Council recommendations on the implementation of UK employment policies
(1) Focus on the issue of gender pay gap and develop appropriate policies to address this, building inter alia on the positive effects to be expected from the introduction of the minimum wage in 1998.
(2) Encourage a partnership approach and promote concrete commitments by the social partners at all appropriate levels on the modernisation of work organisation, with the aim of making undertakings more productive and competitive while achieving the required balance between flexibility and security.
(3) Upgrade the statistical monitoring system, so that policy indicators on prevention and activation will be provided by 2000 in accordance with agreed definitions and methods.
(4) Pursue efforts to expand and improve the quality of child care provisions, in order to enable particularly women to participate more in part-time as well as full-time work, according to their preferences.
The Minimum Wage has started to benefit women who are over represented amongst the lower paid. Although narrowing, the UK still has one of the highest gender wage gaps in the EU. Further reductions would be helped by a wider range of policies to tackle stereotyping by occupation. There is no mention under this recommendation of the Part-time Work Directive, legislation which will ensure fairer pay and conditions for the UK's part-time workers, 80% of whom are women.
This NAP demonstrates a more transparent partnership approach. The two Social Partners have provided a joint text for their section of the NAP. Partnership arrangements work differently in the UK and this NAP uses good practice examples to illustrate how arrangements work at the local and company level, although this often makes the evaluation of progress difficult. Local partners are key to tackling issues like social exclusion. At national level, involvement could be built up on. The Social Partners welcome the establishment of the Partnership Fund, which aims to support projects in the workplace which foster partnership, training and importantly given the UK's more dispersed partnership culture, the spread of good practice. Consultation with the Devolved administrations and the English regions has improved compared with last year.
Current statistical monitoring systems have enabled the calculation of most policy indicators on prevention and activation. For guideline 3, under the common definition of the indicator, 8.7% of the unemployed receive active training. Although this has increased from the previous year it is significantly below the 20% target. The NAP argues that this figure by itself does not represent an appropriate indication of the help available from active labour market policies relevant to guideline 3. Applying the UK's wider definition of support, which includes counselling, and help with job search allows the inclusion of the JSA regime and a range of other initiatives. Under this measurement the UK achieves 100%.
This year's NAP reinforces measures to boost the provision of childcare. There is a development of a clear strategy with a frank admission that the UK has been slow to develop good quality, affordable and accessible childcare. Progress is being made with the number ofpublicly funded childcare places increasing by 170,000 under current initiatives. The WFTC contains a credit to assist towards childcare costs. The local delivery of the childcare strategy is designe d to match the provision with the local demand. Progress needs to continue if the UK is to encourage more women into the workforce to facilitate further employment growth. Despite high participation rates, further potential still exists, with a gender gap in employment of over 3 million jobs.
Employability: The range of New Deal initiatives has been extended to offer support to a wider spectrum of the out of work. Over 50 either inactive or unemployed may now join the New Deal 50 plus. From April 2001 adults' unemployed for 18 months will be eligible for a more intensive New Deal for 25 plus. Recent policy builds upon tax and benefit reform with an impressive range of measures to remove financial disincentives and "make work pay". Chan ges to income support, extended payments of housing benefit, and a Job Grant, are designed to smooth the transition into work. In 2003 an employment tax credit will extend the principle of the WFTC to those without children. From 2001 the responsibilities of the PES and much of the Benefits Agency will be merged. The Government is investing in IT initiatives to modernise the PES, including a telephone match service, a call centre and a "Learning and Workbank" website providing on-line access to al l PES and many other vacancies.
The network of Learning and Skills Councils begins in April 2001 and will play a major role in improving participation in lifelong learning and ensuring flexibility in meeting local skill needs. There is no mention of some important new developments under lifelong learning, for example the new Adult Basic Skills Strategy Unit introduced as part of the Government's response to the Moser report. Raising education standards is a priority. By 2002 the Government aims to reduce by one-third levels of truancy, irregular attendance and exclusion. The revised English National Curriculum aims to provide school leavers with the skills for a modern workforce. In 1999 62% of primary and 93% of secondary schools were online, by 2002 the target is for all education establishments to have an internet connection.
Entrepreneurship: The Government aims to make the UK the "best location in the world for e-commerce by 2002". The growth strategy for IT employment concentrates on removing barriers to e-commerce and encouraging investment through tax breaks. Budget 2000 introduced a 100% capital allowance for small firms buying ICT equipment. The range of local job creation policies designed to tackle social exclusion are impressive, but not fully reflected in this NAP. Both the New Deal for Comm unities and Employment Zones, which started in 15 new areas in April 2000, will be focused on areas with pockets of high unemployment. However there is little or no discussion of a range of new policy initiatives like Employment Action Teams and the job and skills focus of the National Strategy for Neighbourhood Renewal.
Adaptability: In July 2000 the Part-time Work Directive will enhance existing legislation and ensure a fairer treatment for the UK's significant number of part-time workers. The Regulatory Impact Unit ensures new regulations are transparent and carefully targeted. Otherwise, the NAP presents little new policy on further developing both flexibility and security.
Equal Opportunities: Recent initiatives concentrate on tackling gender gaps and improving the work/life balance to encourage more women into the workforce. Special attention should be paid to lone parents. The UK has the lowest participation rates for lone parents in the EU and the UK should build upon a number of important lessons and changes to the NDLP to reinforce policies in this area. The coherence and consistency of gender mainstreaming in the NAP would be improved by a bett er demonstration of the gender impact of policies.
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Performance Indicators |
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|
United Kingdom |
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|
Annual data |
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|
Employment Indicators |
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|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Rate |
70,4 |
70,2 |
69,7 |
68,7 |
62,2 |
59,9 | |
|
Males |
76,9 |
77,0 |
76,3 |
75,0 |
71,6 |
69,7 | |
|
Females |
63,7 |
63,2 |
63,0 |
62,3 |
52,9 |
50,0 | |
|
15-24 |
55,0 |
56,1 |
55,7 |
54,9 |
39,0 |
36,2 | |
|
25-54 |
79,6 |
79,1 |
78,4 |
77,5 |
75,6 |
73,4 | |
|
55-64 |
49,4 |
48,3 |
48,5 |
47,7 |
36,9 |
35,9 | |
|
Full-time eq. Employment rate |
60,6 |
60,3 |
59,8 |
59,0 |
56,8 |
55,0 | |
|
Males |
73,2 |
73,4 |
72,6 |
71,7 |
69,7 |
68,6 | |
|
Females |
48,7 |
47,9 |
47,7 |
47,0 |
44,2 |
42,3 | |
|
Unemployment Indicators |
|||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU1996 | ||
|
Total Unemployment Rate |
6,1 |
6,3 |
7,0 |
8,2 |
9,2 |
10,8 | |
|
Males |
6,7 |
7,0 |
7,8 |
9,5 |
7,9 |
9,6 | |
|
Females |
5,3 |
5,5 |
6 |
6,5 |
10,8 |
12,4 | |
|
Youth Unemployment Ratio |
8,6 |
9,1 |
9,4 |
10,2 |
8,5 |
10,2 | |
|
Males |
10,1 |
10,7 |
11,2 |
12,5 |
8,5 |
10,3 | |
|
Females |
7,0 |
7,3 |
7,6 |
7,7 |
8,5 |
10,1 | |
|
Long-Term Unemployment Rate |
1,8 |
2,1 |
2,7 |
3,3 |
4,2 |
5,3 | |
|
Males |
2,3 |
2,7 |
3,4 |
4,4 |
3,5 |
4,5 | |
|
Females |
1,1 |
1,3 |
1,6 |
1,8 |
5,0 |
6,2 | |
|
Annual change |
Employment related Economic Indicators |
||||||
|
1999 |
1998 |
1997 |
1996 |
EU 1999 |
EU 1996 | ||
|
Total Employment Growth |
1,2 |
1,2 |
2.0 |
2,6 |
1,4 |
0,7 | |
|
Real GDP Growth |
2,4 |
2,7 |
2,5 |
1,6 |
2,4 |
1,6 | |
|
Labour Productivity Growth |
0,9 |
1,0 |
1,4 |
-0,1 |
1,0 |
1,0 | |
|
Real Unit Labour Costs |
0,8 |
1,1 |
0,0 |
-1,3 |
0,0 |
-0,5 | |