E CONOMIC IMPACT OF P RECARIOUS EMPLOYMENT

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1 E CONOMIC IMPACT OF P RECARIOUS EMPLOYMENT The Case for Decent Work, UNITE, 23 July 2015 Daragh McCarthy NERI (Nevin Economic Research Institute) Daragh.McCarthy@nerinstitute.net

2 OVERVIEW I. Profile of workers in precarious employment II. Impact of precarious employment on workers III. Impact of precarious employment on the wider economy IV. Conclusion

3 P ROFILE OF WORKERS IN PRECARIOUS EMPLOYMENT

4 P ERMANENT & FIXED- TERM CONTRACTS Percentage of all employees, average Permanent Contracts All fixed term contracts 0 AUT BEL DNK FIN FRA DEU GRC IRL ITA LUX NLD PRT ESP SWE GBR

5 F IXED- TERM CONTRACTS AMONG NEW HIRES Percentage of employees with no more than three months tenure GBR DNK AUT LUX BEL IRL DEU GRC FIN ITA NLD FRA SWE PRT ESP

6 R EASON FOR HAVING FIXED TERM CONTRACT Percentage of employees with a fixed term contract, excluding students & apprentices, Did not want a permanent job Probationary period Could not find a permanent job ESP GRC PRT IRL BEL ITA FIN DNK GBR FRA SWE LUX DEU NLD

7 T EMPORARY EMPLOYMENT BY AGE GROUP Percentage of employees with a fixed term contract, AUS (55-64) GBR DNK (25-54) (15-24) BEL IRL AUT LUX FIN NLD ITA DEU FRA SWE PRT ESP

8 N ON- STANDARD EMPLOYMENT BY EDU ATTAINMENT Employees aged excluding employers, student workers and apprentices. Lower educated Middle educated Higher educated GRC DEU NLD AUT ESP IRL BEL ITA GBR SWE FRA FIN PRT DNK LUX

9 SHARE OF WOMEN IN NON- STANDARD EMPLOYMENT Percentage of employees with a fixed term contract, GRC PRT ITA ESP IRL FIN GBR DNK SWE FRA BEL NLD DEU AUT LUX

10 T EMPORARY EMPLOYMENT BY OCCUPATION Employees aged 25-54, Managers & professionals Clerical, services sales & Skilled Agric, craft & machine ops Elementary occupations ESP PRT NLD FIN ITA SWE FRA GRC DEU IRL DNK BEL LUX AUT GBR

11 I MPACT OF PRECARIOUS EMPLOYMENT ON WORKERS

12 W AGE PENALTY FOR NON- REGULAR EMPLOYEES Estimated average difference in hourly wages between full-time non-regular and permanent employees. Wage penalty for non-regular employees expressed as a percentage of the wage of permanent employees 10 Men Women AUS AUT BEL CZE EST FRA DEU HUN ITA LUX POL PRT ESP SVK GBR

13 T RANSITION FROM TEMPORARY TO FULL TIME Percentage share of employees in 2008 that were employed as full-time permanent employees in NLD GRC EST ESP IRL ITA AUT BEL PRT SWE LUX GBR FIN

14 T EMPORARY WORKERS & TRAINING Estimated percentage effect of temporary contract status on probability of receiving employer sponsored training, FRA ESP DNK BEL NLD FIN SWE AUT IRL GBR DEU AUS

15 I MPACT OF PRECARIOUS EMPLOYMENT ON THE ECONOMY

16 I MPACT OF PRECARIOUS WORK ON THE ECONOMY I. Consumption & domestic demand II. Income Inequality and economic growth III. Skills profile, training and lost potential

17 D OMESTIC DEMAND At constant market prices (seasonally adjusted) 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 '97, Q1 '97, Q3 '98, Q1 '98, Q3 '99, Q1 '99, Q3 '00, Q1 '00, Q3 '01, Q1 '01, Q3 '02, Q1 '02, Q3 '03, Q1 '03, Q3 '04, Q1 '04, Q3 '05, Q1 '05, Q3 '06, Q1 '06, Q3 '07, Q1 '07, Q3 '08, Q1 '08, Q3 '09, Q1 '09, Q3 '10, Q1 '10, Q3 '11, Q1 '11, Q3 '12, Q1 '12, Q3 '13, Q1 '13, Q3 '14, Q1 '14, Q3

18 INCOME INEQUALITY AND GROWTH, Average annual growth rate of GDP per capita ( ) % Inequality (Gini coefficient)

19 R OLE OF MOBILITY IN THE LABOUR MARKET I. Gateway or trap? II. Path to new jobs or replacing existing? III. Lifetime earnings and skill development

20 T RANSITION FROM TEMPORARY TO FULL- TIME Percentage share of employees in 2008 the were employed as full-time permanent employees in NLD GRC EST ESP IRL ITA AUT BEL PRT SWE LUX GBR FIN

21 I MPACT OF PRECARIOUS WORK ON THE ECONOMY Less than 50% of workers on temporary contracts in a given year were employed with full-time permanent contracts three years later

22 T EMPORARY WORKERS & TRAINING Estimated percentage effect of temporary contract status on probability of receiving employer sponsored training, FRA ESP DNK BEL NLD FIN SWE AUT IRL GBR DEU AUS

23 E MPLOYER SOCIAL SECURITY CONTRIBUTION Tax wedge composition 2013 NL IE UK LU DE FI PT EL AT ES BE SE IT FR %

24 R OLE OF MOBILITY AND LIFETIME EARNINGS I. Three quarters of short-term earnings inequality is permanent II. Life time earning differentials established in first 10 years of a career to a large extent

25 CONCLUSION I. Gateway or trap? II. Path to new jobs or replacing existing? III. Lifetime earnings and skill development

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