LABOUR MARKETS IN SOUTH EASTERN EUROPE
This programme is supported by the LSEE funding framework through the National Bank of Greece Research Fund. The programme was established in October 2012 and in its initial phase it is expected to last for 12 months. Four research projects are running within the programme, concerning topical and pressing issues for the region’s labour market(s).
These are: (i) Employment polarisation under transition: changing occupational distributions and their geography; (ii) Non-standard forms of employment: determinants and impact on individual employment progression; (iii) Employment and skills: mismatch, activation and inclusion; and (iv) Impact of public sector employment on local labour markets.
The programme is directed by Drs Vassilis Monastiriotis and Will Bartlett. Members of the research team include Dr Jelena Lausev (University of Belgrade) and a group of doctoral researchers (S. Avlijas, M. Cino-Pagliarello, A. Martelli).
Project Summaries
Employment polarisation
A trend towards employment polarisation (simultaneous rise in high- and low-skilled jobs) has been robustly identified in a range of advanced economies (see Goos & Manning, 2007, REStat; Holmes, 2010, SCOPE) – generally explained through processes of financialisation (rise in business services), skill-biased technical change (linked to trade openness), labour market dualisation (related to deregulation) and migration (creating conditions for low-skilled and informal job-creation). Starting from the observation that such processes play a particular role in the Balkan context of delayed and incomplete transition, the project sets to examine the extent and evolution of employment polarisation in the region building on the work of Goos & Manning (2007) who test the relationship between employment growth and initial pay levels across occupational categories. Analysis will be undertaken, with the use of micro-data from the national and European Labour Force Surveys, for a range of SEE countries (Serbia, Croatia, Macedonia and Bulgaria), thus offering a comparative element in our research. Further, by examining changes in the relative growth of different occupational groups over time, the project will investigate how the macro-economic and political context (transition, progress with EU accession, the global crisis) has affected the intensity (and direction?) of employment polarisation in the countries under study.
Non-standard employment
The project examines the micro-determinants of informal and non-standard employment in a range of SEE countries, using data from the national and European Labour Force Surveys, as well as the impact of such forms of employment on future employment outcomes for the individuals concerned. The international literature has long addressed these issues, raising essentially the question as to whether non-standard employment constitutes a ‘stepping stone’ (into the labour market and thus towards better employment outcomes) or a ‘stumbling block’ (in the sense of a ‘trap’ into sub-standard employment outcomes) – see Schmid (1995, EID), OECD (1997), Scherer (2004, WES), Kaiser (2006, IZA), Boheim and Webber (2010, GerEconRev). In the Balkans, this question has only been addressed at the margin, mainly through a number of policy studies (Fetsi, 2007, ETF; Gligorov et al, 2008, wiiw; see also Krstic and Sanfey, 2011, EconTran). The project attempts a closer and much more systematic look into the issue, asking in particular whether transition, linked as it is to industrial restructuring and ‘jobless growth’ (especially within the Balkan context), renders non-standard forms of employment stumbling blocks for the career progression of individuals or if, instead, it helps resolve labour supply bottlenecks, thus addressing structural problems of inactivity and labour market detachment often observed in the SEE region.
Employment and skills
The economic crisis in SEE has brought to the fore the need for a new growth model based less on the inflow of external resources as in the past, and more on the mobilisation of domestic resources and the development of the competitiveness of their economies. A key feature of this reorientation towards growth is the development of workforce skills to support the rebalancing of the economies towards high value-added export-led growth. Yet simply developing skills will not necessarily address the employment question, as skills bottlenecks are often related to wider labour market and social problems such as discrimination, labour market detachment, uneven accessibility to schooling, training and further education, spatial imbalances, etc. The project explores the relationship between (in)activity, skills, employment and social inclusion, aiming to contribute to the design of policies that would ensure that skills strategies, increasingly in the agenda of national and regional institutions (see, for example, the RCC ‘New Skills for New Jobs’ agenda), contribute to effective and inclusive job generation. The project combines a desktop-based literature review (building on work published in Bartlett, 2009) with a small-scale fieldwork-based qualitative study of ‘local skill development systems’ in a small number of cities in SEE designed to identify the characteristics of local economies which contribute to the generation of skills (mainly the role of synergies between different actors such as schools, training institutions, local employers, high-growth SMEs, foreign investors, etc).
Impact of public sector employment
Although the public sector is often perceived as a distortion to the (private) labour market (by reducing labour-supply there and raising reservation – and thus overall – wages, by rising production costs – e.g., through land rents – and by creaming-off skilled employees), public sector employment, at least at the local level, can in fact have positive effects on private-sector activity, both in terms of product demand (directly, through public sector procurements, or indirectly, by generating higher incomes and thus stimulating consumption) and labour supply (by stimulating the concentration of a pool of skilled professionals and supportive service-sector workers). Despite the centrality of this issue, especially with the current trend across Europe for public sector downsizing, relevant research is surprisingly thin – although fast growing (see Burdett, 2011, LabEcon; Faggio and Overman, 2012, SERC, etc). The project uses a Mincerian wage equation approach to study the impact of local public sector employment on individuals’ wages in the private sector. By implementing this analysis both within occupations and on aggregate, we are able to separate between positive demand effects (spilling-over throughout the economy – i.e., across occupations) and negative supply effects (which are sensibly assumed to operate largely within occupational categories), thus shedding light not only on the overall role of public sector employment for private-sector outcomes but also on the mechanisms that produce these outcomes – with obvious and important implications for (labour market) policy in the region and beyond.
Project Outcomes
All projects have commenced in the autumn of 2012. Reports on progress with the research projects and relevant outputs (conference / seminar presentations, working papers, etc) will be uploaded on this page as they become available.