La disoccupazione giovanile in tempo di crisi: un monito all’Europa (continentale) per rifondare il diritto del lavoro? = Youth Unemployment in Recessionary Times: a Caveat to (Continental) Europe to Reconstruct its Labour Law. WP C.S.D.L.E. "Massimo D'Antona" .INT - 91/2012

The current debate taking place in continental Europe on the need to reform labour law to reduce the duality between labour market insiders and outsiders, thus giving new employment opportunities to young people seems to be, at its best, a consequence of the crisis, or at its worst, an excuse. The considerable emphasis placed on the power of legislation to reduce youth unemployment prevents real labour market problems from being clearly identified, thus reducing the scope to adopt more effective measures. Action is certainly required to help young people during the current crisis, yet interventions should not be exclusively directed towards increased flexibility and deregulation. This paper questions the “thaumaturgic power” wrongly attributed to legislative interventions and put forward a more holistic approach to solve the problem of youth employment, by focusing on the education systems, school-to-work transition and industrial relations. As a comparative analysis demonstrates, in order to effectively tackle the issue of youth employment, it is not enough to reform labour law. High quality education systems, apprenticeship schemes, efficient placement and employment services, cooperative industrial relations and flexible wage determination mechanisms are the key to success when it comes to youth employment, not only in times of recession.

Agricultural and Rural Labour Markets in the EU Candidate Countries of Croatia, Former Yugoslav Republic of Macedonia and Turkey. Factor Markets Working Paper No. 6, September 2011

This paper provides an overview and comparison of labour markets in agricultural and rural areas in the three candidate countries for the EU membership: Croatia, the Former Yugoslav Republic of Macedonia and Turkey. We analyse and compare the labour market structures and the factors driving them. The analyses are based on the available cross-section and time-series data on agricultural labour structures and living conditions in rural areas. Considerable differences are found among the candidate countries in the importance of the agricultural labour force, between rural and urban labour, and in poverty and living conditions in rural areas. Agricultural and rural labour market structures are the result of demographic and education processes, in addition to labour flows between agricultural and non-agricultural activities, from rural areas to urban ones and migration flows abroad. Declines in the agricultural labour force and rural population are foreseen for each of the candidate countries, but with significant variations between them. Showing different patterns over time, labour market developments in the sector and rural areas have been shaped by the overall labour market institutions, conditions and other factors in each country, such as the legal basis, educational attainment and migration flows, as well as the presence of non-agricultural activities in rural areas.

Labour Supply Curves for EU Member and Candidate States: An applied general equilibrium analysis. Factor Markets Working Paper No. 26, June 2012

This paper introduces a more sophisticated modelling of the labour market functioning of the European member and candidate states through the introduction of labour supply curves in an applied general equilibrium model. A labour supply curve offers a middle way in labour supply modelling, sitting between the two commonly adopted extremes of spare capacity and full employment. The first part of the paper outlines the theoretical foundation of the labour supply curve. Real world data is then used to derive labour supply curves for each member state, along with Croatia and Turkey. Finally, the impact of the newly specified labour markets on the results of an illustrative scenario involving reform of the common agricultural policy is explored. The results of computable general equilibrium analysis with the labour supply curve confirm the theoretical expectation that modelling the labour supply through an upwards-sloping curve produces results that lie between the extremes of spare capacity of the labour factor and fully employed labour. This specification captures a greater degree of heterogeneity in the labour markets of the member and candidate states, allowing for a more nuanced modelling of the effects of policy reform, including welfare effects.

Determinants to Leave Agriculture and Change Occupational Sector: Evidence from an Enlarged EU. Factor Markets Working Document No. 46, May 2013

The objective of this paper is to explore the determinants to leave agriculture and change occupational sector. We adopt a 3-step multivariate probit where we control for selection bias at two stages in the decisions to work and, at a later stage, exit agriculture. The analysis is based on the European Union Labour Force Survey data expanded with additional regional indicators. The main results suggest that younger individuals are more likely to leave farming activities, although the largest outflows of agricultural labour are mainly associated with the retirement of people. Self-employed and family workers are generally less likely to leave agriculture and those with low levels of educations are found to be significantly constrained in entering the non-farm economy. Moreover, labour market conditions at the regional level do matter for switching occupational sector. Differences in the results among the selected new member states and the EU-15 can be explained by the diverse production structures, suggesting different capacities to release and absorb labour.

Off-farm Labour Decision of Italian Farm Operators. Factor Markets Working Document No. 61, August 2013

This paper analyses the factors affecting off-farm labour decisions of Italian farm operators. Using micro-level data from the Farm Business Survey (REA) over the pre- and post-2003 CAP reform periods, we investigated the impact that operator, family, farm and market characteristics exert on these choices. Among other things, the paper focuses also on the differential impact of those variables for operators of smaller and larger holdings. The main results suggest that operator and family characteristics have a significant impact on the decision to participate in off-farm work more for smaller than for bigger farms. By contrast, farm characteristics are more relevant variables for bigger farms. In particular, decoupled farm payments, by increasing the marginal productivity of farm labour, lower the probability of working off the farm only in bigger farms, while coupled subsidies in pre-reform years do not have a significant impact on labour decisions. Finally, we show that, after accounting for the standard covariates, local and territorial labour market characteristics generally have a low effect on off-farm work operators’ choices.

Labour Mobility in the EU: Addressing challenges and ensuring ‘fair mobility’. CEPS Special Report No. 139, July 2016

Labour mobility creates economic benefits for the EU at large and the mobile workforce. The same can be said for the special case of posted workers – a form of labour mobility that is crucial to the functioning of the internal market for services. Moreover, the number of posted workers is set to grow if the single market is further deepened. However, regulating the cross-border posting of workers – and ensuring a notion of ‘fair mobility’ – also epitomises the inherent difficulties in squaring the differences of 28 different sets of labour market regimes and regulations with the freedom to provide services in situ. In addition, the regulation has to work effectively in countries with large differences in income levels and social policies. This paper reviews the state of play with regard to posted workers and spell out the trade-offs involved to be kept in mind when considering the targeted revision of the posted workers Directive.

ICT for growth: a targeted approach. Bruegel Policy Contribution 2012/10, June 2012

This Policy Contribution assesses the broad obstacles hampering ICT-led growth in Europe and identifies the main areas in which policy could unlock the greatest value. We review estimates of the value that could be generated through take-up of various technologies and carry out a broad matching with policy areas. According to the literature survey and the collected estimates, the areas in which the right policies could unlock the greatest ICT-led growth are product and labour market regulations and the European Single Market. These areas should be reformed to make European markets more flexible and competitive. This would promote wider adoption of modern data-driven organisational and management practices thereby helping to close the productivity gap between the United States and the European Union. Gains could also be made in the areas of privacy, data security, intellectual property and liability pertaining to the digital economy, especially cloud computing, and next generation network infrastructure investment. Standardisation and spectrum allocation issues are found to be important, though to a lesser degree. Strong complementarities between the analysed technologies suggest, however, that policymakers need to deal with all of the identified obstacles in order to fully realise the potential of ICT to spur long-term growth beyond the partial gains that we report.

Europe's growth problem (and what to do about it). Bruegel Policy Brief 2013/03, April 2013

The issue: The European Union's pre-crisis growth performance was disappointing enough, but the performance has been even more dismal since the onset of the crisis. Weak growth is undermining private and public deleveraging,and is fuelling continued banking fragility. Persistently high unemployment is eroding skills, discouraging labour market participation and undermining the EU’s long-term growth potential. Low overall growth is making it much tougher for the hard-hit economies in southern Europe to recover competitiveness and regain control of their public finances. Stagnation would reduce the attractiveness of Europe for investment. Under these conditions, Europe's social models are bound to prove unsustainable. Policy Challenge: The European Union's weak long-term growth potential and unsatisfactory recovery from the crisis represent a major policy challenge. Over and above the structural reform agenda, which vitally important, bold policy action is needed. The priority is to get bank credit going. Banking problems need to be assessed properly and bank resolution and recapitalisation should be pursued. Second, fostering the reallocation of factors to the most productive firms and the sectors that contribute to aggregate rebalancing is vital. Addressing intra-euro area competitiveness divergence is essential to support growth in southern Europe. Third, the speed of fiscal adjustment needs to be appropriate and EU funds should be front loaded to countries in deep recession, while the European Investment Bank should increase investment.

Money for structural reforms in the eurozone: making sense of contractual arrangements. Egmont Paper 57, May 2013

Executive Summary. Both the Commission’s proposal for a ‘Competitiveness and Convergence Instrument’ and the ‘contractual arrangement’ presented by President Van Rompuy share a common concept: associating EU money with national structural reforms under a binding arrangement. The targeted ‘structural reforms’ are the labour market reforms and product and services market reforms in eurozone ‘peripheral’ countries facing the most severe external imbalances. Their implementation would speed up and facilitate the ‘internal devaluation’ process of these countries. In the worst case scenario, failure to adopt the necessary reforms and to adjust wages and prices downwards may lead the most vulnerable countries to leave the eurozone under social and political pressure. Contracts seek to reduce this risk by increasing compliance with the country-specific recommendations for structural reforms issued by the EU institutions within the European Semester, and in particular with the Macroeconomic Imbalance Procedure (MIP). As for the financial support, it follows two different, albeit overlapping rationales. First, the perspective of obtaining EU funding would incentivize the governments of vulnerable countries to adopt reforms that would bear a high political and social cost in the short term. That is, without some form of incentive, it is unlikely that the necessary reforms would be undertaken and this could have significant negative consequences for the EMU as a whole. The second rationale amounts to outright solidarity: EU support is needed to cushion the inevitable socio-economic costs implied not only by the structural reform, but also by the internal devaluation taking place. To make sense of contractual arrangements, some points should be considered in future discussions: 1. Contracts on a voluntary basis only: Contracts cannot be mandatory unlike initially suggested in the Van Rompuy report. This stems not only from the inherent definition of a ‘contract’ – where mutual consent is key – but also from the non-binding nature of the preventive arm of the MIP. Making the country-specific recommendations issued by the EU institutions systematically binding would imply transfers of sovereignty from the national to the EU level that go well beyond the present discussion. Instead, contracts would introduce the possibility of making the preventive arm binding for some countries where corrections are most needed and urgent for the EMU as a whole.

Could European Governance Ideas Improve Federal-provincial Relations in Canada? EDAP 6/2013

Over the past seventeen years Canada has decentralized many social programmes, moving responsibility from the federal government to 13 provinces and territories through bilateral federal-provincial agreements. In contrast, the European Union (EU) has moved in the opposite direction, building pan-European approaches and establishing new processes to facilitate multilateral collaboration among the 28 EU member states. This has been done through a new governance approach called the Open Method of Coordination (OMC). Using a detailed case study − employment policy − this paper explores whether Canada could learn from OMC governance ideas to re-build a pan-Canadian dimension to employment policy and improve the performance of its intergovernmental relations system. Concrete lessons for Canada to improve decentralized governance are suggested: consolidating the different bilateral agreements; using benchmarking instead of controls in fiscal transfers; undertaking research, analysis, and comparisons in order to facilitate mutual learning; revitalizing intergovernmental structures in light of devolution; and engaging social partners, civil society and other stakeholders. Post-devolution Canada is not doing badly in managing employment policy, but could do better. Looking to the EU for ideas on new ways to collaborate provides a chance for setting a forward looking agenda that could ultimately result not only in better labour market outcomes, but also improvements to one small part of Canada’s often fractious federation.

Memo to Merkel: Post-election Germany and Europe. Bruegel Policy Brief 2013/05, 24 September 2013

Recent economic data points to the seeds of an economic recovery in the European Union. However, significant risks remain and bold policies are still needed. There are three central risks. Competitiveness adjustment is incomplete, casting doubt on the sustainability of public debt. Banking remains unstable and fragmented along national lines, resulting in unfavorable financial conditions, which further erode growth, job creation and competitiveness. Rising unemployment, especially among the young, is inequitable, unjust and politically risky. Germany has a central role to play in addressing these risks. The new German government should work on three priorities: Domestic economic policy should be more supportive of growth and adjustment, with higher public investment, a greater role for high-value added services, and more supportive immigration policy. Germany should support a meaningful banking union with a centralised resolution mechanism requiring a transfer of sovereignty to Europe for all countries including Germany. The establishment of a private investment initiative combined with a European Youth Education Fund and labour market reforms should be promoted. Building on these priorities, a significant deepening of the euro area is needed, with a genuine transfer of sovereignty, stronger institutions and democratically legitimate decision-making structures in areas of common policy.

Extending working life in Finland. CEPS Working Document No. 387, 22 November 2013

This report reviews national and private initiatives to allow the elderly to continue their participation in the Finnish labour market and provides an analysis of the labour market and living conditions of seniors. We are interested in how those over 50 can be engaged in various forms of employment and lifelong learning. We find strong evidence that Finland generally provides good institutional conditions for active ageing. The quick and early ageing process was tackled by the fundamental pension reform that already prolonged retirement substantially and will probably facilitate later retirement as the attitudes concerning retirement change. On the other hand, Finland still seems to lag behind the other Nordic welfare states, has considerable problems in providing the same health conditions to low educated people in physically demanding occupations and could - – with respect to family pension in particular – invest further efforts in reforming the pension system. While many of the reforms Finland has conducted seem to be favourable and transferable to other European countries that still face the steepest phases of ageing in their societies, a reluctance towards changing attitudes that we observe in Finland, shows that organizing active ageing is a long-term project.

Many worlds of the ‘low-skilled’, but only one generic policy. CEPS Policy Brief No. 312, 10 January 2014

This paper, which draws on research findings from the NEUJOBS project, encourages EU and national policy-makers to invest in a more comprehensive view of the phenomenon of ‘low-skilledness’. The ‘low-skilled’ label can hide a number of different scenarios: labour market detachment, migration and obsolete skills that are the result of macroeconomic structural changes. For this reason, the authors argue that it is necessary to promote lifelong learning to allow workers to keep pace with new technologies and to shield workers from the risk of skills obsolescence and detachment from the labour market.

Future of skills in Europe-Convergence or polarisation? CEPS Working Document No. 390, 27 February 2014

In this Working Paper, based on nearly 20 papers produced by the Centre for European Policy Studies, Slovak Governance Institute and the Conference Board Europe, we examine whether the current trends in the areas of education and skills are pushing the European Union, towards convergence or polarisation. We cover a wide range of questions related to this main issue. No easy answers, but several cross-cutting messages emerged from the research. We demonstrated that there is increasing complexity in what a ‘low-skilled’ person is and how well (or poorly) s/he fares in the labour market. There are undoubtedly powerful forces pushing for more polarisation, particularly in the labour market. Our research confirmed that early childhood education plays an important role, and it also appears to be increasingly uncontested as a policy prescription. However, the other frequently emphasised remedy to inequality – less selection in secondary education, particularly later division of children into separate tracks – is more problematic. Its effectiveness depends on the country in question and the target group, while education systems are extremely difficult to shift even on a long-term basis. A different, more-nuanced type of warning to policy-makers is delivered in our research on returns to higher education by field of study, which showed hidden rationality in how students choose their major.

A success story for the EU and seasonal workers’ rights without reinventing the wheel. EPC Policy Brief, 28 March 2014

Despite the economic crisis with resulting high unemployment, EU economies face vacancies across the skill spectrum. At the low end there is a structural need when it comes to seasonal work. The Seasonal Workers Directive was launched at the same time as the Inter-Corporate Transferees (ICTs) Directive in 2010 – as part of the Commission’s 2005 Policy Plan on Legal Migration – and initially appeared to be more troublesome, with the stigma of ‘migrants stealing local jobs’ haunting it. However, without the provisions for intra-EU mobility that have plagued the ICTs Directive, the Seasonal Workers Directive became less problematic despite the fact that seasonal workers are more numerous than intra-corporate transferees. This Policy Brief looks at how negotiating parties ensured a focus not only on the needs of the European labour market, but also saw an opportunity to bring added value to seasonal workers’ rights, through equal treatment to EU nationals. It assesses the final outcome of three and a half years of intra-EU negotiation, looking at the rights gained for seasonal migrants, the level of harmonization achieved, and the future of migration policy with the strategic guidelines for the area of freedom, security and justice in mind.