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Employment and Social Developments in Europe 2014
Chart 33: Employment impacts of policy mix support to young people in Italy
Simulation with DG EMPL’s Labour Market Model: lowering employers’ social contributions for young workers
(15–24 years), combined with tertiary education scholarships for tertiary education (20–24 years), Italy.
Magnitude: 0.05 % of GDP each — employment effects
1.6 1.6
1.2 1.2
0.8 0.8
% %
0.4 0.4
0.12 0.12 0.05
0 0
-0.05
-0.4 -0.4
All Young All Low-skilled Medium-skilled High-skilled
Source: Own calculations based on DG EMPL’s Labour Market Model.
5. Conclusions higher education is rapidly increasing. maintenance of human capital is decisive
Various reports suggest that demand in avoiding skill depreciation.
Demographic trends and globalisation for better educated people will continue
are considered among the major chal- to be strong in future decades, par- Finally, the chapter argues that stronger
lenges that threaten a job-rich and inclu - ticularly for expanding businesses ( ). supply of highly skilled workers, com-
142
sive growth in the EU over the long run. The analysis, including macro-model bined with a focus on human capital
In the absence of the demographic divi- simulation, adds to the evidence that maintenance through training and
dend from which the EU has benefited the supply of a highly-educated work- health policies, will not suffice to ensure
in the past, ensuring positive prospects force represents a necessary condition future sustainable and inclusive growth.
for economic growth and social welfare for achieving higher productivity and Labour market inactivity, weak labour
in Europe requires increased productivity stronger economic growth. Hence recent market attachment, skill mismatch and
and a better utilisation of labour capacity. progress in Member States towards the underutilisation of women’s employ-
Europe 2020 objective of increasing the ment potential all represent a waste
Investment in human capital is crucial to share of tertiary educated people aged of resources in the form of unused
supporting productivity gains and ensur - 30 to 34 years to 40 % is encouraging. human capital, which needs to be miti-
ing that future growth is both job-rich gated by appropriate public policies. In
and inclusive. Effective human capital At the same time, and especially given particular, the changing skills profile of
investment must be understood not only the current demographic situation and our economies must be supported by
in terms of forming skills through the projections, the EU cannot afford to rely comprehensive skills-strategies to fully
education and training of individuals, but solely on the supply of highly skilled realise its potential.
also as the creation of the policy and people newly entering labour markets.
institutional frameworks that can help As the whole society and its workforce Integrated policy approaches targeted at
individuals maintain and use their skills. continues ageing and the relative con- all three aspects of human capital devel-
tribution of older people to the economy opment — skills formation, maintenance
This chapter has illustrated the impor- and society increases, policy makers and use — are crucial for strengthening
tance of various elements of a support- must pay more attention to mobilising EU competitiveness and for sustaining its
ive policy and institutional mix for the and optimising existing human resources. social welfare model. But the relationship
formation of human capital, including Maintaining human capital is mainly runs both ways, as this chapter repeat-
accessible and affordable good qual - dependent on provision of lifelong learn - edly demonstrates. Functioning welfare
ity early childhood care and education, ing and continuous vocational training, systems and, in particular, well-designed
which reduces generational transmission together with investment in health and social investments, are paramount if
of social-inequalities. other policies to support longer working Europe is to continue to benefit from
lives. This chapter particularly highlights its main competitive advantage in the
Similarly, at the other end of the initial the complementary roles of the public international markets — highly skilled
formation spectrum, the importance of and private sectors and shows how the and productive human capital.
( ) For example: CEDEFOP (2012).
142
130
Chart 33: Employment impacts of policy mix support to young people in Italy
Simulation with DG EMPL’s Labour Market Model: lowering employers’ social contributions for young workers
(15–24 years), combined with tertiary education scholarships for tertiary education (20–24 years), Italy.
Magnitude: 0.05 % of GDP each — employment effects
1.6 1.6
1.2 1.2
0.8 0.8
% %
0.4 0.4
0.12 0.12 0.05
0 0
-0.05
-0.4 -0.4
All Young All Low-skilled Medium-skilled High-skilled
Source: Own calculations based on DG EMPL’s Labour Market Model.
5. Conclusions higher education is rapidly increasing. maintenance of human capital is decisive
Various reports suggest that demand in avoiding skill depreciation.
Demographic trends and globalisation for better educated people will continue
are considered among the major chal- to be strong in future decades, par- Finally, the chapter argues that stronger
lenges that threaten a job-rich and inclu - ticularly for expanding businesses ( ). supply of highly skilled workers, com-
142
sive growth in the EU over the long run. The analysis, including macro-model bined with a focus on human capital
In the absence of the demographic divi- simulation, adds to the evidence that maintenance through training and
dend from which the EU has benefited the supply of a highly-educated work- health policies, will not suffice to ensure
in the past, ensuring positive prospects force represents a necessary condition future sustainable and inclusive growth.
for economic growth and social welfare for achieving higher productivity and Labour market inactivity, weak labour
in Europe requires increased productivity stronger economic growth. Hence recent market attachment, skill mismatch and
and a better utilisation of labour capacity. progress in Member States towards the underutilisation of women’s employ-
Europe 2020 objective of increasing the ment potential all represent a waste
Investment in human capital is crucial to share of tertiary educated people aged of resources in the form of unused
supporting productivity gains and ensur - 30 to 34 years to 40 % is encouraging. human capital, which needs to be miti-
ing that future growth is both job-rich gated by appropriate public policies. In
and inclusive. Effective human capital At the same time, and especially given particular, the changing skills profile of
investment must be understood not only the current demographic situation and our economies must be supported by
in terms of forming skills through the projections, the EU cannot afford to rely comprehensive skills-strategies to fully
education and training of individuals, but solely on the supply of highly skilled realise its potential.
also as the creation of the policy and people newly entering labour markets.
institutional frameworks that can help As the whole society and its workforce Integrated policy approaches targeted at
individuals maintain and use their skills. continues ageing and the relative con- all three aspects of human capital devel-
tribution of older people to the economy opment — skills formation, maintenance
This chapter has illustrated the impor- and society increases, policy makers and use — are crucial for strengthening
tance of various elements of a support- must pay more attention to mobilising EU competitiveness and for sustaining its
ive policy and institutional mix for the and optimising existing human resources. social welfare model. But the relationship
formation of human capital, including Maintaining human capital is mainly runs both ways, as this chapter repeat-
accessible and affordable good qual - dependent on provision of lifelong learn - edly demonstrates. Functioning welfare
ity early childhood care and education, ing and continuous vocational training, systems and, in particular, well-designed
which reduces generational transmission together with investment in health and social investments, are paramount if
of social-inequalities. other policies to support longer working Europe is to continue to benefit from
lives. This chapter particularly highlights its main competitive advantage in the
Similarly, at the other end of the initial the complementary roles of the public international markets — highly skilled
formation spectrum, the importance of and private sectors and shows how the and productive human capital.
( ) For example: CEDEFOP (2012).
142
130
