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Employment and Social Developments in Europe 2014
to cover unemployment benefit and through promoting more adaptability in Despite long-standing EU-wide policy
minimum income provisions. These the labour markets, reducing scarring actions, obstacles such as adminis-
could contribute to ensuring the provi- effects and avoiding social dumping. trative, language and housing issues
sion of adequate income support dur- can still remain, while some obstacles
ing unemployment, backed by effective 3.3.3. Strengthening the addressed by EU policies on employ-
activation support, for instance through contribution of EU employment ment and social protection, such as
high levels of coverage of benefits (for and social policies to short- improving job matching capacity across
instance, through minimum duration term stabilisation borders, coordination of social security
of unemployment benefits, levels of schemes and mutual recognition of
potential coverage of the employed The above analysis underlines that qualifications , can persist.
74
population ( ) and of access to active labour mobility remains low in Europe,
labour market policies). Other propos- notably in the euro area (see Section Looking forward, remaining obstacles
als have also been made in support 2.1), and that a euro-area fiscal capacity to mobility and better mobility for EU
of minimum income guarantees based would have the potential to smooth the citizens could be reduced, notably as
on minimum levels of resources (pos- adjustment path and mitigate adverse regards the remaining barriers beyond
sibly including incomes and assets), hysteresis effects following an asym- language skills and housing regula-
75
83
notably for child benefits ( ), as well metric temporary shock (see Section 2.2). tions ( ), such as for instance in the area
as for pensions, all of which could of social security coordination, but also
also strengthen mobility and may also The Blueprint for a Deep and Genuine as regards the improvement in match-
78
translate into transfers that could par- Economic and Monetary Union ( ) under- ing cross-border employment policies,
tially offset the potentially negative lined that the creation of an EMU-wide for example, improving the recognition
impacts of increased mobility on the fiscal capacity should be considered as of qualifications and implementing and
sustainability of welfare systems. a long-term step to improve the stabi- enforcement EU laws in the fight against
lisation of EMU economies, in particular undeclared work.
A debate has also developed on the in the case of asymmetric (temporary)
merits of common standards for shocks, as well as the need to proceed Unemployment and fiscal
minimum wages, typically expressed in parallel with a process of politi- capacity
as a fraction of the median national cal integration.
wage ( ), based on the argument that Three forms of fiscal capacity linked to
76
well calibrated common standards of Supporting labour mobility unemployment and providing additional
minimum wages would support the short term stabilisation are most com-
labour market income of the lowest Geographical labour mobility can bring monly discussed in academic circles (see
84
paid workers, without entailing nega- substantial benefits to workers, as well Box 5) ( ):
tive effects on unemployment ( ). It is as destination and origin countries, so
77
argued that common minimum wage long as potential negative side effects • transfer systems (leading to budg-
standards in the EMU (or EU) would such as brain drain or the impact on the etary flows in case of specific pre-
help anchor national wage-setting sustainability of public finances are mon - determined circumstances);
systems and avoid countries being itored and addressed. The main driver
tempted to compete on low-paid, low- of mobility between EU Member States • reinsurance systems (that provide
79
quality, low-productivity jobs, and risk is seen to be work opportunities ( ), national unemployment systems
social dumping, while they could also which helps in explaining why mobility some reinsurance of their cyclical
contribute to stronger stabilisation between euro area Member States has deficits);
80
and possibly to some rebalancing of been limited ( ), while in contrast, the
internal demand in countries where it current significant differences in unem- • EMU-wide unemployment benefit
is relatively weak. ployment rates may increasingly act as systems (that partially pool fiscal
82
81
a push factor ( ) ( ). risks of short-term unemployment
These different types of benchmarks or changes).
standards, could contribute to ‘a grad-
78
ual and monitored process of structural ( ) See European Commission (2012b) and To help plug the many gaps in the analy -
the mission letter of V. Dombroskis notably
convergence, ensuring all countries mentioning the pursuit of the ‘work of the sis of such supranational schemes (see
are well equipped to reap the full eco- “Four Presidents’ report” and the Commission Box 5), the European Commission has
Blueprint for a Deep and Genuine Economic
nomic gain from their participation in and Monetary Union, integrating the social commissioned a study on the feasibility
the EMU’ (Von Rompuy, 2014), notably dimension’. and added value of a European unem-
( ) Family reasons and the wish to study abroad ployment benefit scheme, following a
79
also play a role, Eurostat (LFS, 2008 ad-hoc
( ) See, for instance, ILO (2014), notably module).
74
Annexes II and III. ( ) European Commission, ESDE 2013, Chapter
80
( ) See, for instance Atkinson (2013), and Levy 5, Box 3, p. 284.
75
et al. (2013). ( ) European Policy Centre, Making progress ( ) As regards the simplification of housing
81
83
76
( ) See, for instance, the May 2013 French– towards the completion of the single regulations, see OECD (2012, 2014b).
German contribution for a stronger Europe European labour market, Issue paper No 75, ( ) See, for instance, Bertelsmann Stiftung
84
of stability and Growth FR and DE and May 2013. (2014) and Conference, Economic shock
the interview of J.C. Juncker and M. Schultz ( ) While differences in welfare systems or absorbers for the Eurozone. Deepening the
82
th
on May 7 2014 to El Pais, La Stampa, regimes (i.e. restrictions during the transitional debate on automatic stabilizers (2014).
Le Monde, Süddeutsche Zeitung and arrangements phase) appear to have limited http://www.bertelsmann-stiftung.de/cps/rde/
The Guardian. influence on the direction and distribution xchg/SID-B776DEF6-96A5BBCD/bst_engl/
77
( ) See, for instance, Brischoux et al. (2014). of flows. See notably OECD (2012b). hs.xsl/nachrichten_121747.htm
230
to cover unemployment benefit and through promoting more adaptability in Despite long-standing EU-wide policy
minimum income provisions. These the labour markets, reducing scarring actions, obstacles such as adminis-
could contribute to ensuring the provi- effects and avoiding social dumping. trative, language and housing issues
sion of adequate income support dur- can still remain, while some obstacles
ing unemployment, backed by effective 3.3.3. Strengthening the addressed by EU policies on employ-
activation support, for instance through contribution of EU employment ment and social protection, such as
high levels of coverage of benefits (for and social policies to short- improving job matching capacity across
instance, through minimum duration term stabilisation borders, coordination of social security
of unemployment benefits, levels of schemes and mutual recognition of
potential coverage of the employed The above analysis underlines that qualifications , can persist.
74
population ( ) and of access to active labour mobility remains low in Europe,
labour market policies). Other propos- notably in the euro area (see Section Looking forward, remaining obstacles
als have also been made in support 2.1), and that a euro-area fiscal capacity to mobility and better mobility for EU
of minimum income guarantees based would have the potential to smooth the citizens could be reduced, notably as
on minimum levels of resources (pos- adjustment path and mitigate adverse regards the remaining barriers beyond
sibly including incomes and assets), hysteresis effects following an asym- language skills and housing regula-
75
83
notably for child benefits ( ), as well metric temporary shock (see Section 2.2). tions ( ), such as for instance in the area
as for pensions, all of which could of social security coordination, but also
also strengthen mobility and may also The Blueprint for a Deep and Genuine as regards the improvement in match-
78
translate into transfers that could par- Economic and Monetary Union ( ) under- ing cross-border employment policies,
tially offset the potentially negative lined that the creation of an EMU-wide for example, improving the recognition
impacts of increased mobility on the fiscal capacity should be considered as of qualifications and implementing and
sustainability of welfare systems. a long-term step to improve the stabi- enforcement EU laws in the fight against
lisation of EMU economies, in particular undeclared work.
A debate has also developed on the in the case of asymmetric (temporary)
merits of common standards for shocks, as well as the need to proceed Unemployment and fiscal
minimum wages, typically expressed in parallel with a process of politi- capacity
as a fraction of the median national cal integration.
wage ( ), based on the argument that Three forms of fiscal capacity linked to
76
well calibrated common standards of Supporting labour mobility unemployment and providing additional
minimum wages would support the short term stabilisation are most com-
labour market income of the lowest Geographical labour mobility can bring monly discussed in academic circles (see
84
paid workers, without entailing nega- substantial benefits to workers, as well Box 5) ( ):
tive effects on unemployment ( ). It is as destination and origin countries, so
77
argued that common minimum wage long as potential negative side effects • transfer systems (leading to budg-
standards in the EMU (or EU) would such as brain drain or the impact on the etary flows in case of specific pre-
help anchor national wage-setting sustainability of public finances are mon - determined circumstances);
systems and avoid countries being itored and addressed. The main driver
tempted to compete on low-paid, low- of mobility between EU Member States • reinsurance systems (that provide
79
quality, low-productivity jobs, and risk is seen to be work opportunities ( ), national unemployment systems
social dumping, while they could also which helps in explaining why mobility some reinsurance of their cyclical
contribute to stronger stabilisation between euro area Member States has deficits);
80
and possibly to some rebalancing of been limited ( ), while in contrast, the
internal demand in countries where it current significant differences in unem- • EMU-wide unemployment benefit
is relatively weak. ployment rates may increasingly act as systems (that partially pool fiscal
82
81
a push factor ( ) ( ). risks of short-term unemployment
These different types of benchmarks or changes).
standards, could contribute to ‘a grad-
78
ual and monitored process of structural ( ) See European Commission (2012b) and To help plug the many gaps in the analy -
the mission letter of V. Dombroskis notably
convergence, ensuring all countries mentioning the pursuit of the ‘work of the sis of such supranational schemes (see
are well equipped to reap the full eco- “Four Presidents’ report” and the Commission Box 5), the European Commission has
Blueprint for a Deep and Genuine Economic
nomic gain from their participation in and Monetary Union, integrating the social commissioned a study on the feasibility
the EMU’ (Von Rompuy, 2014), notably dimension’. and added value of a European unem-
( ) Family reasons and the wish to study abroad ployment benefit scheme, following a
79
also play a role, Eurostat (LFS, 2008 ad-hoc
( ) See, for instance, ILO (2014), notably module).
74
Annexes II and III. ( ) European Commission, ESDE 2013, Chapter
80
( ) See, for instance Atkinson (2013), and Levy 5, Box 3, p. 284.
75
et al. (2013). ( ) European Policy Centre, Making progress ( ) As regards the simplification of housing
81
83
76
( ) See, for instance, the May 2013 French– towards the completion of the single regulations, see OECD (2012, 2014b).
German contribution for a stronger Europe European labour market, Issue paper No 75, ( ) See, for instance, Bertelsmann Stiftung
84
of stability and Growth FR and DE and May 2013. (2014) and Conference, Economic shock
the interview of J.C. Juncker and M. Schultz ( ) While differences in welfare systems or absorbers for the Eurozone. Deepening the
82
th
on May 7 2014 to El Pais, La Stampa, regimes (i.e. restrictions during the transitional debate on automatic stabilizers (2014).
Le Monde, Süddeutsche Zeitung and arrangements phase) appear to have limited http://www.bertelsmann-stiftung.de/cps/rde/
The Guardian. influence on the direction and distribution xchg/SID-B776DEF6-96A5BBCD/bst_engl/
77
( ) See, for instance, Brischoux et al. (2014). of flows. See notably OECD (2012b). hs.xsl/nachrichten_121747.htm
230
