the impact of the european youth employment policies before and during the crisis: a comparison in...

Orestis Papadopoulos

The impact of the European youth employment policies before and during the crisis: A comparison in Greece and

Ireland

Keele University

Objectives

• Analyse the relationship between the European Employment Strategy (EES) and the policies for tackling youth unemployment in Greece and Ireland.

• Sheds light on how the economic crisis has affected youth employment policies in Greece and Ireland.

• Is there any convergence towards a supply-side policy paradigm?

Argument

• The ‘soft law’ nature of the EES allowed member states to deviate their employment policies from the EES.

• The contrasting institutional settings of Greece and Ireland will produce different responses to EU policy guidelines.

• The pre-crisis divergence is likely to be reduced due to the extensive use of neo-liberal measures and incremental institutional change at EU.

European Employment Strategy and youth unemployment

• Introduction of flexible labour market arrangements (promotion of part-time work and entry-wage for young)

• Active labour market policies and welfare state reforms with emphasis on activation and conditionality of benefits

• Protecting people’s transitions within the labour market rather than people’ jobs

Key Literature and theories

• The implementation of European policies will be dependent on the fit-misfit of the members’ states institutional arrangements with the basic assumptions of the EU policies (Börzel and Risse, 2003).

• Higher levels of EES implementation in countries where the existing institutional framework provides complementarities for applying a flexicurity approach.

Institutional Theories: Greece

Greece has been conceptualized by the VoC

• As a state capitalist model (SCM) characterized by state-mediation of the economic and social activities (Schmidt 2002).

• As a Southern European Capitalism, characterized by the regulatory role of the state and increased institutional complementarities directed towards welfare and education (Amable, 2003).

• As a Mixed Market economy (MME) (Molina and Rhodes, 2005) characterized by organizational stability and institutional complementarities but less coordinated and much more fragmented than the CMEs.

Institutional Theories: Greece • High level of Employment Protection Legislation (EPL), but also

high informality, fragmentation and duality of labour market.

• Youth labor market has been dominated by very flexible arrangements, violation of labor rights, and high precariousness and insecurity for young workers (Kretsos, 2014, p: 38).

• Development of social dialogue and consensus discourse but still limited social concertation and opportunities for social pacts.

Institutional Theories: Greece

• Four main unemployment welfare regimes (sub-protective, liberal/minimal, employment-centred, and universalistic) differentiated based on: coverage, level of compensation, and expenditure on ALMPs (Gallie and Paugman (2000).

• The Greek system has been categorized as a sub-protective type; due to absence of any social protection for young unemployed and low expenditure on vocational training and activation policies (Gallie and Paugman, 2000; Papadopoulos, 2006).

Institutional Theories: Ireland

• Ireland has been categorized as a liberal market economy (LME) due to the affiliation of the Irish socioeconomic structures with typical features of an LME such as less strict Employment Protection Legislation both for regular and temporary employment (Voss and Dornelas, 2011, p: 23).

• Ireland is characterized by a flexible youth labor market as lower wages for young people under the age of 21 years and new entrants constitute a significant pillar of the youth employment landscape.

• Neo-corporatist features such as coordinated tripartite industrial relations arrangements.

• Supply-side corporatism’ supplemented by a peculiar institutional complementarity between social partnership, economic openness and lean welfare state supported by wage moderation and economic growth (Regan, 2011).

Institutional Theories: Ireland

• Ireland as a typical example of the Liberal type of welfare state, characterized by minimum social benefits, modest redistribution of incomes, and strict entitlement criteria of social benefits.

• But, the expenditure on ALMP and vocational and training polices and the impact of poverty alleviation social transfers have been much higher in Ireland than in the UK (Amable, 2003, Gallie and Paugman, 2000).

• The youth unemployment regime can therefore be characterized as “inclusive” as there is social protection (means-tested) and ALMPs for young unemployed people, while the labor market arrangements provide high levels of flexibility (Cinalli & Giugni, 2013, p: 292-293).

Research Assumptions

• Greek institutional elements will function as deterrents to the implementation of the flexicurity approach

• The EES is expected to have greater impact on the Irish youth employment policies due to their proximity with basic ideational elements of the EES.

Methods• Total number of 28 with national actors responsible for youth employment policy

• Trade unions: GSEE, PAME, SIPTU, ICTU

• Employers organizations: IBEC, SEV, ISME, GSEVEE, ESEE

• Public agencies: Department of Education, FAS, NASC, Dublin Employment Pact, OKE, OAED

• Research Institutes: ESRI, IOVE, EKKE

• Documentary research such as European Union and national governments’ policy documents,

Findings for pre-crisis period: Greece

EU recommendations to Greece included:

• Active labor market policies (2001),

• Increase labor market flexibility through recourse to part-time and nonstandard employment contracts and tackling early school leaving (2004),

• Educational and vocational training reforms, and introduction of social protection for young people throughout the transition periods (2008).


Actions towards flexicurity

• Reduction of social security contributions for low paid workers

• The introduction of employment programs focused on either social contributions subsidies or training-based options (‘One start-One Opportunity’)

• The easing of access to part-time work and the restructuring of vocational training (creation of the Manpower Employment Organization’s (OAED) centres aimed at providing individualized assistance to young unemployed people)

• Stimulating the reintegration of the young unemployed into the labour market through the conversion of unemployment benefits into employment subsidies


• No concrete action towards flexicurity, trade unions didn’t participate in social dialogue relating to the flexicurity agenda.

• Limited reduction of EPL, informality and duality remained basic features of the labour market

• Greece remained one of the countries without income support for new entrants to the labor market or young unemployed without sufficient social contributions

• The activation rate for young people under 25 in 2007 (32%) was lower than that in 1999 (39.7%), while the expenditure on activation as a share of Labour Market Policies (ALMP) was significantly lower in 2005 (14.41%) when compared with 1995 (49.44%).


• The pre-crisis dualistic labor market regime in combination with the traditionally low social protection regime (sub-protective) provided little space for flexicurity policies.

• The available data also show that Greece remained one of the countries without income support for new entrants to the labor market or young unemployed (Matsaganis, 2011, p: 508-509).

Findings for pre-crisis period Ireland

EU recommendations to Ireland

• Tackling early school-leaving and stronger ALMPs (2004)

• Investments in education and training (2001)

• An emphasis on life-long learning and in-company training (2008).


• Some basic features of the EES and flexicurity had been incorporated into the Irish youth employment policies much earlier than 1997.

• The implementation of preventative active labour market policies in Ireland started before the European Employment Strategy.

• Available data show that Ireland scored very high in active labour market expenditure as in 1995 the total expenditure amounted to 1.7 per cent much higher than both the OECD (0.8) and European Union (1.1) average (Clarke, 2000).


• The Local Training Initiative (formal training and work experience) was introduced for addressing mostly the local needs of young people between 16 and 25 years of age (Grubb et al., 2009, p: 12).

• Community Training Centers (CTCs) have been designed for providing training in subjects such as Maths, English and computing to early school leavers aged from 16-21 (NFQ) (European Employment Observatory, 2011, p: 21).

• The provision of vocational training in a variety of occupational areas such as construction, clothing, management, and engineering was facilitated by the Specific Skills Training (work experience) (Grubb et al., 2009, p: 112).


• Introduction of the lifecycle approach: access to employment, skills, conditional income support and secure transitions are combined (Towards 2016, 2006).

• Increase in social expenditure and income maintenance for young people.

• High expenditure on ALMPs as a share of LMP (41.40 in 2005), the high ALMPs expenditure per unemployed (27.37 in 2005) and the high expenditure on ALMPs (0.9 in 2009).

Post-crisis EU institutional changes

• Labour market reforms are imposed on member states as a condition for receiving financial support (Bekker, 2013, p: 9).

• Emphasis placed by the EU (The Euro Plus Pact, 2011) on sound budgets and supply-side measures.

• The implementation of austerity measures has seriously endangered the fiscal capacity of states to implement social protection and training schemes.

Findings for post-crisis: Greece• Supply-side focus of policies and attack on young people’

employment rights

• Reduction by 32 per cent for all young people under 25, promotion of flexible employment contracts with the reduction of part-time pay

• Increase in the number of collective dismissals within one month (Article 74(1) Act 3863/2010), promotion of flexible employment contracts with the reduction of part-time pay (Act 3846/2010), extension of short-term and fixed-term work (Act 3846/2010 and Act 3986/2011), and derogation of the company level agreements from sectoral and collective (3845/2010).

Findings for post-crisis: Greece• The Greek government introduced some early interventions such as the “Special

New Jobs Programme,” which aimed to subsidize the social contributions of 40000 unemployed people during their first 4 years of employment (EEO, 2010a).

• In 2012, the Greek government also introduced short-term schemes on community employment (55 000 people) and new traineeship schemes.

• In 2013 Greece introduced an EU-funded youth Guarantee scheme (of a total value of 260 million Euros) following the recommendations of the European Commission.

• As a director from the Manpower Employment Organization (OAED) commented, “the EU emphasis on training, activation and employment growth has been undermined especially since the crisis as most measures are supply-side, short-term and under-funded’’.

Findings for post-crisis Ireland

• The Irish government, under the severe pressures imposed by the Troika, introduced significant cuts to the Jobseekers Allowance benefits for new entrants aged under 25 years

• The consensus on flexicurity has been broken down, employers are explicitly focusing on social protection reductions.

Findings for post-crisis Ireland• The government launched a Social Insurance Exemption Scheme

of total cost of 36 million for helping businesses to employ redundant workers being unemployed for more than six months

• The work placement scheme was also introduced with the objective to provide incentives to firms in order to recruit young unemployed people for a period of nine months

• The Irish government invested 25 million Euros in the Youth reach program, where vocational training and work experience was to be provided to 3700 young people by the end of 2013

Findings for post-crisis Ireland• These measures were of limited scale considering the high number of

young unemployed people and they signified a shift away from the pre-crisis ALMPs targeting the labor market integration of young people

• ‘The main weakness is the scale. Under the Memorandum agreements the State is not free to invest money while sanctions towards unemployed people have considerably increased’. (Services Industrial Professional and Technical Union (SIPTU),

• While in the pre-crisis period, social protection for young people was strengthened through increases in welfare benefits, during the crisis, the dominant political discourse has focused on the need to reduce welfare dependency and cut social services

Conclusions

• The institutional elements of the two ‘models’ determined the implementation of the EU employment policies in the pre-crisis period

• Different degree of convergence-divergence between the pre- and post-crisis periods supports the assumption that the impact of the institutional settings was diminished since the crisis

Conclusions

• Since the financial crisis the neo-liberal policy ideas have prevailed in the two countries, with a significant decline of social protection and training policies.

• Internationally imposed measures and hard-law enforcement mechanisms adopted by the EU placed higher implementation pressures than the soft-law and non-binding character of the EES.

Conclusions

• The characteristics of the Greek youth regime rendered the flexicurity discourse highly inapplicable

Conclusions

• Specifically, in Ireland, the activation and means-tested “logic” of the minimal-liberal yet inclusive youth employment regime, together with flexibility in the labor market, have facilitated an easier understanding of, and agreement over, flexicurity and EES policy ideas. The high expenditure on ALMPs, the increase in social expenditure, and the consolidation of training and up-skilling programs signified the emergence of a pre-crisis convergence between the EES recommendations and Irish youth employment policies

Conclusions • The research findings support the argument that the post-crisis

youth employment policies imposed by the Troika overlook the national institutional features of youth unemployment and impose a very strict austerity and neo-liberal framework within which any pre-crisis national institutional configuration or fit-misfit hypothesis are diluted (Clauwart and Schomann, 2012). Hence, contrary to the assumptions made by previous research (Lallement, 2011; Hardiman and MacCarthaigh, 2013; Kornelakis, 2013) that institutional settings will yield different responses to liberalization pressures, the article provides supporting evidence that both Greece and Ireland have adopted similar neo-liberal youth employment policies under the significant pressures imposed on them by the EU and the Memorandum Agreements.