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Labor Market Policies and Outcomes: Cross Country Evidence for the EU-27

Rovelli, Riccardo,Bruno, Randolph

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Rovelli, Riccardo; Bruno, Randolph Working Paper Labor Market Policies and Outcomes: Cross Country Evidence for the EU-27 Quaderni - Working Paper DSE, No. 614 Provided in Cooperation with: University of Bologna, Department of Economics Suggested Citation: Rovelli, Riccardo; Bruno, Randolph (2007) : Labor Market Policies and Outcomes: Cross Country Evidence for the EU-27, Quaderni - Working Paper DSE, No. 614, Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE), Bologna, https://doi.org/10.6092/unibo/amsacta/4636 This Version is available at: https://hdl.handle.net/10419/159455 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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9 8($     A     "#   "# ' =$         (      D   " $  9    (  "C(  '(   <  D     "#%& 9 ( (  (  >(''?)"@$$5-  4  =  ( 9 %      "#  $        ='$(  '$(     $ '       "#  @    $     $   '       * = $ (        (       '$  ' <'9(=@(9      (  "#$         @ 4  (    ' <$'$    @  <    $ ' (      $    @ & @ 5 *  ' )*'"+", -  =(* '$(= )=-$' =$(((            (  "#  $ (     * (      *$$("#  =       ' ($ (      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D     %&  )F$ F'  2$ 7-$  ' H      ' *   ' *''''H E$ (     )+$ =$ @  !'-$ ''%'('''    <  (   (         * '   ( ' '            $ ' H       )'$ A-  *'  '''$('$ 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  >(  '   ( /   D   (          (  $ $   '  '   = (    (?< E'<' <((D$(( (' (%/ )-= D "!%#FG )-= (      (     D% G  F/"#% ,*()*-) "!-)*-)  #F-G  (       !' )!-    G =   (  '   "!%#F '(9"#  (     =$      '(>'? < '  '$   ''   /   $(0( A"#0(  ' $ <7 /   @,* 3"('$I%!/ 7"*  "*' 4"*AA' "* &"*'  3  J<7K <**!+,! "#$( '(*     ' )   #F$    -$'*"#7& '&&B+,!$'77/'/& ='$($'      /       ( *'3 • <>'?2 )F"$,"$E;-       !/  ( *  @" )    '  '$7-,")4- • <  '    F   2:$ +;$ ;.$ @6  ' .$('!("!$  ()-$(<' >?)*&-$('  ' )F"$ ,"$ E;$ @"-   *  @"$    ('<(E'4$ ( (   *  "!  '  *     ')+,!- JE'4/'L7&L&K E' 4$ $  "!  '    9 #F I  <(('/ '$''#F/ • '1(<09 +; $ #6 $M') 2: $ 8# $ ! $ @6 -0  5"*A "*% 3"*%%(  I"* 7>?$3I>!? I=E'4$#F '*% %( $ N  7&  '$'= $(' 7  <$($(  ''  >?   '   *)  * -$     '     ' ' (   =         '  9'$(' '$''!         73           -' *+" =   (     (     $(('= ($( '    $ (        ( =$$(  '   ' 9      8($ (   ('    (     D(D'E/  7 <      $ (        $(=( *<      #6 =(   *B+,!$#6 757I   ."2, ,    ''' $    3     * (  $  7    ' * )%  -<'($#6$   !$    '     '                )$D-#6(  73 <   $    >?      *   , 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   (         $  (    (     *   '$( @'$F*($(( * #. $" '/ t,it J j t,jj,2 K k t,kk,10t,i gLMPINSTOutcome εααα + ++ ++ ++ ++ ++ ++ ++ += == =      (/ %" S7$$)"#@- %"S 9 9 "  )"  ' 7&%5   ''-0 9 #  )#       -0 9 )7&% 5- (3%& *  %           4* %    @ !$      * $ ' )    *   7I  5'  =( =7(*% =$4  (       $      7,' .                F*  .            "# <"  ($$  7I  .$(@)@-("# ()(*2- 8$        '    ' "#$    $    (   ( (   =  $'     '   ' (     "#%           ( $      $%  <$(*( $'/ $*     @$((*'%%$(         D  '<''(  7I.(('$ $"#     '             )-*';%D)(-          %  =  ( $ ($'(('%/ • ')%&-0 • %  $ (     '    )%Q4%&$- 7     (              (          &$  ' ''('       *   $      )  '$   '*('-    *)(#$  4  -     $    ! *$+,!/ 7 @L!L7%I$ !/         = 9 1 , k tk LMP   @L!L7%$!/            = 7 1 , k tk LMP  4 @L!L%/!$* @/       = 7 2 , k tk LMP   !L3/#F/    t LMP ,8  & @L!L3%I/#FT";/        = 9 8 , k tk LMP   7=('()'   %  4%&$ - =           $ *   ( '  '   * $ ( (     <D   7  =   9   '       $ (        ;'L"$ ( '    * !      $   '    J<F"47K ;(<47$ / '    '  ( ' *      !$  '  (  '$ '        4 <(()'-'  (   ' D        )@L!L7%-  4  ='$( =( *  !       )  '      ' -$   '  ;$((<4$*8($ ' ' !          D   ( ' $     '  (      !         D   < ;'  " =*     ,' FO F  )/OO(((''O-=' ),8'$E';'8- 4<(7&4 '       !    $    *$ 2   @       *     J<F"4K    =$(*)'  -'!*  '  *  !         ' ' ;  (  < 44 <    * '       !$ '           J<F"44K  6' " =( $(( * '  &7<  $(* <(%'>?D < 47%44 ) $ D   - *'   $*' (''/0)-020 '0F0M'@0F';-=) *-$(= C'P%* '      !   '$ (  ;'L"'       ;D  4  & <#,=M =   $        (             ='(( $(( / ')"!-$ ')!;- *(' )<- F((   '   (    = '$  '  (    $'('$(      > ?    ' E' 7& 75!;';'L""! JE=+#;"7&%75K   "!' =  7  4 (     "! &   ;'L"    '       !     ( '   '      < 47%44$('<$ $('*&   8(  ( %  D  < 47%44 *'  & $    /  (   "!*(( J<F"7%4K  ! ;' =&7%&4(!;' $' '<(       F  , )5- < (    '*(''*$    ' '      $    !  (   ' '   ' ) - =  (     &"!."2,$7II34$C  ;'L"C73"#     ');'L""!-('$         '$   *(')- J<F"&7C&4K  <*' <'<5754<*' )<- (   $ '     '  = '$     (     '/   D$<''$     =   '   D    =$!''$(  ' 8($ ( (  < ' (    ' );'L"-$''$(;'L" ! '  <47%44 J<F"57C54K  ! =  ' *  $ ! (       *'+,!*(( /'   *        N +,!   @''$     (  ' )(  ' $ ;'L"$ (   '- 5      ' !   *+,!'*<     (    F  , )5-$ (   !   +,!   *      ' @'!(( .A! '**   5;$D  47   / (9 %  /)! &:#&   @/F) - /) &;:&   4  @/@)- /)-' at be cz dk fi fr de gr hu ie it nl pl pt sk es se uk 0 1 2 3 4 5 EPL Strictness (2003) 0 .5 1 1.5 2 2.5 3 3.5 4 4.5 Expenditure on Active and Passive Labor Market Policies, % of GDP (2005) Data not available for bg, cy, ee, lv, lt, lu, mt, ro and si graph_1.0.5_2005a EPL vs Labor Market Expenditure   /)-' at be cz dk fi fr de gr hu ie it nl pl pt sk es se uk 0 1 2 3 4 5 EPL Strictness (2003) 0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1 Expenditure on out-of-work income maintenance and support per unemployed relative to YPC (2005) Data not available for bg, cy, ee, lv, lt, lu, mt, ro and si graph_1.0.3_2005b EPL vs UB expenditure per Unemployed relative to YPC   44   /)5 at be bg cz dk ee fi fr de hu ie it lv lt nl pl ro sk es se uk 0 5 10 15 20 Unemployed persons as a percentage of the labour force (2005) 0 5 10 15 20 25 Participants in LMP (total categories 2-9) as a percentage of the labour force (2005) Data not available for cy, gr, lu, mt, pt and si graph_0.3_2005 Unemployed vs Participants in LMP   /)6 be dk fi fr de it nl es se at ie bg cz ee hulv lt ro sk uk 0 5 10 15 20 Participants in Passive Labor Market Programmes, % of LF (cat. 8-9, 2005) 0 1 2 3 4 5 6 7 8 9 10 Participants in Active Labor Market Programmes, % of LF (cat. 2-7, 2005) Data not available for cy, gr, lu, mt, pl, pt and si Area of symbol proportional to public expenditure in LMP as percentage of GDP graph_0.4_2005 Participants in LM Programs   4  /)7 at be cz dk fi fr de gr hu ie it lu nl pt es se uk 0 1 2 3 Expenditure on Unemployment and Related Benefits, % GDP (2003) 0 1 2 3 4 5 Expenditure on LMP (A+P) and Sick Leave, % GDP (2003) Data not available for bg, cy, ee, lv, lt, mt, pl, ro, sk and si Graph_0.2_2003 UB vs Labor Market Expenditure   /)' eu15 at be bg cz dk ee fi fr de gr hu ie it lv lt lu mt nl pl pt ro si es se uk 5 10 15 20 At-risk-of-poverty rate after social transfers, % 50 55 60 65 70 75 Employed persons age 15-64, % Poverty rate data not available for cy and sk Poverty rate data for cz, dk and se replaced with 2001 data graph_1.1_2000 EU27: Poverty rate vs Employment rate, 2000     4&  /)'  eu15 at be bg cz dk ee fi fr de gr hu ie it lv lt lu mt nl pl pt ro si es se uk eu15 at bebg cy cz dk ee fi fr de gr hu ie it lv lt lu mt nl pl pt ro sk es se uk 5 10 15 20 At risk of poverty rate after social transfers, % 50 55 60 65 70 75 Employed persons age 15-64, % 2000-2005 2000 2005 Poverty rate data not available for cy-2000, sk-2000, si-2005 Poverty rate data for dk-2000 and se-2000 replaced with 1999 data, for cz-2000 with 2001 data and bg-2005 with 2004 data graph_1.1_2000-2005 EU27: Poverty Rate vs Employment Rate   /)< eu15 at bebg cz dk ee fi fr de gr hu ie itlv lt lu nl pl pt ro sk es se uk 5 10 15 20 At risk of poverty after social transfers (% pop., 2005) 0 1 2 3 4 5 Expenditure on A&P Labor Market Policies, % of GDP (2005) Data not available for cy, mt and si Poverty risk data for bg replaced with 2004 data graph_3.3_2005 Poverty risk vs Labor Market Expenditure (% GDP)   45    /)= eu15 at be bg cz dk ee fi fr de gr hu ie it lv lt lu nl pl pt ro sk es se uk 0 1 2 3 4 5 Expenditure on Active and Passive Labor Market Policies, % of GDP (2005) 50 55 60 65 70 75 Employment rate 15-64 (2005) UB data not available for cy, mt and si graph_3.8_2005 Labor Market Expenditure (%GDP) vs. Employment Rate   /)!1 eu15 at be bg cz dk ee fi fr de gr hu ie it lv lt lu nl pl pt ro sk es se uk 0 1 2 3 4 5 Exp. on Active and Passive Labor Market Policies, % of GDP (2005) 4 6 8 10 12 14 16 18 Unemployment rate (2005) LM expenditure data not available for cy, mt, and si graph_3.13_2005 Labor Market Expenditure (% GDP) vs Unemployment Rate       4   /)!! at be dk fi fr de gr ie it nl pt es se uk .1 .2 .3 .4 .5 .6 .7 .8 Union Protection Index, 0 - 1 (2004) 55 60 65 70 75 80 Employment Rate 15-64 (2005) Union Protection Index data not available for bg, cy, cz, ee, hu, lt, lv, lu, mt, pl, ro, sk and si graph_3.10_2005 Union Protection Index vs Employment rate  /)! at be cz dk fi fr de gr hu ie it nl pl pt sk es se uk 0 1 2 3 4 5 EPL Strictness (2003) 55 60 65 70 75 80 Employment Rate 15-64 (2005) EPL Strictness data not available for bg, cy, ee, lt, lv, lu, mt, ro and si graph_3.9_2005 EPL vs Employment Rate      43  /)!- at be dk fi fr de gr ie it nl pt es se uk .1 .2 .3 .4 .5 .6 .7 .8 Union Protection Index, 0-1 (2004) 4 5 6 7 8 9 10 Unemployed Rate (2005) Union Protection Index data not available for bg, cy, cz, ee, hu, lt, lv, lu, mt, pl, ro, sk and si graph_3.15_2005 Union Protection Index vs Unemployment Rate   /)!5 at be cz dk fi fr de gr hu ie it nl pl pt sk es se uk 0 1 2 3 4 5 EPL Strictness (1998) 2 4 6 8 10 12 14 16 18 Unemployment Rate (2000) EPL Strictness data not available for bg, cy, ee, lt, lv, lu, mt, ro and si graph_3.14_2000 EPL vs Unemployment Rate    4I  /)!6 Austria Belgium Czech Republic Germany Denmark Spain Finland France Greece Hungary Ireland Italy Netherlands Poland Portugal Sweden Slovakia United Kingdom 1 1.5 2 2.5 3 PMR 0 20 40 60 rig_emp_new Product Market Regulation VS. Rig. Emp. in 2003   /)!7 Austria Belgium Czech Republic Germany Denmark Spain Finland France Greece Hungary Ireland Italy Netherlands Poland Portugal Sweden Slovakia United Kingdom 1 1.5 2 2.5 3 PMR 1 1.5 2 2.5 3 3.5 epl_strictness_new Product Market Regulation VS. EPL in 2003       &!>") Expenditure in labor market programmes, % of GDP - 2005 EPL Strictness Index 1-6 2003 Active Passive Total pcgdp27_ Rank pcgdp89_ Rank pcgdp19_ Rank epl_strictness_ Rank European Union (15) eu15 0.55 = 1.41 = 2.20 = = = Austria at 0.46 12 1.51 7 2.14 8 2.2 10 Belgium be 0.85 3 2.36 2 3.45 2 2.5 6 Bulgaria bg 0.44 13 0.22 21 0.73 15 .. Czech R. cz 0.12 20 0.24 20 0.49 21 1.9 13 Denmark dk 1.43 1 2.51 1 4.10 1 1.8 14 Estonia ee 0.05 24 0.12 24 0.19 24 .. Finland fi 0.71 5 1.90 5 2.75 5 2.1 12 France fr 0.66 6 1.63 6 2.52 6 2.9 4 Germany de 0.62 7 2.35 3 3.32 4 2.5 7 Greece gr 0.06 23 0.44 15 0.51 20 2.9 3 Hungary hu 0.20 16 0.39 16 0.68 16 1.7 15 Ireland ie 0.48 10 0.83 12 1.50 11 1.3 17 Italy it 0.46 11 0.82 13 1.31 12 2.4 8 Latvia lv 0.15 18 0.32 18 0.54 19 .. Lithuania lt 0.15 19 0.12 23 0.34 23 .. Luxembourg lu 0.22 15 0.67 14 0.89 14 .. Netherlands nl 0.85 3 2.02 4 3.36 3 2.3 9 Poland pl 0.36 14 0.86 11 1.22 13 2.1 11 Portugal pt 0.52 9 1.29 9 1.95 10 3.5 1 Romania ro 0.10 22 0.36 17 0.49 22 .. Slovakia sk 0.17 17 0.27 19 0.61 18 1.6 16 Spain es 0.58 8 1.46 8 2.13 9 3.1 2 Sweden se 1.10 2 1.20 10 2.48 7 2.6 5 U.Kingdom uk 0.12 21 0.19 22 0.67 17 1.1 18 Between Total and EPL: 0.27 Rank correlations Between Active and Passive: 0.87 Between Active and EPL: 0.31 Between Passive and EPL: 0.43 Legenda: Active = categories 2-7 (Luxembourg: only 3-7) Passive = categories 8-9 Total = includes also expenditures in labor market services (cat. 1), except for Luxembourg and Poland Sources: Expenditure data: Eurostat (n.a.: Cyprus, Malta, Slovenia) EPL data: OECD (n.a.: Bulgaria, Cyprus, Estonia, Latvia, Lithuania, Malta, Slovenia)     &5'-'$ @."A*")  '%& !%Q4%&  )7- )- )4- )- )&- )5- )- )3- )I- )7-             ; ; ; ; ; ; ; ; ; ; "!L@ 4 5 && 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 &7'!'" @."A&.B)   '%& !%Q4%&  )7- )- )4- )- )&- )5- )- )3- )I- )7-  "; "; "; "; "; "; "; "; "; "; <*L' %IY %53 %&& %I5Y %3& %57YY %&YY %4IY %4Y %43Y  )755- )7&I- )75- )77- )7- )7&- )775- )77- )747- )74- @L!L7%I 454YYY      457YYY       )777-     )37-     @L!L7%  II5YYY     I5YYY       )&I-     )7I35-    @L!L%   I3YYY      I7&YYY       )5I-     )7II-   !L3    575I YYY     &3 YYY      )73&-     )7I-  @L!L3%I     &774 YYY  474 YYY      )75I-     )7I5- .           A;% D 44 4 4 4  3 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         A;% D & I & 7I 7I  47 5 75 7   &  &'""8"' !% Q4%& !7II3%Q%4  )7- )7- )- )4- )- )&- )5- "/ !)@L!L7%- ."2,/ ! ."2,/ #F ."2,/ !T#F ."2,/ !T#F TE T8' ."2,/ @ ! $*=8 E%,)       ;'L" %7IYY %73YYY %7I4YYY %7IYY %733YY %75Y %7&YYY )&3- )&- )5- )4- )- )7- )4- ! 3YYY &544YYY 37I4YYY & &5YY 757YYY I4Y )7II- )7I77- )7I&- )747- )3- )&4- )7-       . 43 4 45 45 45 45 45 A;% D 4I 7 4 7I  4    