Janine Leschke, ETUI-REHS (research unit) QMSS conference 2007, Prague, 20-23 June 2007

1. Are unemployment insurance systems in Europe adapting to new risks arising from non-standard employment? Janine Leschke, ETUI-REHS (research unit) QMSS conference 2007, Prague, 20-23 June 2007

2. Hypotheses • Persons with non-standard employment contracts face greater risks to make transitions to unemployment or inactivity than persons with regular contracts; • Unemployment insurance systems that strongly incorporate welfare principles instead of insurance principles grant better coverage of non-standard workers. • Insurance principle: strong equivalence between contributions and benefits; aims: status maintenance, contributory justice Germany and Spain • Welfare principle: stronger degree of tax financing and thus weaker link between contributions and benefits (easier redistribution); aims: preventing and mitigating poverty United Kingdom and Denmark

3. Part-time employment by gender, 2006 (% of total employment of a given sex 15-64) Source: Eurostat LFS data, 2nd quarter 2006.

4. Fixed-term employment by age group, 2006(% total number employees in age group) Source: Eurostat LFS data, 2nd quarter 2006.

5. The European Community Household Panel (ECHP) • EU-15 countries • 8 waves (for most countries 1994-2001) • Sample of approximatelly 60 500 nationally representative households and about 130 000 individuals (1994) • Follow up data: EU-SILC (from 2004 onwards) Advantages: • Country comparisons are possible (common questionnaires except for DE, UK, LUX, SE) • Panel data (dynamic analysis is possible) • Encompassing information on individuals (employed, unemployed, inactive) and households Disadvantages: • Sample size restrictions • Some limitations in variables (f. ex. no distinction between unemployment insurance and unemployment assistance)

6. Short-term upward, downward, and sideward transitions from and to full-time and part-time employment for prime-age workers (25 to 55) Source: Own calculation based on European Community Household Panel (ECHP), waves1994-2001.

7. Longer-term upward, downward, and sideward transitions from and to full-time and part-time employment for prime-age workers (25 to 55) Source: Own calculation based on European Community Household Panel (ECHP), waves 1994-2001.

8. Characteristics of unemployment insurance systems that potentially restrict coverage of non-standard workers Part-time workers: • Hours or wage thresholds (access) • Qualifying period (access) • Means-testing (access and level) • Proportionality between benefits and former wages (level) Fixed-term workers: • Qualifying period (access) • Benefit period depending on contribution time (duration) • Means-testing (access and level)

9. Advantage of survey data Registration at employment office by former working hours Source: Own calculation based on pooled and weighted ECHP data; Basis: all unemployed jobseekers.

10. Unemployment benefit receipt of former full-time and part-time workers: comparison of registered unemployed (fond) and all unemployed jobseekers (stripes) Source: Own calculation based on pooled and weighted ECHP data.

11. Access of non-standard workers to unemployment benefits (random effects logit model ) Source: Own calculation based on ECHP data. Basis: all unemployed jobseekers.

12. Individual predicted probabilities of unemployment benefit receipt for typical former part-time and full-time workers *Age, former wage, current household income, length of unemployment and qualification level are set to their mean. Source: Own calculation based on ECHP data; basis: all unemployed jobseekers.

13. Average monthly unemployment benefit level by working time (in purchasing power parities) Source: Own calculation based on pooled and weighted ECHP data. The figure refers to unemployment benefit recipients with between 3 and 12 months of unemployment.

14. Net replacement rates at unemployment for former part-time and full-time workers (approximation) Source: ECHP data, own calculation. Average wage and unemployment benefit level for people who worked more than 20 hours.

15. Conclusions • Non-standard workers are in all countries more likely than standard workers to become unemployed or inactive • The expectation that unemployment insurance systems of the four countries strongly vary in their potential to cover non-standard workers did not prove true • Differences in coverage rates are driven by the overall coverage levels rather than by the predominance of welfare or insurance principles • There is evidence for redistribution concerning benefit levels

16. Conclusions Unemployment insurance reforms did not directly tackle deficient coverage of non-standard workers, nevertheless, they had some (unindended?) influences on the insurance situation of non-standard workers • Hours thresholds have been lowered or abolished and some countries introduced favourable benefit regulations for workers who change from full-time to part-time work • On the other hand, some of the reform measures that aimed at making the systems financially more viable worsened the situation of non-standard workers: • Abolishment of original unemployment assistance (Germany) • Shortening of reference periods for contribution requirements (Germany and Spain) • Extension of contribution requirements (Denmark) • Cutting of the duration of non means-tested benefits (Germany and the UK)

17. Possible solutions for more inclusive benefit systems Fighting against the gendered division of labour • Supporting high hours part-time employment and upward mobility (I) • Incentives for more equal distribution of household/care activities between men and women (IV) Modifications in UI design (II) • Basic or minimum insurance for all (but danger of further segmentation) • Abolishing earnings- and hours thresholds • Installing sufficiently long reference periods for contribution payments • Individualisation of benefit receipt • Modifications in financing mechanisms • Encouraging labour mobility through “positive” activation Modifying the gendered division of labour • Supporting high hours part-time employment and upward mobility • Incentives for more equal distribution of household/care activities between men and women Modifying the design and functioning of unemployment benefits • Basic or minimum insurance for all (but danger of further segmentation) • Abolishing earnings- and hours thresholds and installing sufficiently long reference periods for contribution payments • Individualisation of benefit receipt • Modifications of financing mechanisms • Encouraging mobility and employability through “positive” activation Fighting against the gendered division of labour • Supporting high hours part-time employment and upward mobility (I) • Incentives for more equal distribution of household/care activities between men and women (IV) Modifications in UI design (II) • Basic or minimum insurance for all (but danger of further segmentation) • Abolishing earnings- and hours thresholds • Installing sufficiently long reference periods for contribution payments • Individualisation of benefit receipt • Modifications in financing mechanisms • Encouraging labour mobility through “positive” activation