Abstract
The Global Financial Crisis (GFC) has had a significant impact on the European labour markets. The objective of this chapter is to analyse whether this impact significantly differs among countries and the reasons behind these differences. We analyse to what extent the differences in the impact of the GFC on the economic activity explain the variation in performances of the European labour markets. Our analysis shows that although this impact is clear, other elements explain these differences. In the second part of the chapter, we study whether the presumed rigidities in the labour markets have contributed to the evolution of the employment and unemployment rates. We conclude that more rigid labour markets have not led to larger declines in employment and increases in unemployment rates, and that more flexible labour markets have contributed to a more rapid recovery of labour markets.
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- 1.
Source: IMF World Economic Outlook Database (October 2016), Eurostat, National Accounts (ESA 2010), and Eurostat, Employment and Unemployment (Labour Force Survey)
- 2.
Other elements that would contribute to explain the impact of the crisis on the national labour markets would be the sectorial impact of the crisis (for instance, the impact of the crisis on the housing and construction sectors), or the nature of the crisis, with banking and financial crisis leading to worst performances in the labour markets and the different demographic (ageing, migration, etc.) processes.
- 3.
This conclusion depends on the non-existence of a different impact of the economic structure of the countries. In the case of a recession in two economies, the impact on the employment and unemployment of the declining economic activity would be higher in the economy in which the crisis has affected most deeply the labour-intensive sectors.
- 4.
Results can be obtained from the authors upon request.
- 5.
An OLS regression between the change in the growth of temporary contracts and the growth of total employment shows that the growth of the former is not a significant determinant of the change in total employment. The results are not reported to save space, but can be obtained from the authors upon request.
- 6.
Several countries have adopted new types of employment contracts (both temporary and permanent contracts) for certain categories of workers deeply affected by the GR and the employment destruction (young workers, women, long-duration unemployed workers, etc.). These new contracts frequently offer lower employment protection than the standard contracts (that is, full-time permanent employment contracts), downgrading the rights to unemployment or social benefits, incorporating lower severance payments or offering reducing wages (Lang et al. 2013). These types of contracts have been approved in countries like Belgium, Bulgaria, Croatia, Czech Republic, Romania, France , Greece, Hungary, Ireland, Italy, Luxembourg, Poland, Slovakia, Slovenia, Spain , Sweden and the UK (see Clauwaert and Schömann 2012, and the successive updates of the information included in that work, which are available at the European Trade Union Institute website: https://www.etui.org/Publications2/Working-Papers/The-crisis-and-national-labour-law-reforms-a-mapping-exercise).
- 7.
See Clauwaert and Schömann (2012) and the successive updates of the information included in that work, which are available at the European Trade Union Institute website: https://www.etui.org/Publications2/Working-Papers/The-crisis-and-national-labour-law-reforms-a-mapping-exercise
- 8.
See footnote 6.
- 9.
According to the definition of the International Labour Organisation (ILO), used by Eurostat, workers in precarious employment can either (a) be workers whose contract of employment leads to the classification of the incumbent as belonging to the groups of ‘casual workers’, ‘short-term workers’ or ‘seasonal workers’; or (b) be workers whose contract of employment will allow the employing enterprise or person to terminate the contract at short notice and/or at will, the specific circumstances to be determined by national legislation and custom.
- 10.
On the contrary, in six countries the share of precarious employment in the year 2015 was below 10 per cent of total employment: Germany (3.7 per cent), Cyprus (4.3 per cent) Czech Republic (4.7 per cent), the Netherlands (5.9 per cent), the UK (6.6 per cent) and Ireland (8.4 per cent).
- 11.
In 2015, according to the data of Eurostat, temporary employees amounted to 25.2 per cent of total employees. This figure is, nonetheless, much lower than that recorded before the onset of the crisis (34 per cent in 2006). The declining share of the Spanish temporary workers is explained by the huge adjustment in the figures of the temporary workers. However, the current employment creation process is being fuelled by a new rise in temporary workers, and, thus, according to the data of the Labour Force Survey of the Spanish National Institute of Statistics, the share of temporary employees (as a percentage of total employees) has risen from 21.9 per cent at the first quarter of 2013 to 26.5 at the last quarter of 2016.
- 12.
See footnote 6.
- 13.
Germany is not included because between 2008 and 2013, the unemployment rate was lower than that recorded in the year 2007.
- 14.
It must be noticed that Austria, Belgium, France and Poland are not included in this analysis, because since the year 2008 the employment in these countries has been higher than that recorded in 2007.
- 15.
We have separately analysed the periods of employment creation and the periods of employment adjustment. In both cases, a decline in EPL indicators is associated with a worse result in employment. Results can be obtained from the authors upon request.
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Ferreiro, J., Gómez, C. (2017). The Global Financial Crisis and the Labour Markets in Europe: Do Labour Institutions Matter?. In: Arestis, P., Sawyer, M. (eds) Economic Policies since the Global Financial Crisis. International Papers in Political Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-60459-6_7
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