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Mutual Learning Programme Mutual Learning Programme Annual Thematic Synthesis Report 2014 "Lessons from the MLP to work towards the goals of the European Employment Strategy" Written by ICF January 2015 EUROPEAN COMMISSION Directorate-General for Employment, Social Affairs, Skills and Labour Mobility Unit C1 Contact: Emilio Castrillejo E-mail: [email protected] European Commission B-1049 Brussels EUROPEAN COMMISSION Mutual Learning Programme Annual Thematic Synthesis Report 2014 "Lessons from the MLP to work towards the goals of the European Employment Strategy" Directorate-General for Employment, Social Affairs, Skills and Labour Mobility Mutual Learning Programme January 2015 Annual Thematic Synthesis Report LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). © European Union, 2014 Annual Thematic Synthesis Report Table of Contents Annual Thematic Synthesis Report 2014 ............................................................... 1 Annex 1: Analysis of the activities ....................................................................... 2 1 Focus on youth unemployment and the creation of dynamic labour markets ........ 3 2 Key topics for the MLP in 2014....................................................................... 6 2.1 Tackling youth unemployment: Focus on the implementation of the youth guarantee and effective policies to support transitions for young people ............... 6 2.1.1 Introduction ................................................................................... 6 2.1.2 Main lessons of MLP activities ........................................................... 8 2.1.3 Key policy approaches ..................................................................... 9 2.1.4 Emerging policy recommendations ...................................................12 2.2 Creating dynamic labour markets ...........................................................12 2.2.1 Reform of Employment Protection Legislation (EPL) ............................13 2.2.1.1 Main lessons of MLP activities .......................................................13 2.2.1.2 Key policy approaches .................................................................14 2.2.1.3 Emerging policy recommendations ................................................15 2.2.2 Reform of unemployment benefit (UB) systems .................................15 2.2.2.1 Main lessons of MLP activities .......................................................16 2.2.2.2 Key policy approaches .................................................................16 2.2.2.3 Emerging policy recommendations ................................................18 2.2.3 Systems of wage formation .............................................................18 2.2.3.1 Main lessons of MLP activities .......................................................19 2.2.3.2 Key policy approaches .................................................................20 2.2.3.3 Emerging policy recommendations ................................................21 2.2.4 Effective job creation incentives .......................................................22 2.2.4.1 Main lessons of MLP activities .......................................................22 2.2.4.2 Key policy approaches .................................................................23 2.2.4.3 Emerging policy recommendations ................................................26 2.2.5 Flexicurity and its contribution to dynamic labour markets...................27 2.2.5.1 Main lessons of MLP activities .......................................................27 2.2.5.2 Key policy approaches .................................................................28 2.2.5.3 Emerging policy recommendations ................................................30 2.2.6 The importance of evaluation in identifying effective ALMPs .................30 2.2.6.1 Main lessons of MLP activities .......................................................31 2.2.6.2 Key policy approaches .................................................................33 2.2.6.3 Emerging policy recommendations ................................................34 3 Relevance of the MLP for EU2020 and a look forward to 2015 ...........................36 Annual Thematic Synthesis Report Annual Thematic Synthesis Report 2014 The activities organised by the Mutual Learning Programme (MLP) in 2014 focussed on some of the core challenges for European labour markets including approaches to tackling youth unemployment (particularly in the context of the Youth Guarantee); the design of effective employment creation incentives; the activation of unemployment benefit systems; and measures to reduce segmentation in the labour market. As in previous years, there was also an ongoing focus the evaluation of active labour market policies (ALMP) to support evidence based policy making. The following key lessons for policy makers arise from these MLP activities: While the Youth Guarantee shows good potential there are concerns about the costs and the feasibility given the ‘comprehensiveness’ required for successful implementation, especially in the face of budget cuts. Further marketing of the Youth Guarantee both to young people and employers may be required. In most cases the Youth Guarantee can be built on the services and measures that already exist for young people, but where this is not the case effective partnerships with all relevant agencies should be established. This should involve the right allocation of roles/responsibilities and choice of lead organisation, taking into account the availability and capacity to reach out to young people. Commitment from (public and private) employers is also needed, which may be achieved by minimising the administrative burden for employers, investing in dedicated services in the PES (who can pro-actively identify placement and apprenticeship opportunities), diversifying placement types (offering alternatives to the existing forms of apprenticeships), and ensuring that incentives for employers are linked to the quality of the apprenticeships or on-the-job learning. Subsidised job schemes can play a countercyclical role in times of crisis and also help to solve the ‘structural’ component of youth unemployment if implemented appropriately. Measures for young people at risk are most effective in terms of employability when they include a training component, especially when leading to the award of recognised qualifications. Overall, employment creation incentives must carefully balance cost-efficiency with attractiveness to employers. The sustainability of such jobs can be enhanced by placing certain conditions on participating employers; but such conditions again must be designed in such a way as not to deter employers from offering opportunities to the most vulnerable groups. Labour market dynamism and employment creation can also be impacted by wage setting mechanisms, including minimum wages, as well as the strictness of employment protection legislation (EPL). The system of setting minimum wages and review processes play a role here, but overall, the potentially negative impacts of minimum wages on employment can be considered to be marginal. A number of Member States have reformed EPL in an effort to reduce labour market segmentation while at the same time making open ended contracts more attractive to employers (for example by simplifying procedures for dismissal or the reduction of severance payments). Incentives/disincentives for individuals to take up employment can be found in the interaction between wage/tax and benefit systems. There have been efforts to emphasise the activation elements of unemployment benefit systems by reviewing conditions of entitlement and eligibility criteria as well as sanctioning regimes. In practice it appears that significant local discretion remains over the application of such sanctions. The possibility for evidence based policy making continues to be restricted by a lack of reliable and methodologically sound evaluations. In the absence of Randomised Controlled Trials, high quality Counterfactual Impact Evaluations January 2015 1 Annual Thematic Synthesis Report can provide significant evidence of the success or otherwise of ALMPs. However, the use of such methods is currently not widespread and should be encouraged. Annex 1: Analysis of the activities The Mutual Learning Programme is an initiative led by DG Employment, Skill and Labour Mobility and Inclusion (DG EMPL) aimed at promoting the exchange of information and good practice between Member States, as well as the wider dissemination of the European Employment Strategy (EES). The purpose of this Thematic Synthesis Report is to summarise the main lessons of the Mutual Learning Programme (MLP) during 2014. It provides an overall analysis of the results and policy messages that have emerged from the MLP activities. The document also provides a helpful signpost to other, more detailed documents available on the MLP website: Mutual Learning Programme - Employment, Social Affairs & Inclusion - European Commission The main activities that have underpinned the MLP during 2014 are as follows: Peer Reviews Emplois d’avenir: Jobs for the future scheme; Paris, France, 10-11 February 2014 Minimum wage; London, UK, 7-8 April
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