1. bookVolume 10 (2020): Edizione 1 (December 2020)
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Features of the labour market in the context of European diversity

Pubblicato online: 19 Jun 2021
Volume & Edizione: Volume 10 (2020) - Edizione 1 (December 2020)
Pagine: 48 - 60
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2084-1264
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09 Apr 2014
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2 volte all'anno
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Inglese
Introduction

The differences in the level of economic development of countries are particularly evident considering the highly developed and developing countries, but even the former group is not a homogeneous

Marek Maciejewski, ‘Zróżnicowanie kondycji gospodarczej państw Unii Europejskiej’ (2017) Studia Ekonomiczne Zeszyty Naukowe Uniwersytetu Ekonomicznego w Katowicach.

. In the European Union countries, this phenomenon is a natural consequence of the impact of historical and civilization determinants

Agnieszka Głodowska, ‘Zróżnicowanie społeczno-gospodarcze jako czynnik dezintegracji Unii Europejskiej’ (2017) Horyzonty Polityki/Horizons of Politics 55.

. In Central and Eastern Europe, one of the main factors demonstrating differences in development relative to Western Europe was membership in the socialist bloc before 1990. The fall of socialism was associated with the inevitable increase in unemployment, as well as a significant diversification of the labour market

Adrian Smith, ‘Employment Restructuring and Household Survival in ‘Postcommunist Transition’: Rethinking Economic Practices in Eastern Europe’ (2000) 32 Environ Plan A 10, 1759.

. Relatively safe employment in state-owned enterprises has been replaced in favour of work in private companies. In them, often after the process of sectoral restructuring related to the development of services in large cities, there were changes in payments. In addition, new provisions in employment contracts resulted in particular uncertainty among employees

Adrian Smith and others, ‘The Emergence of a Working Poor: Labour Markets, Neoliberalisation and Diverse Economies in Post-Socialist Cities’ (2008) 40 Antipode 2, 283.

. However, significant differences between these groups of countries already existed in the 1980s. As indicated by Jan Fagerberg, Bart Verspagen and Marjolein Caniëls, differences in the unemployment rate were one of the main factors determining differences in development. Furthermore, the unfavourable advantage of employment in the agricultural sector in poorer countries and the lack of access to new technologies led to the stopping of the convergence process (GDP growth per capita in poorer countries did not reach a higher growth rate than in the rich ones)

Jan Fagerberg, Bart Verspagen and Marjolein Caniëls, ‘Technology, Growth and Unemployment across European Regions’ (1997) 31 Regional Studies 5, 457.

.

The basic reasons why post-communist countries began the transformation were the aspiration for a higher standard of living in Western Europe and greater individual freedom. The transition from a centrally planned economy to a market economy and from totalitarianism to a more democratic form of government was crucial in the transformation process. The need to reform labour markets and social policy institutions proved to be an important element in the economic transformation. This was to maintain the old order and at the same time adapt to a decidedly different economic system. The whole change has left a significant mark on post-communist countries, differentiating many economic aspects from Western Europe. Despite the 30 years of market economy, and in many cases 15 years after accession to the European Union, the countries of Central and Eastern Europe remain different in terms of individual features of the labour market

Nicholas Barr, Labor Markets and Social Policy in Central and Eastern Europe: The Accession and Beyond (Nicholas Barr ed, World Bank 2005).

. Labour market research in the context of European diversity is an important cognitive element of the differences arising mainly from more than 30 years ago. Then there was no unemployment in the socialist bloc countries, no unemployment benefits, work was guaranteed by a state body, wages were not highly diversified and most of the resources were state property.

Aims and Methods

The aim of the work was to show the European diversity in terms of labour market factors. Pearson's correlation coefficient, LOG and LOGIT modelling were used for the study. The analysis was based on Eurostat data for 2013. The selection of the study period was dictated by the availability of data – selected results for individual countries: satisfaction with the financial situation, exposure to risk factors, work-related health problems, working in the evenings, number of usual weekly hours of work, employment rates, working at nights, working on Saturdays and long-term unemployment. Satisfaction with the financial situation was a subjective assessment of the respondents in the Eurostat survey and reached a scale of 1 to 10. Furthermore, a partial query of the literature allowed to outline the characteristics of the labour market in existing scientific studies, to indicate the research problem and the importance of the topic in the context of European diversity.

Features of the Labour Market in Economic Research

In 2000, there was an increase in the level of GDP in the countries of Central and Eastern Europe, but from the social perspective, it did not compensate for their still low-income levels. Despite the relative containment of inflation, real earnings were even falling in the most economically efficient countries of this region of Europe – Hungary and Slovenia. Unemployment remained a key problem for these economies, where only Hungary, the Czech Republic, Estonia and Latvia kept their unemployment rate below 10%. Despite the difficult period, especially on the labour market and at some expense of workers, Central and Eastern Europe entered the integration process with the international economy

Roderick Martin and Anamaria Cristescu-Martin, ‘Employment Relations in Central and Eastern Europe in 2000: The Road to the EU’ (2001) 32 Industrial Relations Journal 5, 480.

. According to research conducted by Ewan Carr, active labour market policy offered at the national level turned out to be the key in the context of increased job satisfaction, life satisfaction and reduced job insecurity. Analysis of survey results has confirmed the hypothesis that less impact of uncertainty on satisfaction is in those countries where labour market policy is more generous

Ewan Carr and Heejung Chung, ‘Employment Insecurity and Life Satisfaction: The Moderating Influence of Labour Market Policies Across Europe’ (2014) 24 Journal of European Social Policy 4, 383.

. Melike Wulfgramm came to similar conclusions by examining life satisfaction in the context of unemployment using labour market policies. It turns out that life satisfaction largely depends on the generosity of this policy. A stable system of unemployment benefits reduces the negative effect on life satisfaction almost twice, and the phenomenon is observable both in terms of financial and non-monetary benefits

Melike Wulfgramm, ‘Life Satisfaction Effects of Unemployment in Europe: The Moderating Influence of Labour Market Policy’ (2014) 24 Journal of European Social Policy 3, 258.

.

High unemployment is one of the indicators that most clearly shows the poor condition of the economy and the waste of the most valuable resources. For this reason, it should be the duty of the government to maintain as full employment as possible

Joseph E Stiglitz, The Roaring Nineties: A New History of the World's most Prosperous Decade (1st edn, Penguin 2003).

. In addition, as Günther Schmid points out, long-term unemployment is the main reason for poverty, social exclusion and the increase in inequality. He continues that the lack of full employment negatively impacts both the production and non-monetary values of society's well-being, such as health and crime. He concludes that the non-economic costs of unemployment are significant

Günther Schmid, Full Employment in Europe: Managing Labour Market Transitions and Risks (Edward Elgar 2008).

.

Constantly growing competition and technological progress have significantly contributed to increasing pressure on the workforce. In addition, by receiving more demanding tasks by employees and by less and less subjective well-being at work, it has worsened for most European countries

Organisation for Economic Co-operation and Development, OECD Employment Outlook 2019: The Future of Work (Organisation for Economic Cooperation and Development 2019).

. It turns out that work-related health problems were influenced by, among others, computerization of tasks, as well as a growing proportion of people in service work. Both physical and mental problems are emphasized in this aspect

Peter Cappelli, Change at work (Oxford University Press 1997).

,

Silvana Robone, Andrew M Jones and Nigel Rice, ‘Contractual Conditions, Working Conditions and their Impact on Health and Well-Being’ (2011) 12 The European Journal of Health Economics: HEPAC: Health Economics in Prevention and care 5, 429.

. However, in the literature on the subject, empirical studies do not show that unusual forms of employment (e.g. temporary or part-time) may be associated with adverse health consequences

Elena Bardasi and Marco Francesconi, ‘The Impact of Atypical Employment on Individual Wellbeing: Evidence from a Panel of British workers’ (2004) 58 Social Science & Medicine 9, 1671.

. In turn, the unemployed definitely face more health-related problems than those taking up low-paid jobs

Ioannis Theodossiou, ‘The Effects of Low-Pay and Unemployment on Psychological Well-Being: A Logistic Regression Approach’ (1998) 17 Journal of Health Economics 1, 85.

,

Andrew E Clark, ‘Unemployment as a Social Norm: Psychological Evidence from Panel Data’ (2003) 21 Journal of Labor Economics 2, 323.

,

Pilar García Gómez and Angel López Nicolás, ‘Health Shocks, Employment and Income in the Spanish Labour market’ (2006) 15 Health Economics 9, 997.

.

Working in shifts, performing complex and intensive tasks, and a low level of autonomy also turn out to be frequent factors affecting the higher likelihood of employees having health problems

Elena Cottini and Claudio Lucifora, ‘Mental Health and Working Conditions in Europe’ (2013) 66 ILR Review 4, 958.

. However, according to many studies, working during shifts, and especially during night shifts negatively affects family and social life, increases the risk of accidents and mood disorders

Simon Folkard and David A Lombardi, ‘Toward a “Risk Index” to Assess Work Schedules’ (2004) 21 Chronobiology International 6, 1063.

,

Ole Giebel and others, ‘A New Approach for Evaluating Flexible Working Hours’ (2004) 21 Chronobiology International 6, 1015.

,

Michael Ingre and others, ‘Variation in Sleepiness During Early Morning Shifts: A Mixed Model Approach to an Experimental Field Study of Train Drivers’ (2004) 21 Chronobiology International 6, 973.

. Nevertheless, as Giovanni Costa et al. indicated, these issues may also be affected by indirect factors associated with personal characteristics. The result of the interaction depends not only on the specific determinant but also the frequency of undertaking this type of work and the duration of the employee's life

Giovanni Costa and others, ‘Flexible Working Hours, Health, and Well-Being in Europe: Some Considerations from a SALTSA Project’ (2004) 21 Chronobiology International 6, 831.

.

In 2018, the average number of working hours per week for the European Union countries was 40.3 hours

Eurostat, ‘How Many Hours do Europeans Work Per Week?’ (2018) <https://ec.europa.eu/eurostat/web/products-eurostat-news/-/DDN-20180125-1> accessed 26 October 2019.

. In the mid-nineteenth century, the printing industry in Germany worked 70 hours a week. Only 50 years later, trade unions managed to reduce this time to 60 hours, and then in 1950 the average length of work was 48 hours. In the European Union countries in the 1990s, the average number of working hours was 40, and later even 38.5 hours. However, currently there is a clear tendency to significantly slow down the reduction of working time, and in some cases even its increase

Schmid (n 13).

. Axel Hall and Gylfi Zoega indicate that a relatively shorter working week and higher unemployment rates are observable in many European economies. The reasons are, among others, higher wages, their low flexibility, as well as much greater strength of trade unions than in the United States, for example

Axel Hall and Gylfi Zoega, ‘Welfare, Employment, and Hours of Work’ (2019) Economics Discussion Papers <http://www.economics-ejournal.org/economics/discussionpapers/2019-1/> accessed 26 November 2019.

. In turn, the factors determining longer working time in the United States are willingness to get promotion and increase in wages, which is the result of much higher income inequalities compared to the rich countries of Western Europe

Linda Bell and Richard Freeman, ‘The Incentive for Working Hard: Explaining Hours Worked Differences in the U.S. and Germany’ (Cambridge, MA 2000).

. The conclusions of Alexander Bick, Nicola Fuchs-Schündeln and David Lagakos show that in developing countries the average number of hours worked is much higher in developed countries, regardless of gender, age or education, and the difference in real hours worked can reach up to 50% within a week

Alexander Bick, Nicola Fuchs-Schündeln and David Lagakos, ‘How do Hours Worked Vary with Income? Cross-Country Evidence and Implications’ (Cambridge, MA 2016).

.

European Diversity Relative to Selected Factors

European diversity was determined by the historical affiliation of states to the socialist bloc. The empirical results used in the work referred to 30 countries, i.e.: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.

As shown in Figure 1, the highest correlation coefficients with the variable determining financial satisfaction were noted in relation to long-term unemployment, the number of usual weekly hours of work and the employment rate. In the examined group of European countries, together with a higher rate of long-term unemployment, a tendency of reduced satisfaction with the financial situation was observed. A similar phenomenon was noted by Markus Gangl, who described a group of people with the lowest qualifications as the most affected by changes in economic conditions. In addition, he stated that in such circumstances, the constantly accelerating growth of professionalization on the labour market also strongly affects those who are just entering the labour market, in particular, those immediately after graduating from higher education

Markus Gangl, ‘Changing Labour Markets and Early Career Outcomes: Labour Market Entry in Europe Over the Past Decade’ (2002) 16 Work, Employment and Society 1, 67.

. Positive correlation of satisfaction with the financial situation in relation to the employment rate is also significant in the examined group of countries. Regarding the number of working hours per week, there was a high negative correlation between financial satisfaction and working hours for the whole group. Nevertheless, Simone Moriconi and Giovanni Peri show that European countries also differ greatly in terms of identifying work or private life as a more important aspect of their lives

Simone Moriconi and Giovanni Peri, ‘Country-Specific Preferences and Employment Rates in Europe’ (2019) 116 European Economic Review 1.

.

Figure 1

Correlations between satisfaction with the financial situation and selected labour market factors

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Hence, based on collected data, an attempt was made to assess the diversity of countries in relation to the labour market in the case of their belonging to the former socialist bloc. Thus, an additional qualitative variable of belonging was created, dividing the set into two groups.

The results of the obtained model are presented in Tables 1 and 2 and in Figure 2. As Table 2 indicates, the quality of the predictive model has allowed the determination of factors characterizing both groups of European countries. The variable informing about taking up work at night turned out to be a particularly strong determinant. The share of this type of shift work is relatively common in former Eastern Bloc countries. A similar trend is noticeable for working in the evenings and the number of usual weekly hours of work. The differences also emphasize the report in which post-communist countries of Central and Eastern Europe were grouped as those with the largest number of working hours per year

John Morley and others, ‘Comparative Analysis of Working Time in the European Union’ (2010) <https://www.eurofound.europa.eu/sites/default/files/ef_files/docs/ewco/tn0803046s/tn0803046s.pdf> accessed 15 November 2019.

. All this proves the diversity of these two groups and indicates a still functioning different working culture in the countries that once belonged to the Eastern Bloc.

The odds ratio of the LOGIT model of factors differentiating Western European countries and the former Eastern Bloc

Effect Odds ratio Upper confidence limit 95% Lower confidence limit 95% p-value
The number of usual weekly hours of work 0.131066 0.023409 0.73383 0.020773
Working at night 4.846148 1.202750 19.52622 0.026446
Working in the evenings 0.533012 0.315653 0.90005 0.018576

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Classification of model cases (0 – for Western European countries; 1 – for countries of the former Eastern Bloc)

Expected: 0 Expected: 1 Percent correct
Observed: 0 19 2 90.4761905
Observed: 1 2 6 75

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019.

Figure 2

Normality of LOGIT model residues

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

The effects of the LOG model for the variable satisfaction with the financial situation

Effect Rate Standard error Wald test p-value
Constant term 3.173 0.297 113.7921 0.000000
The number of usual weekly hours of work −0.0356 0.008 18.8641 0.000014
Work-related health problems 0.007 0.003 8.2685 0.004034
Long-term unemployment −0.0198 0.0056 12.6266 0.000380

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019.

As in the case of different observations in relation to the country's belonging to the former socialist bloc, all previously selected factors were also used in the log model. Its purpose was to explain the diversity of financial satisfaction in individual countries. Of all the variables, three were identified that make it possible to distinguish the level of satisfaction: the number of usual weekly hours of work, work-related health problems and long-term unemployment. As shown in Figure 4, the effects of the log model are particularly visible for the variable satisfaction with the financial situation below the value of 6.5. Subjectively assessed satisfaction with the financial situation decreases as the number of weekly working hours increases. The reason may be difficulties in maintaining a balance between time spent on work and private life. Similar observations are noted by Mark Tausig and Rudy Fenwick – less time spent with the family can result in a general decrease in life satisfaction

Mark Tausig and Rudy Fenwick, ‘Unbinding Time:: Alternate Work Schedules and Work-Life Balance’ (2001) 22 Journal of Family and Economic Issues 2, 101.

. In addition, as the model indicates, as the long-term unemployment increases, satisfaction with the financial situation in the countries studied decreases. On the other hand, in the case of work-related health problems, the variable determining financial satisfaction grows proportionally. This observation is probably justified by the number of health services. A study by Ola Sjöberg among 21 European Union countries in 1992–2011 showed that in the long-term generous sickness benefits reduce the number of absenteeism in the future. Hence, the result of the analysis in the form of a positive effect of work-related health problems may translate into increased satisfaction with the financial situation

Ola Sjöberg, ‘Positive Welfare State Dynamics? Sickness Benefits and Sickness Absence in Europe 1997–2011’ (2017) 177 Social Science & Medicine (1982) 158.

.

Figure 3

Residual normality

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Figure 4

Scatter of the LOG model relative to observable values

Source: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Summary

The article presents selected relationships between satisfaction with the financial situation due to belonging to the former socialist bloc as well as selected features of the labour market. The most important conclusions from the study are as follows:

Of all the factors, the key to the differentiation of the two groups of countries turned out to be the number of usual weekly hours of work, working at nights and working in the evenings.

Long-term unemployment, the number of hours worked per week and the employment rate achieves the highest correlation coefficients with the variable determining satisfaction with the financial situation. For the first two variables, the correlation value was negative, and for the last one, positive.

Analysis of the examined variables allowed to identify three, which allow distinguishing the level of satisfaction with the financial situation – long-term unemployment, the number of weekly working hours and work-related health problems.

In the post-communist countries of Central and Eastern Europe, some issues related to the labour market culture in the Eastern Bloc are still observable. Hence, research on the features of this element of the economy in the context of European diversity is the cognitive basis for determining future directions of development of these countries.

Figure 1

Correlations between satisfaction with the financial situation and selected labour market factorsSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019
Correlations between satisfaction with the financial situation and selected labour market factorsSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Figure 2

Normality of LOGIT model residuesSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019
Normality of LOGIT model residuesSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Figure 3

Residual normalitySource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019
Residual normalitySource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

Figure 4

Scatter of the LOG model relative to observable valuesSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019
Scatter of the LOG model relative to observable valuesSource: own study based on: ec.europa.eu/Eurostat, download date: 20.02.2019

The odds ratio of the LOGIT model of factors differentiating Western European countries and the former Eastern Bloc

Effect Odds ratio Upper confidence limit 95% Lower confidence limit 95% p-value
The number of usual weekly hours of work 0.131066 0.023409 0.73383 0.020773
Working at night 4.846148 1.202750 19.52622 0.026446
Working in the evenings 0.533012 0.315653 0.90005 0.018576

Classification of model cases (0 – for Western European countries; 1 – for countries of the former Eastern Bloc)

Expected: 0 Expected: 1 Percent correct
Observed: 0 19 2 90.4761905
Observed: 1 2 6 75

The effects of the LOG model for the variable satisfaction with the financial situation

Effect Rate Standard error Wald test p-value
Constant term 3.173 0.297 113.7921 0.000000
The number of usual weekly hours of work −0.0356 0.008 18.8641 0.000014
Work-related health problems 0.007 0.003 8.2685 0.004034
Long-term unemployment −0.0198 0.0056 12.6266 0.000380

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