Assessing the social impact of the crisis
in the European Union
Terry Ward,
Applica sprl
International Seminar on Early Warning and Business
Cycle Indicators
Scheveningen, The Netherlands
14-16 December, 2009
Objectives and data sources
Aims:

To identify social groups most affected by the crisis

To assess how far protected by social welfare system
Difficulties:

Lag in effect of economic downturn on employment

Lag in data becoming available
Data sources (in EU):

Monthly unemployment statistics

Quarterly Labour Force Survey

Short-term business statistics – production + employment by detailed sector

Data on large enterprise restructuring (European Restructuring Monitor)
Missing short-term sources:

Social protection statistics on payment of benefits

Detailed unemployment statistics – on characteristics of those registering

Data on those losing their jobs – or having earnings cut
Approach


To review past economic downturns and their effects on different social groups –
to identify what might be expected

Means in practice early 1990s and early 2000s for some countries

Difficult to go back earlier, but probably less relevant
To examine early stages of present recession to see whether same features evident
– despite difference in origin of crisis


Mainly on basis of EU Labour Force Survey and Short-term business
statistics
To assess extent of income support provided by social welfare system in EU
Member States

On basis of EU-SILC – but only data on income for 2004-2006 for all EU
countries
Starting-point – review of downturn in EU in early 1990s …
Employment developments relative to working-age population in 1990-94 downturn
Change in employment and counterpart changes in unemployment and inactivity of
people aged 15-64 in EU15 Member States, 1990-94
4
Unemployed
Change as % population 15-64
Inactive
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
-10
-10
-12
-12
-14
-14
BE
DK
DE
IE
GR
ES
FR
IT
LU
NL
PT
FI
SE
UK
EU
Employment of men most affected during 1990-94 downturn
Change in employment and counterpart changes in unemployment and inactivity of
men aged 15-64 in EU15 Member States, 1990-94
2
Unemployed
Change as % of men aged 15-64
Inactive
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
-10
-10
-12
-12
-14
-14
-16
-16
BE
DK
DE
IE
GR
ES
FR
IT
LU
NL
PT
FI
SE
UK
EU
Young people under 25 affected even more
Change in employment and counterpart changes in unemployment and inactivity of
young people aged 15-24 in EU15 Member States, 1990-94
Unemployed
Change as % of population 15-24
Inactive
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
-22
-24
-26
2
0
-2
-4
-6
-8
-10
-12
-14
-16
-18
-20
-22
-24
-26
BE
DK
DE
IE
GR
ES
FR
IT
LU
NL
PT
FI
SE
UK
EU
Older men aged 55-64 also affected
Change in employment and counterpart changes in unemployment and inactivity of
men aged 55-64 in EU15 Member States, 1990-94
2
Unemployed
Change as % of men aged 55-64
Inactive
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
-10
-10
-12
-12
BE
DK
DE
IE
GR
ES
FR
IT
NL
PT
FI
SE
UK
EU
But women much less affected – though upward employment trend halted
Employment rates in the EU15, 1985-1995
% of total in each broad age group
100
100
Men aged 25-54
90
90
80
80
70
70
Women aged 25-54
60
Men aged 55-64
50
40
50
40
Men and women aged 15-24
30
20
30
Women aged 55-64
10
0
1985
60
20
10
1986
1987
1988
1989
1990
1991
1992
1993
1994
0
1995
Downturn in early 2000s affected only some countries – men + young people mostly
Change in employment of men as % of population of men of working age and in
employment of young people 15-24, 2000-2004
2
Unemployment
Percentage point change
Inactive
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
Left bar: men aged 15-64; right bar: young
-6
-6
-7
-7
DK
DE
NL
AT
PT
SE
Employment rate of under 25s only slightly affected at EU level – constant since
Employment, unemployment and inactivity of those aged 15-24 in the EU15, 1985-2008
% of total aged 15-24
55
50
55
Inactivity
50
45
40
45
Employment
40
35
35
30
30
25
25
20
20
15
15
10
5
Unemployment
10
5
0
0
19851986 19871988198919901991 1992199319941995 1996 1997199819992000 20012002200320042005 200620072008
Employment of 55-64 age group not affected at all – upward trend since later 1990s
Employment rates of those aged 54-64 in the EU15, 1985-2008
60
% men/women, 55-64
60
55
55
50
50
45
Men
45
40
40
35
35
30
25
Women
30
25
20
20
198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008
Present crisis – limited effect on employment up to mid-2009 with marked exceptions
Change in employment rate of population 15-64 in Member States, 2008.Q2 to 2009.Q2
Percentage point change
Unemployment
Inactive
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
Men again affected most
Change in employment rate of men aged 15-64 in Member States, 2008.Q2 to 2009.Q2
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-12
Percentage point change
Unemployment
Inactive
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
-11
-12
Only marginal decline in employment of women – though large in some countries
Change in employment rate of women aged 15-64 in Member States, 2008.Q2 to
2009.Q2
4
Percentage point change
Unemployment
Inactive
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
Young people also affected as in past – though more reflected in unemployment
Change in employment rate of people aged 15-24 in Member States, 2008.Q2 to
2009.Q2
3
Percentage point change
Unemployment
Inactive
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
-9
-10
-10
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
Older men less affected than in early 1990s – though decline in some countries
Change in employment rate of men aged 55-64 in Member States, 2008.Q2 to 2009.Q2
5
Percentage point change
Unemployment
Inactive
5
4
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
Upward trend in employment of older women has continued though at slower rate
Change in employment rate of women aged 55-64 in Member States, 2008.Q2 to 2009.Q2
Percentage point change
Unemployment
Inactive
6
6
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
BE BG CZ DK DE EE IE EL ES FR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK EU
Decline in output not yet reflected in employment – especially in some sectors
Manufacturing
Food products
Clothing
Chemicals
Rubber, plastic products
Basic metals
Electrical equipment
Machinery+equipment
Motor vehicles
Furniture
Construction
Retailing+wholesaling
Land transport
Air transport
Hotels and restaurants
Telecommunications
Computing
% Change between 2nd quarters in the years
Production
Employment
2007-08
2008-09
2007-08
2008-09
0.0
-17.6
0.5
-4.7
-0.6
-0.6
0.9
-0.6
-2.5
-9.1
-2.8
-9.6
-0.7
-15.3
-0.7
-4.7
-2.9
-18.9
0.1
-6.0
3.3
-34.8
-0.1
-6.4
3.9
-26.0
2.4
-6.9
5.1
-29.4
3.3
-3.3
-0.4
-32.6
0.4
-7.4
-2.1
-20.8
-0.6
-9.0
-2.9
-8.9
-0.6
-8.4
7.9
-11.3
1.4
-2.3
11.8
-9.9
1.5
-3.0
8.2
-7.1
-0.3
-6.4
2.2
-5.4
1.4
-2.4
0.2
0.5
-1.7
-3.4
7.4
-7.3
5.3
0.5
Short-time working scheme in Germany has maintained jobs to major extent
Thousands
5,500
5,500
Unemployed
5,000
5,000
4,500
4,500
4,000
4,000
3,500
3,500
3,000
3,000
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
Short-time
workers
500
0
Ja
n87
Ja
n88
Ja
n89
Ja
n90
Ja
n91
Ja
n92
Ja
n93
Ja
n94
Ja
n95
Ja
n96
Ja
n97
Ja
n98
Ja
n99
Ja
n00
Ja
n01
Ja
n02
Ja
n03
Ja
n04
Ja
n05
Ja
n06
Ja
n07
Ja
n08
Ja
n09
0
500
Source: BA
% of unemployed aged 25-59 receiving income support by months unemployed:
Belgium
Czech Republic
Denmark
Germany
Estonia
Ireland
Greece
Spain
France
Italy
Latvia
Lithuania
Hungary
Netherlands
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
UK
EU25
1
75
88
90
92
34
65
17
64
74
65
30
32
68
88
89
32
57
69
46
82
78
27
68
2-3
83
87
88
90
32
31
49
67
83
68
52
49
77
90
90
36
48
83
59
89
85
40
71
4-6
95
85
97
97
40
58
55
67
81
70
52
23
80
98
99
46
43
69
55
96
79
44
72
7-12
97
63
93
90
16
71
22
43
87
27
41
23
79
100
96
25
56
73
59
95
87
74
63
% aged 18-24 with income below 60% of median by months of unemployment:
Belgium
Czech Republic
Germany
Estonia
Ireland
Greece
Spain
France
Italy
Latvia
Lithuania
Hungary
Austria
Poland
Portugal
Slovenia
Slovakia
Finland
Sweden
UK
EU25
Age group
17
12
21
17
17
24
17
21
24
17
15
17
12
21
16
9
12
24
27
19
1-6 Months
14
16
25
27
18
28
17
20
24
19
17
20
4
24
26
19
16
24
37
22
7-12 Months
43
44
34
49
36
30
33
46
41
42
35
46
49
43
23
42
36
47
40
51
20
21
41
THANK YOU FOR YOUR ATTENTION