Policies and regulations to support job creation and entrepreneurship

Transcription

1 Policies and regulations to support job creation and entrepreneurship Eric Meyermans & Ana Xavier ESDE 2015 Conference 21 January 2016

2 Strong potential to create jobs Self-employment and entrepreneurship give the unemployed and disadvantaged an opportunity to fully participate in the economy provided the right framework conditions are in place Social and LM policies affect framework conditions.

3 Source: Eurostat Share of self-employed in total employment

4 The right framework conditions Start-ups Entrepreneurial culture: e.g. education, second change, Finance and capital: e.g. market failures, Tax conditions: e.g. tax compliance costs Social protection arrangements: no private market insurance Red tape and regulation: e.g. one-stop shops Business development services: e.g. legal services Product market access: e.g. deepening of single market, Macro-economic stability.

5 Under-represented groups Women Source: DG EMPL calculations based on Eurostat

6 Targeting under-represented groups Design persons targeted: unemployed, young, older, type of support: Monetary: e.g. lump sum Non-monetary support: e.g. promoting entrepreneurship skill formation, coaching child-care, networks, Costs dependency potential displacement effects & deadweight losses moral hazard & adverse selection Evaluation-capacity: rather limited.

7 Less than a third of self-employed hire employees 2014 Source: Eurostat

8 The right framework conditions ADDITIONAL JOB CREATION Business survival Development of entrepreneurial skills Supporting innovative entrepreneurship Reallocation along flexicurity principles Preparing for an interconnected world economy Talent: international competition for scarce resource Strengthening working conditions Hiring and firing costs Thresholds for more stringent regulation.

9 Labour legislation A key framework condition Regulates relationships between workers, employers, trade unions and employers' associations, as well as the role of the state Covers many areas one area of interest Employment protection legislation (EPL): rules and procedures on hiring or dismissing workers; procedures for employers in dismissing workers; definition of lawfulness of the dismissal 9

10 EPL for permanent and temporary work contracts 2013 EPL varies across Member States and types of contract Important reforms since 2008 including for permanent contracts Source: OECD Employment Protection Database 10

11 EPL and law enforcement de facto EPL Average trial length in days for civil and commercial litigation varies significantly across the EU Source: CEPEJ and EU Justice Scoreboard 11

12 EPL and law enforcement de facto EPL The efficiency in resolving employment cases can influence employers' perception of stringency of labour legislation and therefore hiring and firing. Evidence shows that countries with relatively low EPL but inefficient resolution of cases perceived as more rigid; with relatively high EPL but more efficient resolution of cases perceived as less rigid. 12

13 The two together High EPL permanent contracts AT; DE; SE; CZ; LV PT; FR; IT Low trial length High trial length LU; EE; SK; HU; PL; ES; FI SI; EL; SK Low EPL permanent contracts

14 EPL and law enforcement impact More stringent EPL for individual and collective dismissals reduces job finding and separation rates and leads to longer spells of unemployment But EPL has stronger negative effect on job finding rates in countries where it takes long to resolve a case So the efficiency of judicial system matters. 14

15 Legislation and segmentation There are a variety of non-regular contracts Temporary contracts don't always lead to permanent contracts Country differences exists 15

16 Don't blame it on EPL Other labour market institutions: Active Labour Market Policies (ALMPs) Unemployment Benefits (UB), Lifelong Learning (LLL) Macroeconomic environment and short-term vs long-term Social protection systems Product market reforms. 16

17 Thank you for your attention