The Job Quality Index from PIAAC Singapore and International Comparisons Fourth PIAAC International Conference 22 nd of November 2017 Johnny Sung Simon Freebody Jazreel Tan
Our Presentation 1 Why Skills Policy Needs to Look at Job Quality (JQ) 2 The Connections Amongst Business Model, JQ and Skills 3 Measuring JQ with PIAAC Data 4 Concluding Remarks
The Motivation for Measuring Job Quality (JQ) The Importance of Skills Utilisation The Business Performance Survey, 2016 Underutilised: 39.2% Skills underutilised Underskilled: 9.4% Wellmatched: 51.4% N=3801 Skills wellmatched Skills underskilled % of existing staff who are currently able to perform the job adequately but not beyond. % of existing staff who are unable to cope with their existing duties. % of existing staff who are currently able to cope with more demanding duties than they currently have. Source: Business Performance and Skills Survey (BPSS), 2016 3
The Motivation for Measuring Job Quality (JQ) The Policy Perspective The policy dilemma between the need for job growth and jobs that are useful for social progress Having a job remains the best safeguard against poverty and exclusion. However, recent employment increases have not sufficiently reached those furthest away from the labour market, and jobs have not always succeeded in lifting people out of poverty. European Commission. (2009). Growth, Jobs and Social Progress in the EU: A contribution to the evaluation of the social dimension of the Lisbon Strategy. P. 4 4
The Motivation for Measuring Job Quality (JQ) The Policy Perspective The policy dilemma between the need for job growth and jobs that are useful for social progress The development of precarious forms of employment, often characterised by a strong gender dimension has contributed to persistently high levels of in-work poverty. European Commission. (2009). Growth, Jobs and Social Progress in the EU: A contribution to the evaluation of the social dimension of the Lisbon Strategy. P. 4 5
The Motivation of Measuring Job Quality (JQ) The Policy Perspective The policy dilemma between the need for job growth and jobs that are useful for social progress During the recovery period after the financial crisis, in-employment appears to be not all positive The crisis has also deepened inequalities. Job creation has disproportionately taken the form of fixed-term or temporary jobs in many advanced economies, while in emerging economies new jobs tend to be in the informal, unregulated economy. OECD Year Book 2015 http://www.oecd.org/els/more-better-jobsinclusive-recovery.htm 6
The Motivation of Measuring Job Quality (JQ) The Policy Perspective The policy dilemma between the need for job growth and jobs that are useful for social progress During the recovery period after the financial crisis, in-employment appears to be not all positive In Singapore, the two major policies that are relevant to skills. But for them to be effective, they need better jobs, and not just any jobs: Clearly, there is a need to promote the creation of not just more jobs, but also better jobs. OECD Year Book 2015 http://www.oecd.org/els/more-better-jobsinclusive-recovery.htm - The SkillsFuture Policy - The Industry Transformation Policy 7
The Motivation of Measuring Job Quality (JQ) The Job Perspective Research has identified that if a job is required to use very few skills, it often coincides with very little job autonomy, involving very few tasks (which may well also be repetitive), poor working hours and little career prospect and job security (Form, 1987; Lloyd, 2008) Almost one-fifth of American workers have bad jobs. They endure low wages, poor benefits, schedules that change with little if any notice, and few opportunities for advancement. The conventional wisdom is that many companies have no choice but to offer bad jobs especially retailers whose business models entail competing on low prices. Ton, Z. (2012) Why Good Jobs Are Good for Retailers. Harvard Business Review, Jan-Feb Issue. 8
The Connection between Business Model, JQ and Skills The job and organisation perspective of JQ So what brings about bad jobs? Productive System Based Skills Policy The Industry The Sectoral Transformation Approach to Skills Development Policy Human Capital Based Skills Needs Supply of Skills (Human Capital Investment) SkillsFuture Market Failure Skills Policy 9
Business Model and Impact of Skills Utilisation Inside the black box 10
Increasing Differentiation Business Model and Impact of Skills Utilisation Inside the black box Value Add Strategy (VA) Customisation/ Differentiation High VA, Low SS Customised Product, Task-Focused High VA, High SS Customised Product, People-Focused Standardisation/ Mass Production Low VA, Low SS Standard Product, Task-Focused Low VA, High SS Standard Product, People-Focused Task-Focused People-Focused Increasing Focus on People and Their Skills Skills Strategy (SS) 11
Business Model and Impact of Skills Utilisation Inside the black box some results from BPSS % of establishments reporting increased profit Discretionary effort mean scores 25.3% 40.1% - 0.15 0.26 High VA, Low SS Customized Product, Task-Focused High VA, High SS Customized Product, People-Focused High VA, Low SS Customized Product, Task-Focused High VA, High SS Customized Product, People-Focused 22.0% 30.5% - 0.29 0.20 Low VA, Low SS Standard Product, Task-Focused Low VA, High SS Standard Product, People-Focused Low VA, Low SS Standard Product, Task-Focused Low VA, High SS Standard Product, People-Focused %... reporting increased revenue 30.0% High VA, Low SS Customized Product, Task-Focused 44.7% High VA, High SS Customized Product, People-Focused N=3801 25.9% Low VA, Low SS Standard Product, Task-Focused 34.1% Low VA, High SS Standard Product, People-Focused Source: Business Performance and Skills Survey (BPSS), 2016 12
Approaches to Measuring JQ Subjective vs Objective measurements Adopted a objective approach Green s (2009) Dimensions Pay Skills Autonomy Effort Security PIAAC Indicators for Job Quality Level of hourly pay; equality of pay Level and variety of skills use Subjective level of discretion Average working hours per week Type of contract 13
JQ Comparison: Level of Pay We use median hourly wage (including bonuses) in $US PPP as our indicator of level of pay. The level of pay is considered one of the central elements of Job Quality. Despite its obvious importance, pay is not always cited by employees as the most important factor. Norway Denmark Netherlands Ireland Belgium Singapore Austria Finland Australia Canada Sweden Germany United States United Kingdom New Zealand Japan Cyprus Italy France Korea Spain Israel Greece Czech Republic Slovenia Estonia Poland Slovak Republic Chile Lithuania $23.99 $23.97 $20.94 $20.44 $20.38 $18.47 $18.38 $18.12 $17.50 $17.36 $17.32 $17.29 $17.09 $16.86 $16.61 $15.30 $14.38 $14.27 $14.14 $14.07 $13.39 $11.33 $8.93 $8.34 $8.16 $7.98 $7.92 $7.57 $6.97 $6.17 $- $10.00 $20.00 $30.00 14
JQ Comparison: Equality of Pay We use the ratio of the 90th percentile to the 10th percentile of hourly pay in US$ PPP to measure equality. Equality of pay can be considered important as it is likely to impact the perceived fairness of the system as a whole. Denmark Sweden Norway France Finland Belgium Czech Republic New Zealand Slovenia Australia Netherlands Italy Austria Ireland Greece United Kingdom Spain Lithuania Slovak Republic Poland Cyprus Japan Canada Israel Germany Estonia United States Korea Singapore Chile 2.19 2.27 2.27 2.42 2.47 2.52 2.78 2.80 2.80 2.92 2.96 3.22 3.30 3.37 3.39 3.43 3.57 3.80 3.87 3.89 3.90 3.97 4.10 4.40 4.58 4.58 5.10 5.43 6.38 6.67 0.00 2.00 4.00 6.00 8.00 15
JQ Comparison: Level of Skills Use We use the skills use variables covering: Numeracy; Reading; Writing; Influencing; Planning; ICT. The average overall level of the six skills groups is used as a measure of skills level of the job. High skilled jobs are associated with higher levels of challenge, fulfillment and ownership. Australia New Zealand United States United Kingdom Ireland Chile Canada Singapore Spain Korea Slovenia Netherlands Belgium Estonia Slovak Republic Israel Denmark Poland Czech Republic Italy Austria Finland Norway Lithuania Germany France Cyprus Sweden Japan Greece 2.569 2.565 2.526 2.491 2.484 2.458 2.425 2.414 2.393 2.385 2.373 2.369 2.340 2.337 2.333 2.326 2.325 2.323 2.322 2.307 2.300 2.286 2.263 2.261 2.241 2.232 2.216 2.210 2.184 2.176 1.750 2.000 2.250 2.500 2.750 16
JQ Comparison: Job Autonomy We use task discretion as the proxy from from PIAAC. Task discretion provides a sense of ownership which then affect skills utilisation. It is a longstanding feature of job quality throughout most studies. Japan 2.42 Denmark 2.36 Austria 2.36 Sweden 2.31 Germany 2.29 Finland 2.26 Belgium 2.23 Norway 2.19 Czech Republic 2.17 Israel 2.12 New Zealand 2.05 Netherlands 2.02 Korea 2.01 Poland 1.99 United Kingdom 1.92 United States 1.91 Canada 1.91 Estonia 1.90 Australia 1.89 Spain 1.88 Slovak Republic 1.78 Slovenia 1.77 France 1.77 Italy 1.76 Cyprus 1.76 Ireland 1.75 Singapore 1.67 Greece 1.63 Lithuania 1.61 Chile 1.61 0.00 1.00 2.00 3.00 17
JQ Comparison: Job Intensity Effort, or intensity, is measured here by the average working hours of fulltime employees in PIAAC. There is an assumption that the longer the working hours the lower the quality of the job. Norway France Denmark Finland Cyprus Lithuania Netherlands Ireland Spain Italy Estonia Sweden United Kingdom Canada Poland Belgium Slovenia Slovak Republic Czech Republic Germany Austria Australia New Zealand United States Chile Greece Japan Korea Israel Singapore 40.05 40.07 40.28 40.55 40.57 41.05 41.15 41.29 41.43 41.60 41.62 41.97 42.06 42.33 42.48 42.72 42.81 43.09 43.47 43.55 43.56 43.63 43.78 44.26 44.62 45.04 45.22 45.32 45.35 46.10 35.00 40.00 45.00 50.00 18
JQ Comparison: Job Security Security is one of the most important aspects of job quality. In the absence of no better indicators, we use the percentage of the workforce that are in permanent employment. Belgium Norway Lithuania Sweden Denmark Estonia Austria France New Zealand Finland Slovenia Germany Japan Slovak Republic Italy United Kingdom Czech Republic Netherlands Spain Cyprus Greece Ireland Australia Poland Chile Israel Singapore Korea 0.937 0.916 0.916 0.904 0.898 0.894 0.883 0.881 0.879 0.877 0.871 0.869 0.865 0.862 0.859 0.845 0.842 0.826 0.823 0.810 0.791 0.769 0.730 0.728 0.706 0.622 0.615 0.588 0.000 0.250 0.500 0.750 1.000 19
JQ Comparison: The JQ Index By standardising the individual items and combining into a single standardised score, we can get a sense of where Singapore sits in terms of the overall quality of jobs. Denmark Norway Belgium Finland New Zealand Netherlands Sweden United Kingdom Austria Ireland Australia France Canada Spain Italy Germany Czech Republic United States Slovenia Japan Estonia Cyprus Lithuania Slovak Republic Poland Israel Korea Greece Singapore Chile -1.5-1 -0.5 0 0.5 1 1.5 20
GDP per hour worked OECD Life Satisfaction Measure Comparisons with Auxiliary Measures Given that job quality is positioned as being strongly associated with life satisfaction and economic performance, we would hope to see and association between overall job quality and measures of life satisfaction and performance. The scatter plots below show good examples of this. 95 85 75 R² = 0.4647 8 7.5 R² = 0.4401 65 7 55 45 6.5 35 6 25 15 5 (3.000) (2.000) (1.000) - 1.000 2.000 3.000 Job Quality Index 5.5 5 (3.000) (2.000) (1.000) - 1.000 2.000 3.000 Job Quality Index 21
Job related training Literacy Score Comparisons with Auxiliary Measures We also correlate job quality with the skills proficiency and skills development metrics. 80% 70% R² = 0.4532 305 295 R² = 0.3314 60% 285 50% 40% 30% 275 265 20% 255 10% 245 0% (3.000) (2.000) (1.000) - 1.000 2.000 Job Quality Index 235 (3.000) (2.000) (1.000) - 1.000 2.000 Job Quality Index 22
Concluding Remarks Despite the rising importance of job quality in the policy debate, it has not yet translated into concrete policy action in many countries. Also despite our effort, job quality is in general hard to define and quantify. What aspects of job quality are most important for workers well-being and how can they be measured? How does job quality vary across countries and socio-economic groups? What can policy makers do to promote job quality and help to create jobs at the same time? There is a need for good JQ research data (in countries outside Europe). 23
Thank You