Trapped or Flexible? Risk transitions and missing policies for young high-skilled workers in Europe

Synthesis report

Orlando N, Samek M, Pesce F, Hadjivassilio K, Higgins T, Rickard C, |   | European Commission | Feb 2012

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In the past three decades global economic changes, increased competition, as well as sluggish economic growth and persistent high unemployment rates have led countries and organisations to search for greater flexibility inemployment.

The diffusion of non-standard work arrangements was eased by technological improvements incommunication and information systems.

The increase in the use of non-standardised contractual forms, such as fixed-term contracts, temporary agency work, occasional work, project-work and collaborations had given rise to concerns about the quality of these jobs andabout the employment perspectives for workers.

Non-standard work arrangements are indeed often characterised by job insecurity, low wages, few career perspectives and on the job training, and low regulatory and social security protection. Furthermore, in many European countries a gap has developed between standard work (i.e. permanent and full-time employment contracts), with its associated protections and guarantees, and other contractual forms which provide access to limited welfare rights.

Young people are far more likely than other groups to be employed in non standard and insecure jobs, independently from their education and skills. Recent changes in the macroeconomic context; the ongoing economic crisis, as well as labour market reforms enhancing flexibility have increased the uncertainty in the labour market for young people, as indicated by the increase in youth unemployment, inactivity and precarious jobs.

The effects of precarious employment might be particularly negative and persistent on young workers, as problematic early experiences of transitions into work are likely to be associated with a general reduction in long term life chances (the so called 'scarring effect').

The increase in the diffusion of precarious jobs among young people, including highly educated young people, also represents a social cost. The waste of young highly educated human resources reduces growth perspectives while extending poverty risks and income inequalities within and between generations, with high budget costs related to lower fiscal revenues and higher social expenditures.

The risk that highly-qualified workers who have lost their jobs, or have accepted lower-qualified jobs in order to remain in the labour market, will lose their skills is therefore an issue to be studied in detail and that needs to betackled in the EU Member States.

In its Europe 2020 Strategy the European Commission emphasised the urgent need to confront youth high unemployment and improve skill levels, in order to deal with the crisis andprepare the economy to face the challenges which are likely to characterise the next ten years.

Within this context, three drivers of growth were identified. Concrete action at European and national levelsis required to foster: intelligent growth (the promotion of knowledge, innovation, education, and the digital society), sustainable growth (making manufacturing more efficient in its use of resources, while at the same time re-launching competitiveness), and inclusive growth (incentivising labour-market participation, the acquisition of skills, and the struggle against poverty (Eurofound, 2011).

In accordance with the Europe 2020 Strategy, this project, funded as a pilot project by the European Commissionand completed in 2011, provided a detailed examination of the labour market condition of young people with tertiary-level qualifications (ISCED level equal to or greater than 5), who had experienced deskilling and unemployment in recent years.

In order to better understand how and to what extent young highly skilled workers in Europe were experiencing job insecurity, the project provided an overview on the European labour market conditions, with a specific focus on Spain, Italy and the UK.