2014_09_19_naec seminar_how good is your job

HOW GOOD IS YOUR JOB?

MEASURING AND ASSESSING JOB QUALITY

Sandrine CazesOECD Statistics Directorate (STD)

New Approaches to Economic ChallengesSeminar, 19 September 2014

Alexander HijzenOECD Directorate for Employment, Labour and Social Affairs (ELS)

Anne Saint-MartinOECD Directorate for Employment, Labour and Social Affairs (ELS)

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• “Jobs, inequality and wages: The role of non-standard work” (ELS, presented in NAEC Seminar in February 2014): − Looks at the drivers of labour market inequalities and how

those translated into earnings and income inequalities.

− Follow-up to the inequality work documented in Divided we Stand (OECD 2011)

• “Job Quality, Labour Market Performance and Well-Being” (ELS and STD, the focus of today’s seminar)− First major output “How is your job?” was published in

Employment Outlook 2014

Assessing job quality (NAEC Project B2)

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• Why does job quality matter?– A key element of individual well-being (i.e. an end in its

own right) – Determines labour force participation, worker

commitment and productivity (i.e. a means to greater economic performance)

• Despite the importance of job quality, it has received limited attention in the international policy debate – Assessment of policies and institutions has tended to focus

on their impact on job quantity (e.g. Reassessed Jobs Strategy, Europe 2020)

– Giving more attention to job quality would allow for a more comprehensive assessment of the role of policies and institutions

• A major obstacle to giving more prominence to job quality has been the difficulties of defining and measuring it– Multi-dimensional nature of job quality– Comparability of job quality indicators over time, across

countries and population groups

Background and motivation

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• The aim of the project is to bring job quality to the forefront of the policy debate on economic performance – By allowing labour market performance to be assessed in

terms of more and better jobs– Part of quest to go beyond GDP by focusing on well being

(OECD How is life?)

• Seeks to achieve this through a number of different outputs– Analytical work on job quality – Job quality indicators based on existing data – Guidelines for the collection of relevant and comparable

information on job quality (e.g. module that NSOs could include in their surveys)

• Collaboration between the Directorate of Employment and Labour Social Affairs and Statistics Directorate of the OECD– Two-year undertaking, from October 2013 , with further

follow-up work planned for PoW 2015-2016

OECD project on job quality, labour market performance and well-being

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• Propose a new conceptual and operational framework to measure and assess job quality

• Not just a disparate set of statistics nor all-encompassing (e.g. UNECE, ILO)

• Allow assessment of labour market and economic performance through emphasis on worker well-being

• Provide an overview of job quality across OECD countries and socio-economic groups

• NB: Focus on OECD countries… for the moment

How good is your job? Measuring and assessing job quality

How good is your job?

1. A framework for measuring and

assessing job quality

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• Job quality refers to those aspects of employment that contribute to worker well-being inherently multi-dimensional construct

• Drawing on the literature on well-being, 3 key and complementary dimensions of job quality are identified:

1. Earnings quality

2. Labour market security

3. Quality of the working environment

• Should be considered jointly with job quantity to assess labour market performance and the role policies and institutions

Defining the main dimensions of job quality

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• Focus on outcomes experienced by workers – Consistent with well-being perspective– Allows evaluating the role of policies and institutions

• Concentrate on individual workers– To take account of the distribution of job quality

outcomes– Allows assessing to what extent poor outcomes on one

dimensions are associated with poor outcomes on another

• Favours objective features of job quality– Ensures better comparability of outcomes across

countries and time

Principles for the measurement of job quality

How good is your job?

2.1 Earnings quality

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• At the individual level– Gross versus net earnings– Hourly or other frequency

• At the aggregate level– How much emphasis should be given to distribution? – Can we construct a single indicators that takes account

of both average earnings and its distribution?

Measuring earnings quality: Average earnings and its distribution

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• Level of earnings and life satisfaction are positively correlated across countries as well as between persons within countries

• For a given level of average earnings, overall well-being tends to be higher the more equal is its distribution– Life satisfaction rises at a decreasing rate with

earnings – People tend to display an intrinsic dislike of high

inequality in society (inequality aversion)

Earnings quality should take account of both average earnings and its distribution

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Measuring earnings quality in terms of average earnings and its distribution

• Generate aggregate index using general means framework with inequality aversion (Atkinson, 1970)

• Assume “moderate” degree of inequality aversion (weight of 2/3 on 1st tercile, ¼ on 2nd tercile and remainder on 3rd decile)

How good is your job?

2.1 Earnings quality

2.2 Labour market security

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Measuring labour market security:Unemployment risk and insurance

• Existing frameworks typically focus on job security using indirect proxies such as incidence of temporary or short-tenured workers

• Focus on expected cost of unemployment

– Unemployment risk• probability of becoming unemployed • expected duration of unemployment –-> measured using data on unemployment inflows and outflows

– Insurance against risk of unemployment • accessibility of benefits• their generosity and maximum duration • the progressivity of the tax system -> coverage rate times the average net replacement rate of unemployment insurance and assistance

• Definition of labour market security effectively assumes that the cost of unemployment is limited to the associated loss of income

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Labour market insecurity in OECD countries

Share of previous earnings, 2010

Source: OECD calculations based on the OECD Unemployment Duration database, OECD Benefit Recipients database and OECD Taxes and Benefits database.

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Unemployment risk and insurance have important implications for well being

Estimated effects of unemployment risk on life satisfaction and the compensating effects of effective unemployment insurance.

Source: OECD calculations based on the European Union Statistics on Income and Living Conditions and the European Social Survey.

How good is your job?

2.1 Earnings quality

2.2 Labour market security

2.3 Quality of the work environment

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• Depends on the balance between job demands which tend to impair health and job resources which tend to mitigate the effects of demands

• Job strain: combination of excessive job demands and insufficient resources that is likely to cause health impairment– Construct measures for each JD and JR and relate them to health

outcomes – Define job strain in terms of combination of JD and JR associated

with poor health at individual level– Use EWCS for core analysis or combination of EWCS /ISSP to

extend country coverage

Measuring quality of the working environment: Job demands, job resources and job strain

• Job demands– time pressure – physical health risks– (workplace intimidation)

• Job resources

– work autonomy & learning– good relationships with

colleagues– (good management

practices )

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Quality of the working environment in OECD countries

Source: 4th European Working Conditions Survey, Eurofound , and International Social Survey Programme – Work Orientations Module

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Job strain and work-related health

Source: 5th European Working Conditions Survey, Eurofound (2010).

How good is your job?

3. A statistical portrait of job quality

in OECD countries

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How does job quality compare across countries?

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How does labour market performance compare across countries?

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• Youth and low-skilled not only tend to have relatively low employment rates but also weak job quality outcomes– Education is positively associated with job quality in all three

dimensions. – Age is associated with higher earnings quality and better QWE.

Labour market security is highest for prime-age workers (30-49).– Women have lower earnings, but have otherwise similar outcomes

to men.

• Non-standard work tends to be associated with weaker job quality outcomes but not necessarily all– Temporary work is not only negatively associated with earnings

quality and labour market security but also with QWE. – Part-time work is associated with lower earnings quality (in terms

of hourly wages) and labour market security, while QWE tends to be higher.

Which workers hold quality jobs?

How good is your job?

4. Wrap up

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• New conceptual and operational framework to measure and assess job quality across countries and socio-economic groups

• Actual implementation and measurement flexible and can be adapted to one’s preferences or the specific context

Concluding remarks

Dimensions Main labour market and

social policies

Earnings quality

Growth-enhancing policies

Education policies

Wage-setting institutions

Labour market security

Employment protection legislation

Tax and benefit systems

Active labour market policies

Quality of the working environment

Regulations for working time and occupational health and safety

Occupational health care services

Vocational training

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• Move towards a more dynamic perspective that places more emphasis on the prospects for career advancement provided by jobs

• Extend the analysis of job quality to emerging economies

• Assess labour market performance in terms of the quantity and quality of jobs and the role of policies and institutions

Analytical work ahead

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• Inventory for Job quality – identify data sources as well as data gaps – document key insights on job quality

• OECD database on job quality – to become available via OECD.Stat– with information by country and eventually also by

socio-economic group– gradually extend country coverage to non-OECD

members

• OECD guidelines on the measurement of Job Quality– possibly including a new questionnaire that countries

could implement as ad hoc module in their Labour Force Survey

Ambitious statistical agenda

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• For further information on OECD work on job quality please contact:

– Sandrine Cazes (STD): sandrine.cazes@oecd.org

– Alexander Hijzen (ELS): alexander.hijzen@oecd.org

– Anne Saint-Martin (ELS): anne.saintmartin@oecd.org

Thank you!