Inequality, Technology
and Job Polarization of
the Youth Labor Market
in Europe.
Kariappa Bheemaiah, Mark Smith
Grenoble E...
Policies and Literature
Markets have improved since the crisis, but the pace of economic
growth and employment for young p...
LIT. Review
Technological unemployment - Tinbergen’s canonical education-race model (‘75)
SBTC: Berman, Bound and Machin (...
Indicators: 9 ICT related indicators- (Source: Eurostats):
Method: Agglomerative Hierarchical Clustering (Ward’s Method).
...
Methodology
T 1 T 2 T 3 T 4 T 5 T 6 T 7 T 8 T 9
4 5 3
7
28
43
18
21
2
11
31
8
6
5 5 4
17
53
49
15
15
2
0
10
20
30
40
50
60...
-4.1 -5.2
-3
1.5
-1.5
4.7
13.5
10.6
16.2
-10
-5
0
5
10
15
20
Total
Male
Female
Total
Male
Female
Total
Male
Female
15-24 2...
ICT replacing Medium/High Skilled Workers
Youth more adversely effected than Older Population
27%
-21%
-31%
-7%
-21%
-33% ...
 Cuts and freezes of minimum wage in 21 EU Countries (mostly Low Tech Cluster)
 Real hourly minimum wages have reduced
...
17.7
10.1
30.2
9.3
5.6
16.1
11.1
8.5
27.8
16.3 15.5
17.6
15.3
18.1
27.8
22.6 23.6
10.6
7.1
13.8
27.7
14.8
44.9
12.8
16.5
6...
Youth Inequality & Education+Skills.
10
15
20
25
30
35
40
45
EU27
EUMales
EUFemales
BE
BG
CZ
DK
DE
EE
IE
ES
FR
HR
IT
CY
LV...
NRI : Exploring ICT +(employment, entrepreneurship & education).
2013 NRI Clusters = 71% Commonality with 2013 Tech Cluste...
Conclusions:
 Better ICT Better Information Growth
 Greater Flow of Information Increases employment, reactivity of
poli...
of 12

Inequality, Technology & Job Polarization of the Youth Labor Market in Europe.

While Europe continues to see the ramifications of the crisis and is threatened by the exit of Greece from its fold, a bigger and more long-standing crisis has been brewing in the background since well before the crisis. The situation of inequality from the youth perspective has received relatively little academic research. However, our research shows that in light of technological change and with the advent of increased automation, not only is the definition of work undergoing a change, but is the employment opportunity landscape for young people in Europe. Using Agglomerative Hierarchical Clustering Techniques, we compare the situation youth employability and inequality for 28 EU countries, before and after the crisis. Our analysis shows that with technology , especially ICT, making a bigger impact on the definition of tasks and skills, the youth of Europe can no longer simply rely on education as a way of escaping inequality. The youth today require more a more entrepreneurially nourishing landscape coupled with an infrastructure that allows for information to grow in order to have a fighting chance to overcome inequality and define a new sense of work in today's digital age.
Published on: Mar 4, 2016
Published in: Technology      
Source: www.slideshare.net


Transcripts - Inequality, Technology & Job Polarization of the Youth Labor Market in Europe.

  • 1. Inequality, Technology and Job Polarization of the Youth Labor Market in Europe. Kariappa Bheemaiah, Mark Smith Grenoble Ecole de Management.
  • 2. Policies and Literature Markets have improved since the crisis, but the pace of economic growth and employment for young people has stagnated in Europe (Cedefop, 2010) . One of the challenges of the Europe 2020 Strategy is to solve the problem of social exclusion Other factors Globalization + Offshoring + Technology USA: Autor Levy Murnane (2003), Autor & Acemoglu (2010) EU/OECD: Goos et all (2011(IMF study)) found that ICT was having the biggest effect. YOUTH INEQUALITY ICT ▲Opportunities ▲Income Levels ▲Social Security Systems ▲Economic Mobility ▼Poverty Levels ▼Inequality- education, jobs, earnings, policies and other factors.
  • 3. LIT. Review Technological unemployment - Tinbergen’s canonical education-race model (‘75) SBTC: Berman, Bound and Machin (‘98) Limitation of Tinbergen’s model’s  lack of a concrete definition for ‘tasks’ ALM Routinization Hypothesis (2003) & the Polarized work environment (2010)  Cognitive non-routine tasks  Cognitive routine tasks  Manual routine tasks  Manual non-routine tasks Low-Skill High-Skill Medium-Skill Low-Skill High-Skill Medium-Skill SKILL-BIASED TECHNOLOGICAL CHANGE SKILL-SUBSTITUTING TECHNOLOGICAL CHANGE
  • 4. Indicators: 9 ICT related indicators- (Source: Eurostats): Method: Agglomerative Hierarchical Clustering (Ward’s Method). Methodology Centroid method to trace the behavior of the clusters with respect to each variable. T 1 Gross value added by Information and Communication Industry. T 2 Employment in technology sectors at the national level. T 3 Employment in Information and communication (ICT) industry. T 4 Sales of Goods and Services via Internet T 5 Purchase of Goods and Services via internet T 6 Employment in knowledge-intensive activities. T 7 Total High-tech Imports as % of total trade. T 8 Total high-tech Exports as % of total trade. T 9 GERD in Business Enterprise, Government and Higher Education Sectors. Low Tech Cluster BG EE EL ES HR IT CY LV LT PL PT RO SI SK Medium Tech Cluster BE CZ IE FR LU HU MT AT High Tech Cluster DK DE NL FI SE UK 2007 - 2013
  • 5. Methodology T 1 T 2 T 3 T 4 T 5 T 6 T 7 T 8 T 9 4 5 3 7 28 43 18 21 2 11 31 8 6 5 5 4 17 53 49 15 15 2 0 10 20 30 40 50 60 70 Profile plot of Technology variables by Cluster (2007) Cluster 1 Cluster 2 Cluster3 T 1 T 2 T 3 T 4 T 5 T 6 T 7 T 8 T 9 6 5 3 18 44 37 14 15 27 24 31 9 8 5 5 4 26 70 42 14 15 2 0 10 20 30 40 50 60 70 80 90 Profile plot of Technology variables by Cluster (2013) Cluster 1 Cluster 2 Cluster 3
  • 6. -4.1 -5.2 -3 1.5 -1.5 4.7 13.5 10.6 16.2 -10 -5 0 5 10 15 20 Total Male Female Total Male Female Total Male Female 15-24 25-54 55- 64 EU 28: 2014-2002 Overall Employment levels in EU28 have declined =+3.9 PP (2007-2013) Youth Inequality & Employment. -4.7 -5.8 -3.6 -2 -3.5 -0.3 6.5 4.2 8.6 -10 -5 0 5 10 15 20 Total Male Female Total Male Female Total Male Female 15-24 25-54 55- 64 EU 28: 2014-2008 All Clusters: Young adults Level 3-6 Edu. HIGHER NEETs than Level 0-2 peers ICT replacing analytical tasks of Medium/High Skilled Workers. 15-24 Employment rate NEETS Low Tech Cluster High Tech Cluster
  • 7. ICT replacing Medium/High Skilled Workers Youth more adversely effected than Older Population 27% -21% -31% -7% -21% -33% -33%-40% -30% -20% -10% 0% 10% 20% 30% 40% Professionals Technician & asso. professional Clerical support Service and sales Skilled agricultural, forestry & fishery Craft and related trade Plant & machine operator High Skill Jobs Mid- Level Skill Jobs Low-Skill Jobs 15- 24 yr. olds : % change in sectorial employment - EU 27 31% -4% -8% 27% -8% -15% -15% -40% -30% -20% -10% 0% 10% 20% 30% 40% Professionals Technician & asso. professional Clerical support Service and sales Skilled agricultural, forestry & fishery Craft and related trade Plant & machine operator Mid- Level Skill Jobs Low-Skill Jobs 25 - 64 yr. olds: % change in sectorial employment - EU 27 Growth in Know. Based Services:  Optimistic Figures for High Tech Cluster (especially FI & NL)  But not so in Low Tech Cluster (especially EL, ES, RO)
  • 8.  Cuts and freezes of minimum wage in 21 EU Countries (mostly Low Tech Cluster)  Real hourly minimum wages have reduced  Minimum wages closely linked to economic development 4.6 2.9 0.0 0.8 -1 0 1 2 3 4 5 18 to 24 years 25 to 54 years 55 to 64 years 65 years and above EU 27 - Average Change in risk of poverty rate according to age (2007-2013) Youth Inequality & Earnings. End 2013- Average In-Work-At-risk-of-poverty-rate  18-24 years= 11.4%  25-54 years = 8.8%  55-64 years = 8.5%
  • 9. 17.7 10.1 30.2 9.3 5.6 16.1 11.1 8.5 27.8 16.3 15.5 17.6 15.3 18.1 27.8 22.6 23.6 10.6 7.1 13.8 27.7 14.8 44.9 12.8 16.5 6 13 12.8 -10 0 10 20 30 40 50 EU27 BE BG CZ DK DE EE IE EL ES FR IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK PP change from 2007 to 2013 for In-Work-at-risk-of-poverty, based on level of education (0-2) (3 & 4) (5 & 6) (0-2) PP change since 2008 (3 & 4) PP change since 2008 (5 & 6) PP change since 2008 Youth Inequality & Education+Skills.  Lower educated face greater inequality risks, especially in Low & Medium Tech Countries.  Young People & Young Adults - 1.1 PP increase of NEET rates for low skilled 7 PP for the medium/high skilled.
  • 10. Youth Inequality & Education+Skills. 10 15 20 25 30 35 40 45 EU27 EUMales EUFemales BE BG CZ DK DE EE IE ES FR HR IT CY LV LT HU MT NL AT PL PT RO SI SK FI SE UK Level 5-6 Students enrolled in STEM as % of all students 2007 2012 2 per. Mov. Avg. (2007) 2 per. Mov. Avg. (2012)  More young adults ( especially in Low Tech Cluster ) participating in Edu. Levels 5 to 8.  But this is not reflected in employment figures. ….Impact of Education in reducing inequality for the youth?
  • 11. NRI : Exploring ICT +(employment, entrepreneurship & education). 2013 NRI Clusters = 71% Commonality with 2013 Tech Cluster Grouping Youth Inequality, ICT & NRI Politicaland Regulatory Businessand Innovation 9 9 Infrastructure 4 Affordability3 Skills 4 Individual 7 Business 6 Government 3 Economic Impacts 4 Environment Social Impacts 3 Economic Impacts UsageReadiness Social Impacts Impact Low Tech Cluster Low NRI Scores. Higher youth unemployment, lower earnings (stagnant min.wages), reduced spending on ALMPs (except PL, SI & SK), qualified NEETs Med. Tech Cluster Competitive NRI scores. Adversely impacted by policies - ALMPs (entrepreneurship) vs PLMPs. High Tech Cluster High NRI scores. Growth of Emp. in Know. Services, Low unemployment levels  Apprenticeships  Skills development, flow of knowhow and tacit knowledge.
  • 12. Conclusions:  Better ICT Better Information Growth  Greater Flow of Information Increases employment, reactivity of policies, adapt to new tech, more entrepreneurship, greater mobility, spread of education…gives youth a better chance to reduce the inequality.  Growth of Economies Growth of Flow of Information & ICT Next Steps:  Youth Focused Entrepreneurship & Innovation policies that allows Information to Grow (leveraging ICT).  Development of diverse skills in employment to complement formal schooling (apprenticeship programs).  More granular research in measuring the impact of ICT at micro-levels  ICT and Social Infrastructure development as a priority. Conclusions, Next steps

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