The Public Employment Service: Greece, Ireland, Portugal

257 Pages·1998·0.67 MB·English

by  Organization for Economic Co-operation and Development

TTHHEE PPUUBBLLIICC
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GREECE, IRELAND,
PORTUGAL
THE PUBLIC
EMPLOYMENT SERVICE
Greece
Ireland
Portugal
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960,
and which came into force on 30th September 1961, the Organisation for Economic
Co-operation and Development (OECD) shall promote policies designed:
– to achieve the highest sustainable economic growth and employment and a rising
standard of living in Member countries, while maintaining financial stability, and
thus to contribute to the development of the world economy;
– to contribute to sound economic expansion in Member as well as non-member
countries in the process of economic development; and
– to contribute to the expansion of world trade on a multilateral, non-discriminatory
basis in accordance with international obligations.
The original Member countries of the OECD are Austria, Belgium, Canada,
Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the
United Kingdom and the United States. The following countries became Members
subsequently through accession at the dates indicated hereafter: Japan (28th April 1964),
Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973),
Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary
(7th May 1996), Poland (22nd November 1996) and Korea (12th December 1996). The
Commission of the European Communities takes part in the work of the OECD
(Article 13 of the OECD Convention).
Publie´ en franc¸ais sous le titre :
LE SERVICE PUBLIC DE L’EMPLOI :
Gre`ce, Irlande, Portugal
(cid:211) OECD 1998
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FOREWORD
This report examines the operations of the Public Employment Service in
three OECD countries: Greece, Ireland and Portugal. It is the seventh publication
in a series of OECD reviews, the most recent being Labour Market Policies in
Switzerland (1996), The Public Employment Service: Denmark, Finland, Italy (1996), The
Public Employment Service: Austria, Germany, Sweden (1996) and The Public Employment
Service: Belgium (1997).
These reviews are intended to contribute to the follow-up of the OECD Jobs
Study. They pay particular attention to institutions and practices, essential for the
effective pursuit of labour market policies. A synthesis of the findings and conclu-
sion of earlier reviews was published in The OECD Jobs Strategy: Enhancing the
Effectiveness of Active Labour Market Policies (1996).
This volume, based on visits by the Secretariat to the countries reviewed
from May to October 1997, was discussed by the Employment, Labour and Social
Affairs Committee in March 1998. It is published on the responsibility of the
Secretary-General of the OECD.
3
TABLE OF CONTENTS
1. THE POLITICAL AND LABOUR MARKET BACKGROUND ................ 9
A. General characteristics ....................................... 9
B. National backgrounds ........................................ 10
1. Greece ................................................ 11
2. Ireland ................................................ 19
3. Portugal ............................................... 27
2. STRUCTURE, MANAGEMENT AND MAIN FUNCTIONS OF THE PUBLIC
EMPLOYMENT SERVICE ......................................... 49
A. Labour market agencies and actors.............................. 49
1. Greece ................................................ 49
2. Ireland ................................................ 52
3. Portugal ............................................... 56
4. Summary .............................................. 60
B. PES autonomy, social partner involvement and mission statements ..... 61
1. PES autonomy and strategic planning ......................... 61
2. Board structure and representation of the social partners.......... 62
3. Mission statements....................................... 65
C. Labour market policy financing and spending...................... 66
1. Financing and budgetary control............................. 66
2. Comparative measures of labour market spending ............... 69
D. Office structure, internal organisation and work methods ............. 69
1. Greece ................................................ 70
2. Ireland ................................................ 71
3. Portugal ............................................... 72
4. PES decentralisation and management methods................. 74
5. Benefit administrations in Ireland and Portugal.................. 76
E. Office resources ............................................ 77
1. Staff numbers and workload ................................ 77
2. Staff status and qualifications ............................... 80
3. National computer databases and systems ..................... 82
4. Planning and information resources .......................... 83
3. THE JOB-BROKING FUNCTION.................................... 89
A. Introduction ............................................... 89
B. Active and self-service placement functions ....................... 90 5
THE PUBLIC EMPLOYMENT SERVICE: GREECE, IRELAND, PORTUGAL
1. Framework for PES job-broking.............................. 90
2. General approaches to matching............................. 90
3. Initial job-seeker registration ............................... 93
4. Initial vacancy registration.................................. 94
5. The type of vacancies available and information recorded ......... 95
6. Screening and matching of job-seekers to vacancies.............. 96
7. Vacancy advertising and display and other self-service information .. 98
8. Maintenance of the job-seeker register........................ 99
9. Special services for collective dismissals ...................... 102
C. Employer outreach, vocational guidance, job-search aids
and the counsellor’s tool kit ................................... 103
1. Employer outreach in relation to placement services ............. 103
2. Vocational guidance ...................................... 104
3. Job-search aids .......................................... 106
4. The employment officer’s tool kit ............................ 107
D. Recent innovations in employer and job-seeker outreach............. 109
1. Employment Promotion Centres in Greece ..................... 110
2. Local Employment Services in Ireland ........................ 111
3. UNIVAs and Job Clubs in Portugal............................ 113
E. Private placement agencies ................................... 113
F. Labour market penetration and placement patterns ................. 114
4. UNEMPLOYMENT BENEFITS AND RELATED INCOME SUPPORT ......... 123
A. General and historical overview ................................ 123
B. Current unemployment benefit entitlements....................... 129
1. Regular UI benefits....................................... 129
2. Extraordinary benefits in Greece............................. 129
3. Guaranteed income systems................................ 131
C. Beneficiary numbers and benefit coverage ........................ 133
D. Implementation of labour market eligibility criteria.................. 138
1. Institutional background ................................... 138
2. Application procedures and processes ........................ 139
3. Definition of labour market eligibility criteria ................... 141
4. Application of labour market eligibility criteria .................. 141
5. Communications between placement services and the benefit
administration........................................... 143
6. Sanction frequencies and appeals............................ 144
E. Fraud and fraud control ...................................... 145
1. Cross-checks between official records ......................... 145
2. Measures to tackle undeclared working ....................... 146
3. Evidence of fraud and Ireland’s anti-fraud drive ................. 146
F. Disability and early retirement benefits .......................... 147
1. Invalidity benefits........................................ 148
2. Early retirement benefits .................................. 149
5. ACTIVE LABOUR MARKET PROGRAMMES........................... 157
6 A. Introduction ............................................... 157
TABLE OF CONTENTS
B. Overview of active labour market programmes ..................... 157
1. Spending .............................................. 157
2. Target groups ........................................... 158
3. Job-search assistance, facilitation and incentive programmes ....... 160
C. Subsidies to employment for youths and adults.................... 161
1. Subsidies to employment in the private sector.................. 161
2. Self-employment ........................................ 164
3. Direct job creation ....................................... 165
4. The impact of subsidised employment programmes.............. 170
D. Training for youths and adults ................................. 174
1. The training market ...................................... 174
2. Youth training ........................................... 179
3. Training for adult unemployed .............................. 181
4. Training for the employed ................................. 186
6. SUMMARY AND CONCLUSIONS ................................... 199
A. PES structure, management and main functions (Chapter 2) ........... 199
B. The job-broking function (Chapter 3) ............................ 204
C. Unemployment benefits and related income support (Chapter 4)....... 207
D. Active labour market programmes (Chapter 5) ..................... 209
E. Final remarks .............................................. 212
Annex: THE ROLE AND IMPACT OF THE EUROPEAN SOCIAL FUND (ESF)
AND OTHER STRUCTURAL FUNDS IN GREECE, IRELAND AND PORTUGAL 217
A. Overview ................................................. 217
B. The ESF in the three countries reviewed ......................... 221
1. Greece ................................................ 221
2. Ireland ................................................ 223
3. Portugal ............................................... 226
C. Elements of an assessment.................................... 228
1. Negotiation of the national CSFs............................. 228
2. Implementation of the CSFs ................................ 230
3. Global issues of EU intervention............................. 232
NOTES........................................................... 235
GLOSSARY........................................................ 251
BIBLIOGRAPHY .................................................... 255
LIST OF TABLES
1.1 Area, population and GDP ....................................... 36
1.2 Population living abroad, 1990 .................................... 37
1.3 Population aged 25 to 64 by the highest completed level of education, 1995 38
1.4 Composition of employment by main sector and professional status ....... 39
1.5 Labour force participation rates, 1996............................... 41
1.6 Unemployment rates ........................................... 42
1.7 Composition of unemployment.................................... 43 7
THE PUBLIC EMPLOYMENT SERVICE: GREECE, IRELAND, PORTUGAL
1.8 Bargaining, wage determination and employment regulation indicators ..... 44
1.9 Government spending and social security contribution rates, 1995 ......... 46
1.10 Social expenditure, 1995......................................... 47
2.1 Employment office networks and staff resources ...................... 86
2.2 Indicators of PES staff workload ................................... 87
3.1 Basic flows, stocks and market share indicators, 1992-96................. 121
3.2 PES placements into regular employment and flows into selected
PES-managed labour market measures targeting the unemployed ......... 122
4.1 Main changes to unemployment benefit entitlements in Greece, Ireland
and Portugal.................................................. 151
4.2 Unemployment benefit systems in 1996 ............................. 153
4.3 Indicators for the benefit coverage of unemployment .................. 155
4.4 Labour market behavioural criteria for eligibility for unemployment benefits 156
5.1 Public expenditure on labour market programmes .................... 189
5.2 Participant flows into labour market programmes ..................... 190
5.3 Composition of expenditure on active labour market measures, 1996....... 191
5.4 Public expenditure and participant flows into ALMPs, Greece, 1996 ........ 192
5.5 Public expenditure and participant flows into ALMPs, Ireland, 1996 ........ 193
5.6 Public expenditure and participant flows into ALMPs, Portugal, 1996 ....... 194
5.7 Subsidy rates in various hiring subsidy schemes in Greece, Ireland
and Portugal, 1996 ............................................. 195
5.8 Self-employment programmes in Greece, Ireland and Portugal............ 196
5.9 Outcomes from Irish ALMPs since 1994.............................. 198
6.1 Summary of specific policy recommendations for the three countries....... 200
LIST OF CHARTS
1.1 Unemployment rates according to different definitions, 1970-96 ........... 35
2.1 Greece: main actors in labour market policy.......................... 50
2.2 Ireland: main actors in labour market policy.......................... 53
2.3 Portugal: main actors in labour market policy ........................ 58
3.1 Registered unemployed and vacancies, 1980-96 ....................... 116
3.2 Placements and newly registered vacancies, 1980-96 ................... 118
4.1 Unemployment and invalidity benefit recipients, 1970-96, Greece ......... 124
4.2 Unemployment, early retirement and invalidity benefit recipients, 1970-96,
Portugal ..................................................... 125
4.3 Unemployment, early retirement and invalidity benefit recipients, 1970-96,
Ireland ...................................................... 126
4.4 Index of benefit entitlements, 1961-95 .............................. 127
4.5 Gross replacement rates by unemployment duration, 1996............... 130
LIST OF BOXES
2.1 Area-based Partnerships in Ireland................................. 55
2.2 The Local Employment Service ................................... 57
3.1 Registration of hirings and dismissals in Greece....................... 91
4.1 Ireland’s special Live Register sample in the 1996 labour force survey...... 135
5.1 Proposed voucher system in Greece................................ 177
8
1
THE POLITICAL AND LABOUR MARKET
BACKGROUND
A. GENERAL CHARACTERISTICS
Greece, Ireland and Portugal all have relatively small populations – Greece
and Portugal about 10 million, and Ireland about 3 600 000 – with population
densities below the EU average but above the OECD average (Table 1.1). Only
twenty years ago a third of employment in Greece and Portugal, and a fifth in
Ireland, was in agriculture. These remain the countries of the European Union
(EU) which have among the lowest levels of educational attainment among the
population of working age (Table 1.3) and the highest incidences of agricultural
employment (Table 1.4). In earlier decades, waves of emigration occurred, which
have now greatly slowed down or stopped. Insofar as incomplete estimates can
be made, these remain the OECD countries with the highest proportions of their
native or national populations living abroad (Table 1.2). Up to the mid-1980s, per
capita incomes in the three countries had long stayed far below the OECD aver-
age, around 50 per cent of it in Portugal and 60 per cent in Greece and Ireland, on
a purchasing power parity basis. This qualified the countries to become the
greatest beneficiaries, in per capita terms, of the European Union’s Structural
Funds (see Annex).
The common patterns of high agricultural employment, emigration by the
population of working age, and low GDP might be interpreted as consequences of
the countries’ location on the periphery of Europe in an age of continuing urban
concentration.1 Despite such similarities, various social and labour market charac-
teristics which are more related to economic policies show some sharp contrasts.
Greece and Portugal, in common with Italy and Spain, follow a southern European
pattern with high self-employment, strict regulation of salaried employment which
aims at combating tax evasion2 as well as providing security to salaried workers,
extensive state involvement in industry, and an absence of income support for
the unemployed who fall outside the salaried sector (Tables 1.7 and 1.10; see also
Chapter 4). In this pattern, a high share of the unemployed are youths and are
living in a household where another person is employed, and workers with low
educational attainment have a relatively low unemployment rate (Tables 1.6 9
THE PUBLIC EMPLOYMENT SERVICE: GREECE, IRELAND, PORTUGAL
and 1.7). Ireland’s share of self-employment remains almost the highest in the
OECD outside Southern Europe and the recent entrants to the OECD, but
Ireland’s composition of unemployment is in several respects (by education level,
sex and household situation) very different from that of Greece or Portugal.
Another contrast is that Ireland had until the early 1980s a very high birth rate:3
the birth rates in Portugal and Greece were then only slightly above average, and
are now particularly low at 1.4 children per woman.
Portugal’s labour market diverges in some respects from those of other
southern European countries. Female labour force participation in Portugal has
long been above the OECD average (Table 1.5). University graduates have a low
unemployment rate (Table 1.6). Some indicators fail to support the idea that its
labour market is heavily regulated (see the last column of Table 1.8). Over about a
decade, Portugal has reformed many economic policies using models chosen from
among the richer EU countries, in areas as varied as the reduction of its initially
high minimum wage, the privatisation of state enterprises, strengthened meas-
ures to tackle tax evasion, fiscal consolidation to meet the criteria for European
Monetary Union (EMU), and the recent introduction of a guaranteed income
benefit. Some key indicators of labour market structure (e.g. the high share of self-
employment in total employment and the high ratio of female to male unemploy-
ment rates) have since the late 1970s moved towards an OECD average pattern
somewhat faster than in Greece, Italy or Spain.
In the 1990s, Ireland has enjoyed prolonged and rapid economic growth
which has already brought GDP per capita to the United Kingdom’s level. This
growth was probably helped inter alia by the exceptional size, as compared with
its EU neighbours, of the much better-educated youth cohorts now entering the
labour force. In Portugal, a first period of rapid growth after accession to the EU in
1985 was followed by sharp recession in the early 1990s, but growth picked up
again after 1994. Greece’s convergence towards average EU living standards has
been slower. Labour policy reforms perceived as threatening salaried workers
have been largely avoided or have encountered strong opposition, and the share
of self-employment in total employment has remained exceptionally high at still
close to 50 per cent.
B. NATIONAL BACKGROUNDS
To help in understanding the detailed operations and the scope for strategic
reform of the Public Employment Service (PES), this section gives an overview of
some relevant labour market and policy background and its history. For each
country, separate subsections are devoted to geography, demography and eco-
10 nomic development; labour force and employment; political system and govern-