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Transitions in labour market status in the European Union

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  • Melanie Ward-Warmedinger & Corrado Macchiarelli

Abstract

This paper presents information on labour market mobility in 23 EU countries, using Eurostat’s Labour Force Survey (LFS) data over the period 1998-2008. More specifically, it discusses alternative measures of labour market churning; including the ease with which individuals can move between employment, unemployment and inactivity over time. The results suggest that the probability of remaining in the same labour market status between two consecutive periods is high for all countries. Nonetheless, transitions from unemployment and inactivity back into the labour market are relatively weak in the euro area and central eastern European EU (CEE EU) countries compared to Denmark and, particularly, Sweden. Moreover, comparisons of transition probabilities over time suggest that – until the onset of the financial crisis – the probability of remaining in unemployment over two consecutive periods decreased in Sweden, the euro area, and, to a lesser extent, Denmark, while it increased in the average CEE EU countries. At the same time, however, successful labour market entries (from outside the labour market) increased in the average CEE EU countries, Denmark and Sweden. On the basis of an index for labour markets turnover used in the paper (Shorrocks, 1987), labour markets in Spain, Luxemburg, the Netherlands, Denmark and Sweden are the most mobile on average, with these results mainly reflecting higher mobility of people below the age of 29, highly educated and female workers. We also find that mobility of all worker groups has generally increased over time in the euro area, Denmark and Sweden. Finally, we ask whether some of the observed changes in mobility can be broadly restraint to some macro explanatory factors, including part time and temporary employment, unemployment and structure indicators. The results provide a mixed picture, suggesting that the sense of mobility strongly varies across countries.

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Bibliographic Info

Paper provided by London School of Economics / European Institute in its series Europe in Question Discussion Paper Series of the London School of Economics (LEQs) with number 9.

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Date of creation: 05 Nov 2013
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Handle: RePEc:erp:leqsxx:p0069

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Web page: http://www2.lse.ac.uk/europeanInstitute

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Keywords: transition processes;

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  1. Ted Aranki & Corrado Macchiarelli, 2013. "Employment Duration and Shifts into Retirement in the EU," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 8, London School of Economics / European Institute.
  2. Burgess, Simon & Knetter, Michael & Michelacci, Claudio, 2000. "Employment and Output Adjustment in the OECD: A Disaggregate Analysis of the Role of Job Security Provisions," Economica, London School of Economics and Political Science, vol. 67(267), pages 419-35, August.
  3. Shigeru Fujita & Garey Ramey, 2009. "The Cyclicality Of Separation And Job Finding Rates," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 415-430, 05.
  4. Caliendo, Marco & Uhlendorff, Arne, 2008. "Self-Employment Dynamics, State Dependence and Cross-Mobility Patterns," IZA Discussion Papers 3900, Institute for the Study of Labor (IZA).
  5. Natan P. Epstein & Corrado Macchiarelli, 2010. "Estimating Poland's Potential Output," IMF Working Papers 10/15, International Monetary Fund.
  6. Robert Shimer, 2007. "Reassessing the Ins and Outs of Unemployment," NBER Working Papers 13421, National Bureau of Economic Research, Inc.
  7. Barbara Petrongolo & Christopher Pissarides, 2008. "The ins and outs of European unemployment," LSE Research Online Documents on Economics 3658, London School of Economics and Political Science, LSE Library.
  8. Macchiarelli, Corrado, 2013. "Similar GDP-inflation cycles. An application to CEE countries and the euro area," Research in International Business and Finance, Elsevier, vol. 27(1), pages 124-144.
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