reflections of informality and causalisation from eastern europe piotr lewandowski cape town,...
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Re fl e c t i o n s o f i n f o r m a l i t y a n d c a u s a l i s a t i o n f r o m E a s t e r n E u ro p e
P i o t r L e w a n d o w s k i
C a p e To w n , N o v e m b e r 2 6 - 2 7 , 2 0 1 5
In the communist era employment was „obligatory”
Employment in Poland (thousands)19
8119
8319
8519
8719
8919
9119
9319
9519
9719
9920
0120
0320
0520
0720
0920
1120
13
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000Other services
Transportation, storage and communication
Commerce, accommodation and food activities
Construction
Energy, gas and water supply
Manufacturing
Mining
Agriculture
Informal work in Europe – regional patterns
Source: Hazans (2011) - European Social Survey
Share of „extended labour force” employed informally (2008-2009)
Which workers are more likely to be informal in CEE
• Males
• Younger
• Single
• Lower education
• Construction, trade and related services (unskilled), agriculture and fishery (skilled)
• EU member states – rather natives, high incidence among ethnic minorities;
• Russia – rather immigrants (from Caucasus, Central Asia, other CIS countries)
Russia: segmentation but also selection (risk attitudes, wage gaps)
-.4
-.2
0.2
.4
0 20 40 60 80 100quantiles
Informal employees
5Source: Lehmann & Zaiceva (2013)
Hourly wage gap in Russia: Informal employees.Coefficients from quantile regressions. Pooled sample, 2004-2011
Some noncontributing workers have contracts
Source: Koettl, Packard, Montenegro (2012)
Social insurance critierion for dependent employment
Informality vs. non-standard employment
• 10% of workers in CEE receive envelope payments, mostly involuntarily in firms not declaring all transactions (Leibfritz 2011)
• Non-standard contracts and temporary agency work combined with regular employment
• Terminating temporary contracts – very heterogenous laws (not covered by OECD EPL)
• Poor enforcement of laws to prevent abuse of non-standard contracts
Rising but diversified role of temporary employment
Temporary contracts among new hires, 2006-07 vs. 2011-12
0 10 20 30 40 50 60 70 80 90 0
10
20
30
40
50
60
70
80
90
2006-07
2011-12
Source: OECD (2014)
Many „temporary” workers remain in temporary jobs
ES
TGBR SV
KLU
XCZE NOR
BEL
HUNAU
T IRL
GRC ISL ITA FRA
FIN SWE
SVN
NLD PRT
ESP
POL
0
5
10
15
20
25
30
0
5
10
15
20
25
30
Workers moving to regular employment within 3 years
Workers trapped in temporary employment for 3+ years
Total share of temporary employment
%
%
Job quality penalty in non-standard employment
Agnieszka Piasna © etui (2015)
Regression results, estimates for non-standard contract (reference: permanent contract), nested models. All p-values < 0.001N = 35,372Data: EWCS 2010, EU27.
• Strong compositional effects - concentration of ‘bad jobs’ in certain segments of the labour force (vulnerable workers) and labour market (sectors and occupations)
Main effect
countries
gender, education, age
occupation, sector
weekly working hours
With
con
trol
s
-400 -300 -200 -100 0
Income
-3 -2 -1 0
Intrinsic job quality
-3 -2 -1 0
Working time quality
Civil law contracts in Central Eastern Europe
• Useful in the communist era
• Abolished in Romania in 2003
• Reformed in Slovakia in 2013 – full coverage with ss contributions
• Increasingly important in Poland:
• Contracts of mandate
• Contracts to perform a specific task
Civil law contracts in Poland – interactions of regulations
• Higher net wages• Lower total labour costs
Lower social security contributions
Minimum wage is not binding
Easier to terminate than regular contracts
Segmentation within segmentation in Poland
million
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
12.0
12.5
13.0
13.5
14.0
14.5
15.0
15.5
16.0
16.5
1.5
1.9
2.3
2.7
3.0
3.3 3.3 3.2 3.2 3.2 3.2 3.2
0.9 0.9 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.1 1.1
0.6 0.6 0.7 0.7 0.8 0.7 0.8 0.70.8
0.9 0.9 1.0
Total employment- right axis
Temporary workers - left axis
Self-employment outside agriculture- left axis
Workers only on civil law contracts - left axis
Novel policy ideas – single contract
References
• Arak P., Lewandowski P., Żakowiecki P., 2014, Dual labour market in Poland – proposals for overcoming the deadlock, IBS Policy Paper 01/2014
• Hazans M., 2011, Informal Workers Across Europe: Evidence from 30 Countries, IZA DP 5871
• Lehmann H., Zaiceva A., 2013, Informal Employment in Russia: Incidence, Determinants, Segmentation, Working Paper DSE 903
• Leibfritz W., 2011., Undeclared Economic Activity in Central and Eastern Europe: How Taxes Contribute and How Countries Respond to the Problem, Policy Research Working Paper 5923, World Bank
• OECD, 2014, OECD Employment Outlook 2014, Paris
• Packard T., Koettl T., Montenegro C., 2012, In From the Shadow: Integrating Europe’s Informal Labor. Washington DC: World Bank
• Piasna A., 2015, Nonstandard work arrangements, employment regulation and inequalities, ETUI