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Mismatch on the labor market in Brussels Metropolitan

Mismatch on the labor market in Brussels Metropolitan. Prof. Dr. J. Konings & Drs. W. Torfs University of Leuven Joep.Konings@kuleuven.be. Overview. I. Some stylized facts about the labor market in Brussels Metropolitan

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Mismatch on the labor market in Brussels Metropolitan

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  1. Mismatch on the labormarket in Brussels Metropolitan Prof. Dr. J. Konings & Drs. W. Torfs University of Leuven Joep.Konings@kuleuven.be Talent for Growth in Brussels Metropolitan - 7 November 2012

  2. Overview I. Somestylizedfactsabout the labormarket in Brussels Metropolitan II. A matchingframework to analyzelabormarketdynamics III. WhatexplainsMatching efficiency IV. Policyrecommendations Talent for Growth in Brussels Metropolitan - 7 November 2012

  3. Part I Stylizedfacts Talent for Growth in Brussels Metropolitan - 7 November 2012

  4. Brussels Metropolitanreflects the typicalcharacteristics of a MetropolitanArea (2010):- High unemployment in the centre- Low unemployent in the suburbs Talent for Growth in Brussels Metropolitan - 7 November 2012

  5. 61% of the unemployed in Brussels Metropolitan are lowlyeducated. Most of which (82%) are located in the Brussels’ capitalregion (the centre) Talent for Growth in Brussels Metropolitan - 7 November 2012

  6. Within Brussels Metropolitan the centre is attracting most commuters: 122.000 commutersfrom the periphery to the core (2010). Talent for Growth in Brussels Metropolitan - 7 November 2012

  7. Summary 1 Brussels Metropolitan is characterizedby the typicallabormarket features of otherMetropolitanarea’s: Largespatialdifferencesin terms of unemployment Largespatialdifferences in terms of skills Labormobilityflowingmainlytowards the centre Talent for Growth in Brussels Metropolitan - 7 November 2012

  8. Part II A matchingframeworkforanalyzing the labormarket Talent for Growth in Brussels Metropolitan - 7 November 2012

  9. Inflows = Outflows Steadyunemployment (U) Matching Talent for Growth in Brussels Metropolitan - 7 November 2012

  10. NegativecorrelationbetweenVacancies (V) and Unemployment (U): The Beveridge curve Talent for Growth in Brussels Metropolitan - 7 November 2012

  11. Beveridge Curve for:(i) Brussels Metropolitan (2010-2012) Talent for Growth in Brussels Metropolitan - 7 November 2012

  12. Beveridge Curve for:(ii) Brussels CapitalRegion (2004-2012) Talent for Growth in Brussels Metropolitan - 7 November 2012

  13. Beveridge Curve for: (iii) Halle-Vilvoorde (2004-2012) Talent for Growth in Brussels Metropolitan - 7 November 2012

  14. Beveridge Curve for: (iv) Brabant-Wallon (2010-2012) In 2003, 17380 unemployed Talent for Growth in Brussels Metropolitan - 7 November 2012

  15. Beveridge Curve for low skilled: (v) Brussels’ CapitalRegion (2004-2012) STRONG SHIFT! Talent for Growth in Brussels Metropolitan - 7 November 2012

  16. Beveridge Curve for low skilled: Halle-Vilvoorde (2004-2012) Halle-Vilvoorde: Low Skilled Talent for Growth in Brussels Metropolitan - 7 November 2012

  17. Summary 2 Brussels Metropolitan is characterizedbyanoutward shift of the Beveridge curve, mainlydrivenby a shift out in the Brussels’ capitalregion. Thisindicates a reduction in the matching efficiency oranincrease in structuralunemployment. The reducedmatching efficiency is mainlydrivenby a reducedmatching efficiency of the low skilled, in the centre Talent for Growth in Brussels Metropolitan - 7 November 2012

  18. Part III Whatexplains mismatch? Talent for Growth in Brussels Metropolitan - 7 November 2012

  19. Analyzing Matching EfficiencyThe role of mismatch • In general : M = E m(u,v) • M=number of newhires, u =unemployed, v = vacancies • m = the matchingfunction, whichreflects the rate at whichunemployedworkers are beingmatchedwith vacant jobs. • E = Indicator of matching efficiency , normalized at 1 initially. • Thusif E>1, thenEmincreasesfor a given u & v, so we obtainbettermatching efficiency, whileif E<1, thenEmdecreasesfor a given u & v, so we obtainworsematching efficiency. Talent for Growth in Brussels Metropolitan - 7 November 2012

  20. EvolutionMatching Efficiency in Halle-Vilvoorde and Brussels’ CapitalRegion Talent for Growth in Brussels Metropolitan - 7 November 2012

  21. Especiallyfor the low skilled, matching efficiency decreased in Brussels’ capitalregion(2004- june 2012) Talent for Growth in Brussels Metropolitan - 7 November 2012

  22. Index of Skill Mismatch withineach district in Brussels Metropolitan Brussels’ CapitalRegion Talent for Growth in Brussels Metropolitan - 7 November 2012

  23. Index of Spatial Mismatch across the threedistricts in Brussels Metropolitan Low skilled Talent for Growth in Brussels Metropolitan - 7 November 2012

  24. Number of low skilledunemployed per low skilled open vacancy in each district (June 2012) Talent for Growth in Brussels Metropolitan - 7 November 2012

  25. Summary 3 Brussels’ Metropolitan is characterizedbyhigh spatial mismatch for the low skilled. The centre, Brussels’ capitalregion, is characterizedby high skill mismatch (vacanciesfor the high skilled, butlocalunemployed have low skills). Skill mismatch has increasedwith the crisis, whichexplainslowermatching efficiency and signals persistent structuralproblems in the Brussels’ Metropolitan. Talent for Growth in Brussels Metropolitan - 7 November 2012

  26. Part IV Policyrecommendations Talent for Growth in Brussels Metropolitan - 7 November 2012

  27. IV. SomePolicyRecommendations 1. Reskilling and reschooling of the unemployed • Reschooling & reskilling is more successfulwhenit is done in close collaborationwithfirmsorwhenit is organizedby and withinfirms. • On-the-job training & internshipsshouldbeencouraged. • Long run: More investment in education, including‘secondchance’ education Talent for Growth in Brussels Metropolitan - 7 November 2012

  28. 2. Improvingmobility of low skilledunemployed • Tightermonitoring and guidance of the unemployed. • Increasingminimum distanceforaccepting a job vacancy (= part of the currentlabormarket reform) • Further intense collaboration and coordinationbetween ACTIRIS, VDAB and FOREM. • Improvinginfrastructure in public transport in Brussels’ Metropolitan. • Notethatspatial mismatch & skill mismatch is a generalBelgianproblem (recent study NBB) Talent for Growth in Brussels Metropolitan - 7 November 2012

  29. 3. Job Polarization in terms of high quality & low quality jobs is typicalforMetropolitanarea’s  Facilitatingdevelopment of low skilled service jobs, complementing high skilled, complex jobs. Talent for Growth in Brussels Metropolitan - 7 November 2012

  30. Thankyouforyourattention Talent for Growth in Brussels Metropolitan - 7 November 2012

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