International

Labour market information in times of crisis

What are the additional challenges to be met by labour market information (LMI) in times of a global crisis, and how can these be addressed? This topic was addressed by a group of European and non-European experts at the 15th Annual Conference of the European Network on Regional Labour Markets – ENRLMM, promoted in collaboration with the IWAK Institute of W. Goethe University in Frankfurt and the Eurispes Institute, held on 17-18 September 2020. The debate took place on the basis of reports presented by: Claudia Plaimaier (3s – Austria), Michel van Smoorenburg (UWV – Netherlands), Andrew Dean (University of Exeter, UK), Ummuhan Bardak (ETF – European Training Foundation).

Our discussion focused on five core questions which were also queried by short polls conducted during the session:

  • Did the need for LMI change since COVID-19?
  • Do observatories now provide more current information?
  • If not, what were the main obstacles for producing current LMI during the COVID crisis?
  • Which lessons did we learn?
  • Are we already in a position to give recommendations based on identified good practice examples, or is more work needed?

Needs and expectations of users

Working group participants expressed the view that user groups of LMI are more or less the same as before the crisis, nevertheless their needs and expectations changed:

  • During the crisis there was a higher need for more recent information: Monthly updates on e.g. unemployment figures are seen as unsatisfactory; daily updates, however, are not reliable enough. Thus e.g. UWV, the Dutch Public Employment Service, opted for offering weekly averaged data on unemployment benefits and online vacancies.
  • Traditional labour market indicators became deceptive: Existing data give confusing signals and are no reliable basis for policy decisions anymore. E.g. current unemployment figures draw a more favourable picture of the current situation than justified in the light of wide-spread government funding for short-time working arrangements, which prevented – at least for some time – mass redundancies. The same applies to statistics on insolvencies which are kept down by the state subsidies and tax deferrals introduced in several member states to combat the crisis.
  • There is a need for new types of data and labour market indicators: yet to date no magic bullet has been discovered which can solve all our data problems. E.g. some countries like the UK or Germany used ‘hours worked’ as proxy for labour market demand. The Dutch PES e.g. published an impact analysis per industry and region.
  • Trust in the reliability of forecasting was declining during the early stages of the pandemic: the situation was too volatile to allow for a longer-term estimation of labour market developments. Thus some observatories suspended forecasting for the time being (e.g. UWV), or at least make it very clear that forecasts currently must be treated with a lot of caution (cf. the Austrian PES‘ disclaimer warning users accessing its Skills Barometer[1]).

Obstacles for LMI in times of a global crisis

As main obstacles for adequate LMI panellists identified the following challenges:

  • Methodological problems: e.g. readily available big data (like scraped online vacancies) only allows for reliable insights if handled with care; but the necessary data cleansing or weighting to increase accuracy and reduce selection bias takes its time, thus blemishing the data source’s “real-time” character.
  • Availability of reliable, up-to-date data
  • Availability of resources (financial as well as personnel) for e.g. conducting surveys, for developing new indicators, or new information sites; for some countries, e.g. the UK, a lack of regional/local capacity was reported.
  • Organisational integration of LMI experts: observatories heavily relying on subcontracting their research (as e.g. PES Austria) are slower in reacting to a crisis than ones having in-house expertise (as e.g. the PES Netherlands).

Lessons learnt during the crisis

Existing LMI was seen as being insufficient in many countries; especially the frequency of updates, the integration of up-to-date information, and the possibility to disaggregate information to the regional / local level leaves much to be desired in the view of discussants. 

Sharing and analysing experiences on how observatories addressed the particular challenges presented by the crisis allowed for a preliminary identification of good practice:

  • Timeliness of information provision outranks accuracy/reliability: during a global crisis the public’s desperate need for up-to-date information to a certain extent justifies a more relaxed application of scientific standards, given that this is made transparent and speeds up the provision of LMI. The Dutch PES, for example, decided at the onset of the crisis to rather publish (averaged) weekly online vacancy data than let the public wait for weighted/upscaled quarterly data.
  • Re-assess priorities: in order to clear capacities for dealing with the crisis the Dutch PES, for example, decided to put some regular LMI-products on hold and suspend forecasting.
  • The provision of LMI could be made more resilient, if local / regional capacities are enhanced, research instruments expanded (additional data sources, new LMI indicators), and new partnerships built.

[1] See: http://bis.ams.or.at/qualibarometer/ (last accessed 06/10/2020)

 

*Rete Europea sui Mercati del Lavoro Regionali – ENRLMM

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