Conference Agenda

During the 1990s, labor market experts considered the United States a model of job creation, a liberal market economy with low unemployment. During the Great Recession and the COVID pandemic, however, US unemployment peaked at higher levels than most European countries, and labor-force participation has slumped to below-OECD-average levels. Meanwhile, other countries, like Germany, have avoided mass unemployment and seen labor force participation increase.

Given the lack of strong institutions in the US that could “decommodify” the labor power, this may seem puzzling. Incentives to work are indeed strong, since cash benefit levels are low, public benefits cover relatively small shares of the jobless population, and health insurance is normally employer-provided. But it is less puzzling if we keep in mind that the active labor market schemes that could “recommodify” labor power are relatively under-resourced, and that the criminal justice system creates severe barriers to employment for millions of workers, barriers that intersect with race.

This paper examines the regulation of labor market transitions through the eyes of American and German workers who experienced a spell of joblessness during the pandemic. 80 diverse US participants were interviewed up to three times between autumn 2020 and spring 2023, asked about experiences with job loss, job search, employment, accessing government support, and mutual aid during the pandemic. 50 participants in Germany were interviewed once in fall 2021 or spring 2022 about the same issues. Interview transcripts were coded in MaxQDA to identify transitions between employment, unemployment, and “not in labor force”, and develop a categorization. The project seeks to import ideas from European sociological debates into the US discussion of unemployment, which has long been dominated by economists.

A central argument of this paper is that cash assistance is important in enabling unemployed workers to stay in the labor force, perhaps even more so than active labor market schemes. Not only does it help workers survive at a time when they are most vulnerable – during spells of unemployment – it can also make it possible to survive with very low earnings from precarious jobs or self-employment. Contrary to much of the literature on labor market dualization, this paper argues that the German Hartz IV system is far better-calibrated to support workers on the edge of the labor market than its American counterparts. Along with this support, however, comes discipline that makes it difficult for workers to escape poverty.

With the transformation to a green economy and Industry 4.0, many employees will have to change jobs. In the primary segment of the dual German employment model with strong co-determination by works councils, internal change dominates. In the secondary segment without collective bargaining agreements and strong works councils, external change dominates often associated with high income losses and insufficient investment in training. The employees are dependent on the support of public labour market labour market policy, which, since the Hartz laws, has focused on rapid placement ("work first").

Since 2007 there has been an increasing shortage of skilled workers in Germany and, under pressure from the trade unions, there has been a renewed change of policy in labour market policy towards "train first", which will be supplemented in 2023 by further reforms that have already been decided. One can almost speak of a reversal of the Hartz laws in this policy area. Added to this the new government raised the age limit for the means-tested grants and loans for continuing education from the current 30 years to 45 years. These grants and loans can be used to finance school-leaving qualifications, vocational training, master craftsman and technician courses as well as higher education studies.

In this paper, firstly, the risks of involuntary external mobility in the German dual labour market will be demonstrated by analysing wage data. Secondly, a successful internal transformation with strong co-determination is described using a case study from the automotive industry. Thirdly, the gradual establishment of new institutions of an inclusive system of CET is described and its effects on CET participation is analysed. Fourthly, it is shown that it has not yet been possible to stop the decline in collective bargaining coverage. The risks of high wage losses in the event of an involuntary change of company are the Achilles' heel on the path to a just transition. The coalition government has agreed on the introduction of a prevailing wage law for public contracts of the federal government. Also the implementation of the European Minimum Directive offers opportunities here. According to this directive, all countries with less than 80 per cent collective bargaining coverage must carry out consultations to increase collective bargaining coverage.

The Scandinavian countries and Austria were models for the development of an inclusive system of continuing education in Germany. Conversely, other countries can now learn from the German reforms in the transformation process.

Policy debates are placing renewed emphasis on upskilling and reskilling policies as means to improving decent work in an era of rapid transformative phenomena. This is based on the understanding that skills development increases workers’ capability to adapt to changes in the world of work, facilitating workers’ transitions to quality employment, in contexts where these are jeopardized by crises and transformations.

While some knowledge exists regarding the effectiveness of traditional learning policies (e.g., formal TVET), research is scant with regards to less standardized work-based learning measures (Eichhorst et al. 2015). Likewise, the literature is even thinner regarding the effects on work quality and wellbeing, particularly for minority and vulnerable groups (Eichhorst et al. 2012; Hofmann et al. 2022). Filling this gap in research is, however, key to support people who are at a disadvantaged position in the labour market.

This paper helps fill this gap in research by evaluating the Work Based Learning (WBL) initiative, implemented by the ILO Office for Turkey to promote the participation of Syrian refugees and Turkish citizens in the formal labour market. The programme focuses on increasing formal employment of disadvantaged groups, through support to vocational and professional skills development and an employment subsidy for participating firms. We thus study the WBL’s employment and decent work outcomes, as well as the skills gains of participants.

To disentangle the intervention’s causal effects on participants’ outcomes, we employ a regression discontinuity design (RDD), exploiting the fact that individuals are only eligible to participate when they have been without a formal job for at least six months. This allows us to compare similar treatment and control groups. We draw data on all individuals’ (whether they are selected or not) pre-participation situations at the time of registration. Then, we follow selected individuals and a sample of non-selected ones to gather information at the time when individuals join the programme, as well as 7 and 13 months after, to measure post-participation medium-term effects.

Ultimately, we assess the success of the WBL programme in placing people in non-subsidized formal jobs and the sustainability of these jobs. As the impact evaluation is ongoing, the presentation will focus on the mid-evaluation results based on the first two rounds of data collection. Discussing the programme’s implementation, the empirical strategy, and the preliminary data analysis will be key to test and improve the credibility of the approach and ensure the accuracy of policy recommendations.