The obvious and twisted statistics of unemployment

There are times when we make an argument by pointing out the obvious. There are two reasons why it is important that we still test the validity of these arguments. Firstly, obvious things (what we perceive as such) must be proven as obvious (true), and constantly re-evaluated. And, secondly, the devil is in the details and we must’ve been wrong about something somewhere along the way. So, we must do all these statistical and econometrical analyses to prove to you what you already knew while also showing you what you did not see.

And this is why I shortly want to reflect on one of my latest findings.

I was working on a paper about flexicurity analysis – surprise, surprise, I’ve been working on this for years. However, this time I wanted to look at it from the start-up and self-employment angle and argue that we should integrate basic business statistics in the analysis of labour market, because being self-employed or owning a business is the new form of employment.

When I was going through the data, I found these strange patterns that we, economists, like to analyse – obvious things combined with things that leave our findings in disarray.

So, I thought I’d give you a statement and my reflection – what we should remember/know about it, before we judge.

The likelihood of becoming unemployed is higher amongst people with part-time or fixed-term contracts than regular full-time workers.

Most of the time the explanation for this is lower job security than for full-time workers and therefore the need for better employment protection legislation for ‘vulnerable’ workers. However, the issue is that we don’t know whether the person has had a choice between a regular full-time contract and a part-time or a fixed-term contract, and, also, whether it’s the person’s choice to be unemployed.

I will give you an example from my own experience to illustrate my point.

I changed my full-time permanent job to a fixed-term contract on purpose, knowing that after it expires I can take a break from work, have more time to focus on my studies and in the meanwhile spend all my money on travelling. I wanted to have something like a time bomb ticking, saying – come this date – you’ll change something. I am very sorry I have messed up the statistics that I use in my own analysis, because, even though I became officially ‘unemployed’, I can’t say I have no work to do (I am PhD student!).

Because of my move, I can be counted in one of the typical risk groups as a young woman becoming unemployed after having fixed-term contract. But no-one asks about the motivation behind it all and this, I find, is a growing concern economists face at the moment – we see that changes in employment structure are happening, but do we know all the factors that determine this and the role they play in further studies? Here certain surveys can really help – we know that during the crisis more than 40% of part-time workers in Latvia would’ve preferred full time work. Before the crisis it was around 20%. But funnily enough, according to official statistics, if you count all the registered employees in Latvia part-time workers form only 10% of the total at any given year. This is completely different from the Netherlands, for example, where almost half of the employed (49% in 2012) falls under the ‘part-time’ section and everyone is happy about it. So the question is, whether we actually need to increase the employment protection legislation for these ‘vulnerable’ workers or, in fact, make this way of working more attractive?

I really hope I won’t mess up the statistics even more, because, after a year of being ‘unemployed’, a person falls under the criteria of ‘long-term unemployment’. I, personally, would like to point out the absurd – that a girl with two Master’s degrees doing her PhD can’t find (seemingly) a job for over a year… Well, the thing is that I don’t want to conventionally get a full-time job yet! I left my previous job to simply work on my PhD research. Maybe if all PhD students were classified as ’employed’ (in Latvia they are not; however, they are in Germany, Norway, Sweden, Finland, the Netherlands and so on) statistics would improve? #maybe I don’t know the full story of “employment statistics”, so any corrections in comments will be greatly appreciated!

Furthermore, when we’re looking at full-time workers as a ‘demographic group’, please don’t tell me that they all must be satisfied with and productive at their jobs, and should actually be employed in their positions. So this demographic group in our statistics looks like it consists of perfect employees, because they are employed on long-term full-time basis and never appear unemployed. Statistics are ‘nice’, but I think we keep up with the times; part-time work, fixed-term work, self-employment, new businesses are our future and it no longer fits within traditional employment statistics on the same terms. (See also Further reading below)

What if we define different states of ’employment/unemployment’ in terms of “busy/engaged” and “not busy/not engaged”? Then part of full-time workers might fall under the undesirable “not busy” section, because they might appear to be busy, when in actuality they are ‘static’ in their productivity (and, as we know, productivity in Latvia is still very low, so this has an impact on it). And what about the view that all ‘stay at home’ (and ‘unemployed’) moms should be under our wonderful “busy/engaged” section because they’re raising our next generation? It feels, that sometimes we are so obsessed with gender equality that we have forgotten to value the work of women we consider as ‘housewives’ and ‘stay at home’ moms. Instead in statistics we judge them by their educational level, number of children and other factors seemingly affecting their ‘unemployment’. In the Netherlands, for example, 75% of women are working part-time. And all those world-travellers… by statistics probably ‘at risk of poverty’, but in actuality doing the most exciting things that we can only imagine (based on their savings earned in short-term works).

Or we can call people “do-ers” and “not do-ers”, where we define everyone in terms of doing something meaningful. Although, I don’t know who could make these calls.

This reminds me about the last thing I want to mention in this weird blog post of me ranting – when I went to the unemployment agency I told them that I am doing my PhD and I have no time for and interest in full-time work, do you think they wrote it down?

I think there are missing ‘unemployed but busy/engaged’ and ‘unemployed but happy’ qualifications in labour market. :)

Further reading: My generation will never retire by Ivars Krutainis (world-wide-traveller)

And thanks to Mara for making this post readable.


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