Labour Market Information – why, what and who: European

perspectivesDr. Heikki Räisänen, Adjunct Professor, Research Director, Ministry of

Economic Affairs and Employment of Finland

Presentation at WAPES expert meeting 19.-21.9.2017, Nairobi, Kenya

Outline of the presentation

• Why What Who

• From data collection to analysis and policy applications

• Examples of applications based on LMI systems

– LMI used in policy applications

– LMI used in monitoring

– LMI used in analysis work

– Basic requirements on LMI for successful policy-making

Why is Labour Market Information (LMI) vital?

• In a very small community everybody knows each other, people´s workand skills are well known as well as all job opportunities

• However, nowadays most people live in cities and towns, where it is impossible to know people and job opportunities even in one´s ownoccupation

• -> LMI is necessary for employers and job-seekers to get into contact with each other

• -> some kind of LMI is usually a necessary precondition for job contract• ->LMI improves the transparency, matching and efficient functioning of

the labour market• -> further, more efficient functioning of the Labour Market is an

important factor of economic growth

• In modern economies , the mobility of capital and labour force take place– Investors monitor the availability of skilled workforce as one important

precondition for the investment decision– Especially skilled and educated people may move after jobs between regions

and countries

What are the main types of LMI? TypicalPES case

Where does the PES LMI come from?

– Basically, from job-seekers and employers

– A customer-service information system collects:

• Background information on the job-seekers (e.g. age, education, work experience, place of residence)

• information on various transactions (unemploymentspells, PES services used)

– A vacancy register collects information on notifiedvacancies and their filling process

– Customer-service information is collected into statistical system on monthly basis and published

Web based vacancy bank: vital LMI

• Information on open vacancies notified at the Public Employment Service• Voluntary for employers to use PES services• Broad use of vacancy information by job-seekers, unemployed, employed

and those outside the labour market• A national vacancy bank improves the functioning of the labour market:

people get information on job opportunities at all regions and employerscan get applicants outside the job location

• PES covers a large number of job-seekers and vacancies• A variety of search options (e.g. occupation, region, type of job etc.) • Regularly recruiting employers can notify, fill or cancel vacancies via web

service using their own access codes• In the last few years, more artificial intelligence and machine learning is

applied in the matching process• In many European countries the direction is more towards intelligent

systems where a job-seeker gets suggestions for suitable jobs and lessdirect matching by the PES officials

National statisticaloffice

– Overall survey-based informationon the labour market: employment, unemployment and those outside the LM

The Public EmploymentService

– Register-based information on the job-seekers (unemployed job-seekers and other job-seekers) and vacancies

– Information on the Active Labour Market Policy measures, liketraining , employment subsidies, job-search help, measures to help special target groups

– In addition, if the unemploymentbenefit system is run by separateorganisation, it providesinformation on benefits

Who should (and could) provide LMI?

• Survey• Economical to gather (e.g. phone

inteviews & web-basedinformation gathering)

• Gives good overall picture of the labour market

• Does not give enoughinformation on small groups(large confidence intervals)

• Depending on sample size, e.g.monthly figures includerandom variation

• International comparisons usuallypossible

• Register• Is usually based on PES customer-

register. Intended for providingemployment services, not primarilyfor statistical purposes

• Register-based information coverseverything that is within the register. Covers usually job-seekers, vacanciesand employment services

• Gives reliable picture of even verysmall groups

• Is usually very sensitive to changes in the economy and the labour market

• International comparisons often notpossible, as based on national legislation ja other regulation

Differences between survey and register-based information

• Open data

• Gather open data for monitoring, evaluationand policy-makingpurposes

• Open data means new innovations, e.g. open vacancy data could leadto matchinginnovations

• In Europe, the PES is developing moretowards an enablerwith other actors

• Cooperation in use of data

• Researchers should have accessto the administrative data

• The job-seekers and serviceproviders may give and updatetheir own information in the database

• If you use and apply the data with the research and business community, everyone benefitsfrom the outcome

Open data – cooperation in use

• Basic idea of LAFOS– 33 service centers for long-term

unemployed job-seekers whohave multiple problems and need comprehensive service

– Joint organisation of the localmunicipality, the PES and the National Social Insurance Institution

– Works as a one-stop-shop– A network, not an organisation– A multiprofessional team

provides in-dept services for people with health problems, need for rehabilitative services, debt problems and long unemployment periods

• Use of LMI in LAFOS– There is good LMI on the job-seekers

based mainly on PES job-seekingregister, the municipality´s healthservices and social benefits and SII registers

– Various services are available for the customer and the LAFOS officialshave much information on the person to help the selection of suitable services

– Each organisation brings itsexpertise and information systems to LAFOS

– Besides organisation–spesificinformation systems, there is alsoLAFOS information system for managing the customer process

Labour Force Service Center LAFOS in Finland

Open youth service OHJAAMO in Finland

• Open service for young people under 30 years of age

• About 40 one-stop-shops all over Finland provide help for employment, education and everyday issues

• Information and guidance is the main working method– E.g.information on educational possibilities and open jobs

or practical training, information on housing issues etc.

• Also web-based guidance is available

• Based on cooperation between ministries on national level and between different service providers on locallevel

Example of LMI in monitoring use: stock-flow figure of youth

unemployment

Example of LMI in analysis: distributionof unemployment duration

Example of LMI in analysis: distribution of vacancy duration

Same LMI can serve multiple goals

• A proper statistical LMI system

– is a basis for providing information and publicemployment services for job-seekers and employers

– provides statistical information which should bepublished regularly

– gives several options to develop graphs and othervisual monitoring information which is easy to learn

– serves as data for analysis purposes (e.g. evaluation)

– all of these serve as basis for policy-making

Basic requirements on LMI for successful policy-making

• Regular LMI (you can observe the changes)

• Reliable system (the data is not manipulated in any way)

• Public and open information (people and companies know what is happening in the labour market)

• Needs skills and resources to help policy-makersin statistical monitoring, interpreting the developments and working out research evidence

Thank you for yourattention !