How is that employment has grown as much as economic activity continues at a slow pace? This is the question that many economists have placed in relation to recovery recorded during this year and to which the Bank of Portugal has now decided to respond.
In the Winter Economic Bulletin published on Wednesday, the organization led by Carlos Costa concludes that the dynamism of the labor market in 2014 is being strongly influenced by the work placements and changes in the methodology used by the National Statistics Institute (INE) in Survey. And comes to their own numbers: employment for others will have grown 6% estimated by INE, but only 2.5% in the third quarter of the year, pending on which this value 0.9 points are due to professional internships funded by the state.
The analysis, published together with forecasts for the evolution of the economy Portuguese between 2014 and 2016, the BoP concludes that private employment for hire or reward presents a recovery since the third quarter of 2013, “but more moderate than that suggested by the Labour Force Survey” and that a third of this evolution is explained by the effects of active labor market policies, including internships funded by the Employment and Vocational Training Institute (IEFP).
This is the answer found by bop to the concerns raised by the international institutions, to analyze the evolution of the economy in the months after release of the troika of Portugal, recognized that developments in the labor market was overcome what would be expected in view of the performance of the economy.
In an attempt to qualify the recent evolution of employment, the BDP technical resorted to various statistics, using the records of the Ministry of Employment, the Directorate-General for Administration and Public Employment ( DGAEP), the IEFP and the INE. The use of this battery of indicators, explains the institution, it is “urgent” due to the uncertainty of the INE data, since the third quarter of 2013, is updating the sampling frame used for the Labour Force Survey with data Census 2011.
The data of the Ministry, in conjunction with the DGAEP, the IEFP and the NSA to conclude that, in the third quarter 2014, the number of workers for others in the private sector is grow 2.5% year on year, after growing 1.6% in the first half of 2014, more developments coincide with the evolution of the economy, which grew 1.1% in the third quarter year on year. INE data pointed to an increase of work for well over another account:. 6% compared to 2013 and 2.3% compared to the previous quarter
In addition to methodological issues, alerts the BoP the development of employment is also the result of a more intensive use of active employment policies since the end of last year. Only stages have represented one third of the growth of 2.5%.
Citing IEFP data, the central bank concludes that the number of people covered by professional internships “presents a growing trend, with a particular focus on from the last quarter of 2013. “
” It is estimated that the significant increase in apprenticeships in the last year have contributed to the annual growth of private employment for others by about 0.9 percentage points in the third quarter of the year “and 0.8 percentage points in the first half of the year, it refers to the document.
The big question is whether these effects of active policies on employment, talking BoP will be lasting or only temporary. In other words, you have to wait a while longer to see if young people did internships subsidized by the IEFP are then in companies. On the other hand, it is difficult to know if they did stage would have entered the labor market if they had not resorted to this mechanism and companies would have hired these workers if public incentives did not exist.
Recently, the European Commission also warned of the effects of active labor market policies in the evolution of the labor market, raising questions whether employment growth registered in Portugal is sustainable. The International Monetary Fund (IMF), the doubts were deeper. In an interview with Business Journal , Up Lall, head of mission to Portugal, recognized that “no one noticed how unemployment is falling.”
The BOP also concludes the self-employment has been falling, as well as employment in public administrations. With Sergio Anibal and Peter Chrysostom
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