#inequalities

By Janine Leschke and Sonja Bekker

◦ 4 min read ◦

The employment and social impacts of the Covid-19 pandemic have been larger on some groups of workers than others. In particular, low-wage workers and workers in forms of employment that differ from full-time wage and salary work with a permanent contract seem to have been especially exposed to job and income losses (see ILO-OECD Covid-19 report). The concept of fragmented labour markets, which we propose here, highlights the large and growing diversity in employment relationships. It demonstrates the relevance of relating the impact of the crisis on jobs, income and social security to the degree of ‘resilience’ workers had prior to the crisis in terms of job stability and decent earnings. It is therefore very suitable for detecting vulnerabilities that have been built into labour markets over the past decades.

Rise of diverse types of non-standard employment relationships

The concept of fragmented labour markets focuses on the group of workers commonly termed ‘outsiders’ or the population in non-standard (also termed atypical) employment. It goes beyond traditional views on segmented, dual or primary versus secondary labour markets, which divide employment into ‘good’ and ‘bad’ jobs. There are a number of arguments as to why the use of binary divisions with regard to labour market status or outcomes are obsolete, such as the substantial variety within both the groups of standard and non-standard jobs.

Over the past decades, a further fragmentation of employment status has occurred. Some speak of an ‘explosion’ of diverse types of non-standard employment relationships, making these types of jobs an often occurring or even ‘normal’ phenomenon at least for some labour market groups, such as women. Consequently, within the group of ‘outsiders’, an ever greater variety of forms of employment is materialising, making the groups themselves far from homogeneous.

Call for a new approach

The inadequate binary division of the labour market into groups of ‘insiders’ and ‘outsiders’ has spurred a call for a new multidimensional approach to understanding inequalities in work and employment. These suggestions go beyond merely defining non-standard work as all forms of work that deviate from the standard employment relationship.

Based on the trends and observations highlighted above, we develop the concept of fragmented labour markets as a way to both define and explore the most vulnerable types of non-standard employment. We build on the work of authors who point at key elements of such a definition, including the different labour market groups that have different sets of rights and labour conditions, and refer to different employment statuses such as part-time work, fixed-term contracts, temporary agency work, self-employment, marginal employment, platform work and other ‘non-standard’ forms of employment.

Additionally, we look at the earnings that workers (can) generate with their jobs, and whether they combine several employment statuses (e.g. being part-time as well as fixed-term employed). Moreover, we zoom in on certain occupational groups. The latter focus is relevant in order to prevent certain vulnerable groups remaining ‘hidden’ in overall labour market averages (see, e.g., the example of the occupational groups of cleaners below).

Therefore, we define fragmented labour markets as:

Labour markets characterised by an accumulation of insecurities. Fragmentation is evident where workers combine non-standard employment with low wages or where they combine several forms of non-standard employment − situations that are dominant in particular occupational groups.

We argue that using the concept of labour market fragmentation may render visible which labour market groups are generally more insecure and vulnerable to job and/or income loss and fluctuations and would therefore need additional support particularly when crises occur.

Exploring selected occupational groups in Germany and the Netherlands

Using this concept exploratory with a focus on two affluent countries – Germany and the Netherlands – highlights vulnerability in some occupations, particularly among women, but at times also among men.

For instance, almost 70% of female personal care employees in Germany are part-time employed and 18% of those combine part-time employment with a fixed-term employment contract (see EU-LFS). In the Netherlands, 43% of women in the occupational group of cleaners and helpers & service employees are marginal employed (less than 15 working hours per week) and 27% of those combine marginal part-time employment with fixed-term employment. Both occupations, and particularly cleaning are at the same time characterised by low wages (see SES). These groups would have been ‘invisible’ if only data on the average economy had been used.

Additionally, the use of the concept of labour market fragmentation shows that in some occupations and groups, there are hardly any standard jobs left.

For instance, among women in the Dutch personal care and cleaners and helpers occupations, nearly everyone has a part time job (>90%), while in Germany the vast majority of women with a cleaning and helpers occupation has a part time job (>85%). At the same time these jobs are commonly relatively poorly paid and it is not uncommon that these part-time jobs are combined with other flexible forms of employment to make ends meet.

This not only has consequences for employment and earnings security while being in a job but also has important knock-on consequences for accessibility to and adequacy of social security, which is affected to a large degree by the level of earnings and job tenure (with the exception of social minimum benefits).

The concept of fragmentation thereby transcends labour markets and its value becomes particularly evident in times of crisis. As a result of the pandemic, low-wage workers and workers in diverse forms of non-standard employment relationships have been especially exposed to job and income losses. Moreover, in times of economic downturns, new jobs will often be more likely to be non-standard contracts than in times of economic upturns.

Both in Germany and the Netherlands, social security coverage has been problematic for some of these groups during the coronavirus crisis.

Understanding the growing flexibility in labour markets

The concept of fragmentation thus assists in achieving a more profound understanding of what growing flexibility in labour markets really entails in terms of cumulative insecurities for some labour market groups. It helps fuel discussion on making social security more inclusive for workers, regardless of their labour market position. Last but not least, with respect to occupations where up to 90% of (female) workers are in non-standard employment, often combined with other forms of non-standard employment and/or low wages, it helps raise questions as to how much labour market fragmentation affluent societies can legitimise.

About the Authors

Janine Leschke, political scientist, is prof MSO in comparative labour market analysis. Her research interests comprise issues such atypical work, job quality, labour mobility and migration, youth unemployment, as well as gender. She is currently the Danish lead partner in the Horizon 2020 project HECAT, participant in EuSocialCit and one of the editors of Journal of European Social Policy.

Sonja Bekker is an associate professor European Social Policy at both Utrecht University and Tilburg University. Her research interests include European employment policies and social policies, particularly focused on vulnerable groups such as people with flexible employment relations, youth, people experiencing in-work poverty. She is part of the Horizon 2020 WorkYP project.

Photo by Danny Sunderman on Unsplash

By Clément Brébion

◦ 3 min read ◦

Despite an unprecedented worldwide decline in mortality over the last century, a substantial income gradient in life expectancy persists within most countries. In the US for instance, the 1% richest men have a life expectancy at the age of 40 that is 15 years larger than the poorest 1% (difference of 10 years for women) and this spread is currently increasing. In France (on which this blog post is based), the income gradient is of a similar size despite a more egalitarian access to health care.

Pandemics likely amplify this spread because they reveal latent inequalities in individual health capital and because they spread differently across living environments. Our recent study reveals that the COVID-19 crisis, which epitomizes such massive mortality shock on a worldwide scale, is not an outlier in this respect.

A few definitions

We analyse the impact of COVID-19 on mortality inequalities over the whole year 2020 in France, one of the most severely hit country in the world. We use comprehensive registered data, allowing us to study the evolution of mortality as well as the income level of each municipality of metropolitan France. Given the unreliability of public data on deaths attributed to COVID, we focus on excess mortality occurring in each municipality, defined as the deviation in 2020 all-cause mortality with respect to the average of 2019 and 2018. The link between poverty and morality related to the epidemic is thus analysed by comparing excess mortality between ‘rich’ and ‘poor’ municipalities, where ‘poor’ is defined as belonging to the poorest 25% of municipalities (‘Q1’ hereafter).

Two waves that have affected more the poor municipalities

Figure 1 below shows that, as in many European countries in 2020, France has been hit by two distinct waves that peaked in April (17,000 extra-deaths) and November (15,100 deaths), respectively. Each time, a lockdown was implemented at the national level to reduce the spread of the disease (March, 17 to May, 11 & October 30 to December 15). The first lockdown was the most stringent and has seemingly worked best to reduce casualties to COVID-19.

*Figure 1: The figure represents the difference between the monthly number of deaths in 2020 and its average over 2019 and 2018 in France*

Figure 2 shows the distribution of excess mortality across municipalities according to their income. Each month, the figure shows the average number of abnormal deaths that occurred since the beginning of the year in each group of municipalities (per 10k. inhabitants). While no specific pattern can be seen over the first three months of 2020, a marked difference between the two groups of municipalities appears in April (wave 1), that further grows as the second wave takes place (October-December).

In-depth analyses tell us that excess mortality in poor municipalities was 30% larger than in non-poor municipalities in 2020 (2.6 more extra-deaths per 10k. inhabitants). Our research shows that this spread directly relates to COVID-19 and is not explained by differences in the geographical localisation, in the share of old-age inhabitants or in the life conditions under the lockdown between rich and poor municipalities.

*Figure 2: The graph plots the cumulative sum of all excess deaths per 10,000 inhabitants from January 2020 for poor and non-poor municipalities in French urban areas.*

The fact that the income gradient uncovered during the first wave is not compensated during the second wave, but rather reappears with regularity every time the epidemic returns must be emphasized. One can indeed show that the income gradient is the strongest in areas that got most affected by COVID-19 in 2020. If further epidemic waves occurred – and some signs suggest that it has already started in France as well as in several other countries – our result suggest that, once again, the poorest municipalities will suffer greater losses.

Worse housing conditions and higher exposure through employment

What are the main differences between poor and non-poor municipalities that explain the income gradient in Covid-19 mortality? Our analysis highlights the key mediating role of labour market and housing conditions, in line with the idea that local factors are important determinants of the spread of epidemics. More specifically, the larger share of essential workers and of overcrowding housing almost fully explain the income gradient in COVID-19 related mortality. Interestingly, labor-market exposure remains an important determinant of COVID-19 mortality across both waves, while the role of housing conditions decreases over time, probably because the second lockdown was less stringent.

Our work shows that the current health crisis amplifies already existing socio-economic inequalities. It also suggests that public policies aiming at limiting its effects should primarily focus on the poorest municipalities, notably by protecting workers as much as possible in the short term and by improving housing conditions in the medium term.

References

Brandily, P., Brébion, C., Briole, S., & Khoury, L. (2021). “A Poorly Understood Disease? The Impact of COVID-19 on the Income Gradient in Mortality over the Course of the Pandemic” , Working Paper, n° 2020-44, Paris School of Economics.

About the Author

Clément Brébion joined CBS in September 2020 as a postdoctoral researcher. He received his PhD in economics in November 2019 from the Paris School of Economics. His main research interests are labour economics, economics of education and industrial relations. He has a particular interest into comparative research. More recently, he started working on the EU H2020 project HECAT that aims at developing and piloting an ethical algorithm and platform for use by PES and jobseekers.