Luxembourg: Working conditions of young entrants to the labour market

  • Observatory: EurWORK
  • Topic:
  • Job quality,
  • Published on: 19 December 2013



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Luxembourg
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In Luxembourg there is limited information about the working conditions of the young entrants on the labour market. There is an evidence that the participation of youth in temporary contracts (including specific measures targeted to youth) is high. There are in general sectoral differences between working conditions. Some active labour market policy measures facilitate the transition from school to work.

Introduction

This EWCO CAR is specifically focused on the group of “young entrants to the labour market”. This group includes all young people (between 15 and 30 years old) who have recently entered into the labour market (i.e., people with a work experience shorter than 1-2 years in the labour market), with relative independence of their age and for whom work is their main and core activity. This definition excludes young people for whom studies are their main activity but who combine their studies with some remunerated activity as part of their training programmes (e.g. apprenticeships in dual systems), as well as unemployed young people, even if they are actively looking for a job (see Background note for more detailed information on the concept of young entrants to be considered in the research).

The CAR coordinating team is conscious that such as “narrow” definition of “young entrants to the labour market” can make difficult the identification and collection of relevant information on the topic. Therefore, and in the case no national information is available using this “narrow” definition, National Correspondents can use a “proxy” definition of “young entrant to the labour market” as any young person (i.e. between 15 and 30 years old) who is in employment, irrespectively of the number of years of experience that he/she has in the labour market (again, unemployed young people are excluded from the analysis).

The questionnaire focuses on the following topics:

  • General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups (around 700 words)

  • Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country (around 600 words)

  • Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis (around 500 words)

  • Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market (around 500 words)

  • Final commentary on the main results (around 100 words)

Block 1: General description and characterisation of the main current working conditions of young entrants to the labour market in your country in comparison to other age groups

1.1 Career and employment security issues

There is limited data about the employment conditions of young entrants in Luxembourg. STATEC is suggesting (Statec 2012, Salaires, emploi et conditions de travail Premiers résultats de l’enquête sur la structure des salaires de 2010, Bulletin de STATEC, p. 14) that only 7% of the working force in the country is under 25 years, the principal explanations is that this age group continues studying. According to the Chamber of employees, young employees have some legal protections – e.g. they could be asked to work extra hours only if there are no ‘adult’ workers available, they can not work during the night, excluding some exceptions, etc.

1.2 Skills development

There are no significant differences for the young entrants compared to the rest of the labour force.

1.3 Health and well being

There are no differences for the young entrants compared to the rest of the labour force.

1.4 Reconciliation of working and non-working life

There is no specific information about the young entrants, except those legal protections, mentioned in 1.1.

Block 2: Identification and characterisation of existing differences in working conditions within the group of young entrants to the labour market in your country

2.1 Personal characteristics of young entrants

There are no differences according to the age. The only difference concerns the minimal wage for young workers. Its full rate is paid from the age of 18 years. The employees aged between 17 and 18 years receive 80% of the full rate. The employees aged between 15 and 17 years receive 75% of the full rate.

There is no data available about differences by gender.

In terms of educational levels, Luxembourg represents specific labour market. In the last decade there has been a particularly pronounced fall in youth employment despite the strength of the overall labour market. Of particular concern is the persistence of joblessness for disadvantaged younger workers, a trend that has been intensified as a result of the current crisis. According to the recent OECD report the unskilled young cannot find work easily and outcomes for this group of workers, and to some extent prime–aged males, have deteriorated. This pattern can be explained in part by labour market institutions and social transfer policies (qualified by OECD as “generous”), combined with the availability of a large pool of well–trained cross–border and migrant workers who are able to accept lower wages and often posses more appropriate skills than the resident population.

As mentioned, there are specific labour market features, related to the inflow of transborder workforce that make access to labour market for low qualified local youth more difficult.

2.2 Occupational characteristics

There is no data available on differences by economic sectors. We could just assume that part of the qualified workforce is engaged in sectors such as financial services, consulting, etc. that are large employers in Luxembourg and offer very good working conditions.

As it is already mentioned, there are differences in the access to labour market depending on occupation.

The reasons of these possible differences are the differences between sectors.

Block 3: Evolution of working conditions of young entrants to the labour market in the last five years. Effects of the economic crisis

3.1 Please provide information on the evolution of working conditions of young labour entrants in the last five years. Have working conditions of this group improved/deteriorated in comparison to the existing situation five years ago (before the economic crisis began)? What are the reasons for these changes

There is no information. Very probably there conditions are the same.

3.2 Based on possible existing prospective studies, please provide information on the expected evolution of employment levels and working conditions of young labour market entrants in your country in the near future (coming 2-3 years)

No information available.

Block 4: Initiatives taken by national governments/social partners in order to improve employment levels and working conditions of young entrants to the labour market

4.1 Identify main recent national measures/initiatives (1-2) put in place in your country by public authorities in order to improve employment opportunities and working conditions for young entrants to the labour market.

In Luxembourg there are no specific measures aimed at the improvement of the quality of jobs and working conditions for new entrants. There are some measures aiming better transition to the labour market, namely the apprenticeship schemes and the some specific measures targeting youth unemployment. Already in 2009 the Luxembourg government adopted a number of measures to mitigate the effects of the economic crisis on youth unemployment (LU1001019I). In 2006 a number of measures were developed and targeted towards less qualified jobseekers (LU0707039I). Three temporary measures were implemented in order to mitigate the effects of the economic crisis on youth employment, and these are: Adaptation of the Employment initiation contract (Contrat d’initiation à l’emploi, CIE), - a public entity is subsidised to employ a youth and to ensure work and training for him; Adaptation of the Employment support contract (Contrat d’Appui-Emploi, CAE) and Enlargement of the Employment initiation contract (Contrat d’initiation à l’emploi ‘Expérience pratique’, CIE-EP) – the youth is employed by a private employer but the state co-funds the social security contributions and its salary. These measures are aimed at young residents (less than 30 years of age), in Luxembourg, who are qualified or not, and who are leaving the education system, and candidates benefiting from these measures should register at the Employment Administration (ADEM). A special website has been created to facilitate the registrations for the CIE-EP (in this case candidates may not register to ADEM). Young people who have signed these contracts receive an allowance paid by the employer and by the Employment fund. The amounts of the allowances vary, depending on the type of contract and can be as much as 150 per cent of the minimum social wage. In the year 2010 241 people had a CAE contract and 738 a CIE (of which 101 CIE-EP).

The main incentives are the support schemes for transition (CAE, CIE, CIE-EP). There is a recent focus on evaluation of these measures. Researchers from CEPS/INSTEAD have carried out evaluations of the measures for the Ministry of Labour and Employment. However, this evaluation covered only the pre-crisis period, and suggests that for the period July 2007 to March 2008 the CIE was a very effective tool as it supported 86 per cent of the people on the programme to find a job within six months after the expiration of their contract compared to only 57 per cent not on the programme. But the evaluators have doubts about the general increase in the employability of the young if the partner company does not then hire them afterwards. The other measure, the CAE, was considered inefficient, in relation to the employability increase, according to the report of CEPS/INSTEAD. The CAE, with a shorter duration, could be very effective as 55 per cent of participants found a job afterwards, compared to 35 per cent of non-participants. Further evaluations of these measures, and the new CIE-EP, are envisaged by the national administration. These results were presented at a conference in 2012. The authors of the analysis, CEPS/INSTEAD researchers Mireille Zanardelli et Jacques Brosius have argued that there is a need to compare the success rate of the measure and the percentage of youth that will find work without this measure. According to this evaluation the CIE has 25% of success rate. As a result of this evaluation some of the measures will be readjusted.

4.2 Identify main recent initiatives (1-2) put in place in your country by social partners (either at national, sector or company level) in order to improve working conditions amongst young entrants to the labour market.

There are no specific initiatives, put in place by social partners in order to improve the working conditions amongst young entrants to the labour market. The youth sections of the OGBL trade union criticise the widespread use of temporary contracts. There have been a number of specific small-scale initiatives by the union movement to improve the situation of young people. In the years 2009 and 2010 the LCGB youth section has used its network of contacts to find summer jobs in companies for young people. The LCGB launched a public relations campaign called “A job for all” (“Un job pour tous”) in order to stress the fact that employment among young people is far from representing full employment. LCGB has also run campaigns to explain the specific measures for youth employment, not only to the young themselves but also to their members who have children in this age group.

Commentary by the NC

There is not enough information in order to describe and analyse the situation of young entrants in Luxembourg.

Vassil Kirov, IR Share

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