Statistician sees surge in short-term employment as a statistical illusion

print this

By Heikki Hellman
     
      Employment news in recent years has been dominated by a consensus of a sharp increase in fixed-term employment in Finland since the recession of the 1990s, at the expense of permanent jobs. However, Roope Uusitalo, head of research at the Government Institute for Economic Research (VATT) sees this as a statistical illusion.
      Labour studies conducted by Statistics Finland have created the impression that while about ten per cent of people with jobs were on short-term contracts in the 1980s, the use of short-term contracts sharply increased in the recovery that followed, and that in the present decade, short-term employment would account for 16-17 per cent of jobs.
      Some have blamed the reluctance of companies to commit to their employees in the long term, while others point out that most short-term work takes place at state and municipal workplaces.
     
Uusitalo says that the two sets of figures cannot be directly compared, because the methods of keeping the statistics have changed.
      According to Uusitalo's revised calculations, short-term employment has accounted for 14-15 per cent of jobs since the 1980s. Only in the late 1990s did the proportion increase somewhat.
      "Statistically, the duration of employment has, in fact, grown", Uusitalo says.
     
He adds that he came upon these ideas that challenge the conventional wisdom on last summer, as he was working as a researcher at the Labour Institute of Economic Research. He was launching a project to assess how the duration of jobs and working careers had changed since the 1970s. He wondered if there really was such a thing as lifetime employment any more.
      Uusitalo went through information in the registries of the Finnish Centre for Pensions, which go back to 1962. By way of comparison, he examined labour studies by Statistics Finland, which have been conducted regularly since 1982.
      In the labour studies, respondents were asked if they were currently in long-term or short-term employment, or possibly in a part-time job.
      The labour studies of Statistics Finland have created the impression that the recession had led to a sudden surge in short-term employment by the late 1990s.
     
Uusitalo discovered that from 1997 onwards, the figures had been taken on a monthly basis, and not just once a year - usually in the autumn, as had been the case before.
      Fresh studies indicate that the percentage of short-term workers in the labour force is up to seven points higher in the summer than in the autumn. Those with summer jobs radically changed the reality indicated by the figures.
      For the old and the new figures to be comparable, Uusitalo concluded that the focus should be on the autumn numbers. At the same time he came up with another way to ease the comparison.
      Until 1997 those who were unable to say if their jobs were fixed-term or long-term had been classified as long-term employed. From 1997 the "don't knows" were classified as fixed term workers. Accordingly he revised the pre-recession figures according to the new methods.
      Based on the new methods, Uusitalo calculates that already before the recession, 14-15 per cent of those with jobs were on fixed-term contracts - about the same as has been the case in this decade. He concludes that Finland has not "turned into a society of short-term employment" in the 1990s - it had been that way before.
      In fact, he says that statistically, the duration of employment has increased in Finland. He has a natural reason for this: the Finnish population is getting older, and the older people get, the longer a work history they tend to have.
     
Critics say that Uusitalo is oversimplifying the issue.
      "Part-time jobs and the increase in the use of temp agencies should also be taken into account when talking about short-term employment", says Merja Kauhanen coordinator of research at the Labour Institute of Economic Research.
      A report by the Ministry of Labour shows that the number of employees working through temp agencies has nearly tripled in the past three years. Nearly 300,000 Finns have part-time jobs - almost 50 per cent more than in the early 1990s.
      "The increase in the use of temp work means that the labour market has become more uncertain from the employee's point of view", Kauhanen says.
      She also criticises Uusitalo's decision to classify those who answered "I don't know" as fixed-term employees.
     
In the labour studies of this decade, the proportion of those who were unsure about the nature of their employment was minimal, but in the studies of 1980 there were tens of thousands of them.
      "Statistical officials must have had a good reason to leave them out of the group of fixed term workers", Kauhanen says.
      She also rejects the notion that Finland would be turning into a society of long-term employment. Of the EU countries, only Spain, Poland, Portugal, and Slovenia have more fixed-term jobs.
      In two cases out of three, the reason for taking a fixed term job in Finland is that permanent employment is not on offer." Therefore, short-term employment in Finland is usually not a personal choice.
     
Also criticising Uusitalo's figures are researcher Raija Julkunen of the University of Jyväskylä and television producer and author Osku Pajamäki, who have been outspoken in the debate on short-term work. Both note that even if the amount of fixed-term employment may not have increased, fixed-term jobs target different people than before.
      "Whereas unskilled labourers and log floaters used to be seasonal workers, now it is mostly young academic women who work at most short-term jobs."
      Short-term employment among women might be increased by long family leaves and the substitutes who fill in for those taking them. "But I believe that women pay other prices for maternity", Julkunen said.
      "The core question is who are most affected by fixed-term employment", notes Pajamäki, who examined the age structure in the labour market in his 2006 book Ahne sukupolvi ("The Greedy Generation").
      Both Julkunen and Pajamäki notes that employment in general has become more uncertain than before.
      "Fixed-term employment no longer appears to be an interim stage before moving on to long-term work. It has become a permanent state", Pajamäki says.
     
Uusitalo does not dispute the views of his critics, but he does say that they are talking about slightly different things.
      "My results do not remove the problem of fixed-term employment."
      He also agrees that by European standards, an unusually large amount of fixed-term work is done in Finland. The annual average is currently 16.4 per cent of all jobs, whereas the average in the European Union is 14.4 per cent.
      One factor increasing the prevalence of fixed-term jobs is the surge in university students. Their number has doubled in the past two decades.
     
Helsingin Sanomat / First published in print 9.3.2008


Previously in HS International Edition:
  Fixed-term jobs often used illegally in industry (24.2.2003)
  Number of part-time and fixed-term workers growing (20.11.2002)
  TEHY wants to eliminate illegal fixed-term jobs (15.5.2007)

HEIKKI HELLMAN / Helsingin Sanomat
heikki.hellman@hs.fi