BUILDING A COMPOSITE LABOR PRECARIOUSNESS INDEX

Abstract

The authors propose a composite index of labor precariousness for 15 European countries from 1995 to 2019, understanding labor precarity as an extensive phenomenon encompassing various forms of precarious employment -unwanted or unchosen- and unemployed workers. Following the rigorous methodology recommended by OECD and UNECE, the authors construct a Composite Labor Precariousness Index (CLPI). This index, developed with meticulous attention to detail, enables the quantitative measurement of the phenomenon using factor analysis techniques. This research provides evidence that precarity has been an increasing function of time in European countries since 1995. Although results showed a cyclical influence during expansionary phases that tends to stabilize the index, there is no indication of a decrease in the prevalence of precarious forms of employment in labor markets over time. Moreover, two statistically different models allow for the identification of clustering of precarity, highlighting Southern European countries (Greece, Italy, Spain, and Portugal) as experiencing more intense and abrupt growth in precariousness from a dynamic point of view. While it is true that precarious employment is often rooted in deteriorating working conditions due to economic, technological, and globalization changes, we argue for transcending the conventional assumption that precarious work is limited to paid work within a non-standard employment relationship. We emphasize that involuntarily unemployed individuals should also be included under the umbrella of precarity. In other words, confining the scope of the investigation to employed individuals disguises the heterogeneous nature of employment instability The main contribution of our work is the development of a multidimensional (reflecting the heterogeneous nature of precarious employment) and inclusive (encompassing unemployed individuals) indicator. This indicator enables regional, national, and international comparability and an analysis of its evolution over time. We aim to create and enrich the debate and terminologies on labor precariousness and inform policymakers and social partners. This will aid in adopting effective public policies and other measures tailored to address precarious employment based on the specific situations in individual countries. While most academic and public studies continue to apply unidimensional definitions or operationalizations focused solely on precarious working conditions, this study introduces a novel multidimensional approach. This fresh perspective in the field offers a broader understanding of precariousness as a structural characteristic of contemporary postindustrial societies, extending beyond traditional labor relationships.