Lifelong Guidance and Labour Market Intelligence, hazards

Tibor Bors BORBÉLY-PECZE, PhD.Associate Professor, Senior Policy Adviser

Hungary Antalya, 26-27 November, 2014

Navigating in uncertain times

Where is uncertainty? The individuals’ perspective

•Multiple transitions through the whole lifespan, several re-entries to the labour market•Re-location, migration •Temporary contracts •Project-based work

Where is uncertainty?Perspective of the State

•High and long-standing unemployment, youth unemployment •Global job crisis •Ageing labour force (but also too young labour force, e.g. Iran, Maghreb states), imbalanced supply side, •Weak demand side•Out and in-sourcing of work, re-industrialisation•Hard-to-calculate revenue tariff

To change a system, we need at least one stable element.

From the perspective of Lifelong Guidance…

•...it is (still) the individuals and families who make daily decisions at their own risk, and who could make corrections. –Teaching decision making skills is only part of the

answer. –Letting people know where the current vacancies

are is not enough. –Foreseeing the future is mission impossible.

Productivity of work and freedom of choices have the same root

–(a) there is work for all who are available for and seeking work;–(b) such work is as productive as possible;–(c) there is freedom of choice of employment and

the fullest possible opportunity for each worker to qualify for and to use his skills and endowments in a job for which he is well suited, irrespective of race, colour, sex, religion, political opinion, national extraction or social origin.

(ILO C122, 1964 on Employment Policy)

(Labour) market asymmetry

Definition:•A situation in which one party in a transaction has more or superior information compared to another. This often happens in transactions where the seller knows more than the buyer, although the reverse can happen as well. Potentially, this could be a harmful situation because one party can take advantage of the other party's lack of knowledge.

Results of LM asymmetry Information asymmetry can lead to two main problems:

•Adverse selection - Immoral behavior that takes advantage of asymmetric information before a transaction. For example, a person who is not in optimal health may be more inclined to purchase life insurance than someone who feels fine.

•Moral Hazard - Immoral behavior that takes advantage of asymmetric information after a transaction. For example, if someone has fire insurance they may be more likely to commit arson to reap the benefits of the insurance.

2014, Investopedia, LLC

Choices of the individualWhile economists contemplating markets and quasi-markets (like markets in education and training) often claim that more information is necessary to create informed consumers, in fact their models of decision-making are considerably more complex.

The dominant model is the expected utility model, in which individuals choose one alternative from among many — the one that that maximizes their expected utility or their probable well-being. In slightly more formal terms, an individual chooses that alternative X1 among n alternatives such that:

E(U(X1)) > E(U(Xi), i = 2, n

(Grubb, OECD/ICCDPP 2002)

Role of Labour Market Intelligence in Lifelong Guidance

Information may be widely available in the Information Age, but individuals may not interpret it in the same way. Information which is not considered authoritative may not be considered, and the authority of information varies from group to group — a special problem in dealing with diverse groups with their own norms including teenagers, minority communities, ethnic communities including recent immigrants, sometimes rural communities, certainly aboriginal communities.

(Watts 1996, Grubb 2002)

Role of the State in LMI provision•Gather and analyse information as no other player could •Provide impartial information•Maintain flow of information •Develop LM intelligence based on labour market information•Translate LMI for different group needs (e.g. Icould project)

Role of the guidance community and research

•Keep the inter- and multidisciplinary approach of Lifelong Guidance as a practice, system design and as an (evaluated) policy –Moving from economics, sociology to psychology,

pedagogy and andragogy - and back! •Develop, maintain and „translate” LMI for end-users which can bridge information asymmetry during the decision making processes over the individual's lifespan •Career decisions are choices of lifestyle - so support individuals to develop their preferences

Thank you for your attention!