The Career Break (Time Credit) Scheme in Belgium and the Incentive Premiums by the Statements and Comments Celia Valiente University of Madrid Carlos III The aim of this paper is to provide comments to the discussion paper by Stephanie Devisscher (IDEA Consult) titled "Career Break in Belgium: Incentive Premiums by the " (in what follows, "discussion paper"). This paper is divided in 3 parts. In part 1, I identify the dimensions of the political, economic and social context in Spain that are relevant to the policy measure under scrutiny in the discussion paper (career break schemes in Belgium, hereafter "Belgian career breaks"). In part 2, I present a brief assessment of the (very limited) potential transferability of the Belgian career breaks. In part 3, I highlight important issues relevant to the Belgian career breaks that are currently being raised and debated in Spain. When possible, I pay attention to the potential contribution of the establishment of the Belgian break career schemes to the objectives and strategy of the Spanish National Action Plan for Employment (hereafter "Spanish NAPs"). 1. Dimensions of the political, economic and social context in Spain relevant to the potential transferability of the Belgian career breaks Two dimensions of the political, economic and social context in Spain are relevant to the potential transferability of the Belgian career breaks: (a) the labor market, (b) and the welfare state (a) Regarding the Spanish labor market, comparatively speaking it is characterized by low levels of employment, and high levels of temporary employment and unemployment. The Spanish employment rate 43 (58.4%) is the third lowest in the European Union (EU) after that of Italy (55.4%) and Greece (56.9%), and is six points lower than the EU average (64.2%). In Spain, the percentage of temporary employees out to the total of employees (31.2%) is not only by far the highest in the EU, but it is more than double the EU average (13.1%). The Spanish unemployment rate 44 (11.1%) is the highest in the EU, and is four points higher than the EU average (7.6%) (Franco and Jouhette 2003, 4-5; data for 2002). 43 In this paper, I use labor market statistics elaborated by Eurostat. In Eurostat statistics, employment rates represent employed people as a percentage of the same age population. Employed people are those aged 15 years and over (16 years and over in Spain, Sweden, United Kingdom and Iceland) who during the reference week did any work for pay or profit for at least one hour, or were not working but had jobs from which they were temporarily absent. Family workers are included. 44 In Eurostat statistics, unemployment rates represent unemployed people as a percentage of the active population. Unemployed people comprise people aged 15 to 74 who were without work during the reference week, were currently available for work and were actively seeking work or who found a job to start later. The active population (labor force) is defined as the sum of employed and unemployed people. 65
Gender differences in the Spanish labor market are very pronounced. The Spanish female employment rate (44.0%) is the third lowest in the EU, after that of Italy (41.9%) and Greece (42,7%), and is 11 points below the EU average (55.5%). In comparative terms, part-time work is still less widespread in Spain, where it accounts for 17,8% of female employment, 2,6% of male employment, and 8.0% of total employment--the equivalent EU average percentages are 33.0%, 6.6%, and 18.2% respectively. The Spanish female unemployment rate (16.3%) is more than double the Spanish male unemployment rate (7.7%). The Spanish female unemployment rate (16.3%) is not only the highest in the EU, but is almost double the EU average (8.6%) (Franco and Jouhette 2003, 7; data for 2002). (b) With respect to the welfare state, according to Esping-Andersen's typology of welfare states in industrial capitalist countries, 45 that of Spain (and Italy, France and Germany, among others) is of a continental type. In continental welfare states, social rights are linked to occupational categories and status (for instance, there are different insurance schemes for different types of workers). They (and their dependents) are the beneficiaries of the main social programs. The redistributive effects of social policy are minimal. One result of this social policy is a certain degree of decommodification, that is, "the degree to which individuals, or families, can uphold a socially acceptable standard of living independently or market participation" (Esping-Andersen 1990, 37). Provision of welfare benefits is mainly public. The welfare state aims at reinforcing the traditionally crucial role of the family as welfare provider. Thus, the state tends to intervene only when the capacity of the family to act as social provider is exhausted (Esping-Andersen 1990, 27-28, 48). 46 In Spain, as in any other continental welfare state, participation in the labor market is the main route of access to welfare state benefits, since, generally speaking, most of these have been historically given to workers (and their dependents) who have made the required contributions to the system (Guillén 1992, 12; 1996). The Spanish welfare state, as any other of continental type, only facilitates the participation of women in the labor market to a limited extent, because the welfare state is heavily transfer-oriented and offers very few social services (León 1999; 2002). In the early 1990s, approximately one tenth of the welfare of continental welfare states was dedicated to social services (health care excluded), while the figure was one third in the social democratic states (Esping-Andersen 1995, 2). Let me illustrate this point with the example of the policies for a group of the population in need of care: children under six, when mandatory school starts. After the 16 weeks of paid maternity leave (for those who work for wages and have made the required contributions to the social security system), working women receive little help from the state to combine work and family responsibilities: unpaid parental leave and other unpaid leaves to care for relatives (see below); pre-school services for children aged three or over (pre-school 45 Esping-Andersen (1990, 3-4) analyzed the variation across welfare states along three dimensions: the type of social rights; the type of stratification that the welfare state produces; and the interrelation of the state, the market and the family in the provision of welfare. 46 Two other types of welfare states exist in the classification made by Esping-Andersen (1990, 7-28): the social democratic and the liberal welfare states. In the social democratic welfare state, which exists in Scandinavia, universal benefits are numerous. De-commodification is high. Social programs are directed to all social classes. The purpose of social policy is to attain equality. The state provides generous care services for children, the elderly and other people in need of care. In the liberal welfare state, which exist in the United States, Canada and Australia among others, "means-tested assistance, modest universal transfers, or modest social-insurance plans predominate. Benefits cater mainly to a clientele of low-income, usually working-class, state dependents". De-commodification is very low. The state encourages market provision of welfare. 66
hours are usually shorter than working hours); a child allowance of 100 Euro per month per child younger than three years; and modest tax reliefs for dependent children (Valiente 2003a). 2. The potential transferability to Spain of the Belgium career breaks In this second part of the paper I proceed in three steps. First, I identify the factors that favor the transferability to Spain of the Belgium career breaks. Second, I identify the factors that hamper the transferability to Spain of the Belgium career breaks. Since the latter factors are more numerous and important than the former factors, I argue that the potential transferability to Spain of the Belgium career breaks is very limited. Finally, I highlight two aspects of the Belgium experience that should be avoided in Spain, in case the Belgium career breaks are transferred. 2.1. Factors that favor the transferability to Spain of the Belgium career breaks The factors that favor the transferability to Spain of the Belgium career breaks relate to: (a) the institutional configuration of the Spanish state; (b) the labor market; (c) the type of welfare state; and (d) the priorities of the main political actors. (a) With respect to institutional configuration of the Spanish state, Spain is a quasi-federal state with 17 regions. Labor law is one of the prerogatives of the central state. This factor facilitates the transferability to Spain of the Belgium career breaks because some of the Belgian schemes would require a change in the Spanish labor law. In Spain, it is not necessary to coordinate the 17 regions in order to change labor law, since labor law is one of the task of the central state. (b) As regards the labor market, most Belgian career break schemes consist in a reduction of the working day. Generally speaking, this reduction is more interesting for full-time workers than for part-time workers, since the working day of the former is considerably longer than that of the latter. As said, in Spain full-time work is still very preponderant. The preponderance of full-time work in Spain facilitates measures that allow workers to reduce their working day. One of the Belgian career break schemes is for workers over 50 years of age who have been employed for more than 20 years. One of the purpose of this scheme is to contribute to increase the participation of people over 50 years in the labor market. In Spain, the participation of people aged 50-64 years in the labor market is very low in comparative terms. According to the Spanish Labor Force Survey (Encuesta de Población Activa), in the fourth quarter of 2003, the Spanish activity rates of people aged 50-54, 55-59, and 60-64 were 67%, 54%, and 33% respectively (Instituto Nacional de Estadística 2004). 47 Any measure that will directly or indirectly intend to raise the employment rate of older workers is welcome in Spain and will solve an important problem: that of the low employment rate of these workers. Moreover, the increase of citizens' employability has been one objective of the Spanish NAP in recent years. 47 The activity rate is the proportion of active people (employed and registered unemployed) in the population of working age (people aged 16 or over, for the Spanish Labor Force Survey). 67
(c) (d) In respect of the characteristics of the Spanish welfare state, I mentioned above that comparatively speaking it is very transfer-oriented, and offers few publicly-funded care services. Then, many people with caring responsibilities cannot turn to care services but should find other alternatives to combine work and family duties. Measures of working-time management may then be useful in Spain to a relevant number of workers. With regard to the priorities of the main political actors, since 1996 the conservative People's Party (Partido Popular, PP) is in power at the central state level. The main opposition party is the socialdemocratic Spanish Socialist Workers' Party (Partido Socialista Obrero Español, PSOE). A general election will take place on 14 March 2004. The combination of family and work responsibilities is an issue identified in the electoral debates by both the PP and the PSOE as a pressing problem that necessitates state intervention. Then, the combination of work and family will occupy a prominent place in PP and PSOE electoral platforms. Moreover, one of the main goals of the recent Spanish NAPs is the establishment of measures to facilitate the combination of family and professional duties. 48 The combination of work and family responsibilities can be solved, at least, with two strategies: a development of publicly-financed care services, and a development of leaves that allow workers to care for their relatives. In general, the PP is more in favor of the latter strategy than the former (Valiente 2003b). According to opinion polls, it is likely that the PP will again be in power after the 2004 general election (El País 25 January 2004, 15). Any career break scheme will fit the PP priorities more than any devise to develop publicly-funded care services. 2.2. Factors that hamper the transferability to Spain of the Belgium career breaks The factors that seriously hamper the transferability to Spain of the Belgium career breaks relate to: (a) the labor market; and (b) the type of welfare state; and to a lesser extent (c) the position of some political and social actors. (a) As for the labor market, I have already mentioned that Spanish employment rates (and specially female employment rates) are among the lowest in the EU. This means that many Spaniards do not work for wages and are therefore available to care for others. This Spanish situation is contrary to the situation in Flanders, where "the employment rate of Flemish people aged 25 to 45 is among the highest in Europe, leaving little room for care tasks" (see p. 6). In a context in which there are people available for care, it is very difficult to defend measures that allow working people to take time off work to care for others. As mentioned above, Spain has the highest rate of temporary employment in the EU (around a third of workers work with temporary contracts). The prevalence of temporary employment is almost an insurmountable obstacle to career breaks because in order to plan career breaks, workers need to have permanent employment, or at least temporary contracts of long duration. 48 The PSOE elaborated the main lines of its electoral platform in the Political Conference held in Madrid on 17-18 January 2004. The electoral platform will be available soon at the PSOE web page (www.psoe.es). The PP electoral platform will be available on the PP web page (www.pp.es) after the presentation of the platform in the PP National Convention to be held on 14-15 February 2004. 68
Most working Spaniards work in small companies, because the overwhelming majority of companies in Spain are small. This small average size of companies is a barrier to the establishment of career breaks, because small companies have more difficulties than big companies to re-organize work in reaction to the absence of some of their workers. The big size of the underground sector of the Spanish economy in general and of the labor market in particular is also an impediment to any attempt to introduce career breaks, because in the informal sector of the economy social rights usually do not exit. Let me show some data about the importance of the Spanish underground economy. In 2001, the European Commission issued a report estimating that the economic activities not reported to tax authorities (and then irregular or underground) amounted to approximately 22% of the Spanish GDP in 2001. This percentage was not lower but higher than that of 1998 (14%). As for the labor market, it is estimated that one out of ten workers is in an irregular situation regarding contributions to the social security. Underground labor practices are especially present in the domestic service, agriculture, and the textile and shoe-making industry. A higher proportion of women (especially with low levels of education) than men is hired in the informal sector (El País 18 August 2001, 8; Mota 2001). The increasing number of immigrant people coming to Spain to take the usually non-skilled jobs that Spaniards are no longer willing to perform is also a factor that hinders the transferability of the Belgian career breaks to Spain. The number of immigrants have been increasing exponentially in Spain in the last years. For instance, in 2000, 923,879 foreigners live in Spain, while in 2003 the equivalent number was 2.500,000. In 2003, immigrants represented 6 percent of the Spanish population (total Spanish population: 42.600,000 inhabitants) (El País 3 December 2003, 30). Many female immigrants work as domestic servants or carers, very often in the informal sector of the economy. Therefore, the numerous pool of immigrants available to care for others makes the transferability of the Belgian career breaks to Spain highly unlikely. In Spain, low-earners are protected a statutory national minimum wage (Salario Mínimo Interprofesional), which is the same for all sectors and all jobs, and which might be improved by collective agreements. Comparatively speaking, the Spanish minimum wage is low (15.04 Euro per day or 451.20 Euro per month in 2003; Ministerio de Trabajo y Asuntos Sociales 2004). The establishment of Belgian career breaks in Spain is impeded by this low minimum wage, because some of the Belgian benefits are higher than the Spanish minimum wage (see p. 12). Employers' preferences is the last factor related to the labor market that hinders the establishment of Belgian career breaks in Spain. It is reasonable to argue that generally speaking, and with exceptions, Spanish employers are not interested in career breaks for their employees. Given the low levels of employment and the high levels of unemployment, employers can easily find other workers to replace people currently working in their companies. Finding alternative workers is for employers less costly than providing current workers with rights to career breaks. It is true that when replacing workers employers incur in many costs, including training cost. Nevertheless, Spanish employers tend to provide workers with only modest training (Pérez Díaz and Rodríguez Pérez 2002). Moreover, given the high levels of unemployment and temporary employment, and the low levels of employment, very few workers would consider to apply for career breaks, which could jeopardize the maintenance of their jobs. 69
(b) In regard to the welfare state, Spain already has two non-paid care leaves apart from the 16 weeks of maternity leave, which are paid. There is provision for up to three years of non-paid parental leave for working mothers or fathers. The right to return to one's job is only guaranteed during the first year. The right to a job in the same professional category is guaranteed during the second and third years. The period of leave is counted as effectively worked in terms of seniority. There is also provision for a year of leave to care for a non-working relative up to the second degree of kinship who needs the care of another person because of age, accident or illness. The fact that the two aforementioned care leaves are non-paid hinders the establishment of Belgian career breaks, because these are paid at a relatively generous level (see p. 11), and this type of measure will be very costly in Spain. (c) Regarding the position of some political and social actors, one can expect opposition (at least at the level of the discourse) from some sectors of the PSOE, and the feminist branch of the women's movement. Both of them would favor an extension of publicly-funded care services and will be very reluctant (and even opposed) to measures that allow workers (that is, mainly women) to reduce their commitment to the labor market in order to care for others. In sum, given that factors against the transferability of the Belgian career breaks clearly outnumber factors for this transferability, I argue that the establishment of the Belgian career breaks is unlikely (but not impossible) in Spain in the near future. 2.3. Aspects of the Belgium experience that should be avoided in Spain The aspects of the Belgium experience that should be avoided in Spain (and elsewhere) are two: the complexity of rules on career breaks, and the limited diffusion of information on this right among workers. In general, it is advisable that policies for workers follow simple rules and that workers know the policies that affect them. It should be possible for workers to easily apply for these policies, and for state officials to rapidly process these applications. 3. Important issues relevant to the Belgium career breaks that are currently being raised and debated in Spain Belgian career breaks and any other measures that attempt to help workers combine their work and family responsibilities will theoretically make women more employable, thus reducing female unemployment and unemployment in general. In the last decades, unemployment and terrorism have consistently been the issues (together with others) that the majority of the population in Spain consider pressing problems while answering to opinion polls. For instance, the 2003 December Barometer made by the Center for Sociological Research (Centro de Investigaciones Sociológicas) asked a representative sample of the Spanish adult population about the three most pressing problems in current Spain. Three answers were allowed. Unemployment was chosen by 63 percent of respondents, (Basque) terrorism by 43 percent, and urban insecurity by 23 percent (Centro de Investigaciones Sociológicas 2004). 70
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