Fedea warns that long-term unemployment hinders the full recovery of the economy – Yahoo Finance Spain

MADRID, 15 (EUROPA PRESS)

The high number of long-term unemployed in Spain is a threat to social cohesion and hampers full recovery of the economy, warns the Foundation of Applied economic Studies (Fedea) in two reports prepared under the program of JP Morgan ‘New skills at work’.

He recalls Fedea, 14 % of the Spanish workforce has more than a year in unemployment (LTU) and this group nearly 70% spent more than two years in this situation (very long-term unemployment).

the long-term unemployment, highlights one of the reports, it is much more widespread and entrenched in Spain than in other OECD countries, which has caused a “severe deterioration” in the employment prospects of this group, especially among the very long-term unemployed, representing 10% of the working population.

While the exit rates to employment to improve short-term unemployed, the chances of finding a job for unemployed length continue at their lowest levels since the beginning of the crisis, generating, according Fedea, “a substantial risk of social and economic exclusion.”

the Foundation notes that there are several factors that can explain the negative impact of unemployment duration in exit rates to employment. On the one hand, it mentions the fact that the skills of the unemployed can be depreciated over time or unemployed can reduce search intensity by not receiving jobs.

The other factor, she says, is that companies may have a preference for workers with recent work experience.

“Each of these three factors helps explain how a prolonged reduction in the demand for labor can become a chronic problem due to the accumulation a large stock of long-term unemployed whose job prospects deteriorate over time, “explains Fedea.

on the other hand, for the most disadvantaged, mostly older than 50 years and some workers qualified and / or from the construction sector, low exit rates to employment are explained, according Fedea for their individual characteristics rather than the duration of their unemployment.

So, warns that the most effective to combat long-term unemployment instruments vary depending on whether the causes are due to the effects of negative duration dependence, mismatches between supply and demand for skills and the age profile of the unemployed.

MORE rEFORMS NEEDED.

at this point, Fedea understood to establish economic incentives for hiring long-term unemployed can provide good results if its low output rates of unemployment are due to the negative effects of long periods of unemployment.

on the other hand, he notes that the reintegration of the most disadvantaged groups requires “intensive” aid from public employment services and personalized attention, professional guidance and training .

Despite the latest plan for aid to long-term unemployed is in the proper orientation, Fedea insists that more reforms are needed and considers key modernization of public employment services and strengthening its collaboration with private employment agencies.

the Foundation also alert the sharp reduction in public funds allocated to training programs for the unemployed and says that one of the main priorities would be to design flexible programs ” . “second chance that allowed to combine training and employment