Impact of tourism on job quality: analysis of European regions shows the importance of institutional environment for better job quality

While the ability of tourism to create new jobs is unquestionable, it is often said that these jobs are of low quality and insecure. Despite this criticism, many public administrations still consider tourism a valid way to create new jobs in their regions.

The quality of a job is a measure of how beneficial the job is for the employee. This includes physical, psychological, social, and organizational aspects of the job, as well as the demands the job places and the processes that affect these factors. Psychological and physical well-being, as well as attitudes and job satisfaction, are particularly important.

When analyzing job quality, most research considers a wide range of factors, including individual autonomy, salary, job security, working conditions, qualification requirements, workplace relationships, and work-life balance.

Seasonal and low-skilled work
The tourism sector encompasses many different economic areas – accommodation, hospitality, transportation, entertainment, sightseeing, and so on – and cannot be treated as a homogeneous whole. However, the fact is that jobs in accommodation and hospitality are often of lower quality compared to other economic sectors.

This low quality stems from the specific characteristics of these sectors: they offer low-skilled, seasonal jobs with long working hours, including weekends. Additionally, the labor market in tourism offers below-average wages and few opportunities for training and professional development. These circumstances particularly affect the most vulnerable segments of the working population, such as young people and immigrants.

Tourism development and jobs outside the tourism sector
Dependence on the tourism sector does not necessarily mean more low-quality jobs. There are two factors to consider.

First, tourism development indirectly generates jobs outside the tourism sector, in areas such as consulting, energy, transportation, healthcare, and public administration. These can be high-quality jobs that help balance the overall employment quality within the region.

Second, job quality largely depends on the rights, regulations, and protections provided by national governments. These vary significantly from country to country.

The impact of governments on job quality
Along with the level of education and employment rate, one of the factors that strongly influences job quality is what is called the "institutional employment regime" of the country – a term that encompasses labor legislation, employment policies, and the relationships between employers and unions. Applying this concept to job quality is known as the theory of employment regimes.

At the European level, this theory classifies different institutional regimes into five major groups:
Social-democratic, mainly present in Scandinavian countries. These regimes typically provide robust, extensive social benefits, support worker training, and have influential unions.

Liberal, such as the UK and Ireland, which have weaker employment protection legislation and weak unions.

Continental, which includes countries like France and Germany. These regimes are somewhere between social-democratic and liberal regimes.

Southern European, including Spain, Portugal, Greece, and others, where the state relatively little intervenes in labor regulation, and unions have relatively little influence on working conditions. In these countries, state vocational training is limited, incentives for employers to invest in training are low, and employees show little initiative for lifelong learning. The result is a lower level of worker skills.

Transitional (the term refers to the liberalization and economic efficiency and consolidation of the country's legal and institutional regime), which includes countries like Bulgaria or Poland. In this category, autocratic management structures limit participation in workers' organizations, and economic liberalization reduces job security and increases cost-cutting measures during staff training.

Tourism and job quality: location matters most
Our recent study, published in March 2024, analyzed the relationship between tourism development and job quality in several European regions.

Based on samples from the European Working Conditions Survey from 2015 (almost 44 thousand people) and 2021 (almost 72 thousand people), we analyzed employment quality in various European regions, using specific EU NUTS2 administrative units.

Our research included all types of regions, from those with very high tourism development – such as the Spanish Canary and Balearic Islands – to those with much lower tourism development, such as Radom in Poland and Northwest in Bulgaria.

Although southern European regions have higher levels of tourism development and, generally, lower job quality, our analyses show that job quality is not directly linked to tourism activity. In fact, in all the regions we studied, job quality was most influenced by the institutional environment – which includes, among other things, government legislation and workers' rights.

Tourism jobs are not inherently of low quality
Our study showed that in Europe there is no direct link between tourism development in a region and employment quality. However, we found that the social-democratic institutional regime is the one associated with higher job quality, followed by continental and then liberal regimes. Southern European and transitional regimes are the worst in terms of job quality.

In light of these results, policymakers who want to increase job quality should focus not on the type of employment, but on analyzing where the elements of their government and institutions fall short.