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OECD’s recent analysis of the employment and social situation in OECD and key emerging economies, policy recommendations to spur growth, boost confidence and soften the impact of the jobs crisis. By …

OECD’s recent analysis of the employment and social situation in OECD and key emerging economies, policy recommendations to spur growth, boost confidence and soften the impact of the jobs crisis. By Paul Swaim, Senior Economist, Directorate for Employment, Labour and Social Affairs.

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  • 1. OECD Parliamentary Days 5 February 2014 LATEST LABOUR MARKET DEVELOPMENTS AND SOME SOCIAL POLICY CHALLENGES Paul Swaim Senior Economist Employment, Labour and Social Affairs OECD
  • 2. The labour market impact of the crisis and recovery has been large, but highly uneven across countries Unemployment rate, percentage of the labour force % 13 12 OECD area Euro area Japan United States 11 10 9 8 7 6 5 4 3 Shaded area refers to the latest projections from the OECD Economic Outlook n 94. Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 4 February 2014) and OECD Economic Outlook Database. 2
  • 3. Long-term unemployment has risen in most countries, but sharp hikes are confined to only a fewa,b Percentage of unemployment,Q4 2007 and Q3 2013 % 80 Q4 2007 Q3 2013 70 60 50 40 30 20 10 0 Note: Countries are shown by ascending order of the incidence of long-term unemployment in Q3 2013. a) Data are not seasonally adjusted but smoothed using three-quarter moving averages. OECD is the weighted average of 32 OECD countries excluding Chile and Korea. b) Latest data for Israel corresponds to 2012. Source: OECD calculations based on quarterly national Labour Force Surveys (Cut-off date: 15 January 2014). 3
  • 4. Youth unemployment has reached very high levels in some OECD countries % Percentage of youth (aged 15-24) labour force, Q4 2007a- Q4 2013b 70 Q4 2007 Q4 2013 60 50 40 30 20 10 0 Note: Countries shown in ascending order of the youth unemployment rates in Q4 2013. a) Q2 2007 for Switzerland. b) Q3 2013 for Chile, Estonia, Greece, Hungary, Israel, Korea, Mexico, New Zealand, Norway, Switzerland, Turkey and the United Kingdom. Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 4 February 2014) . 4
  • 5. Very large increases in the number of workless households are a major test for social policies Shares of adults living in workless households, in percentages % 21 2007 2012 (↗) 18 15 12 9 6 3 0 Note: Households are defined as “workless” if all household members are either unemployed or labour-market inactive. “Adults” refers to the population aged 15-64. 2013 instead of 2012 for the United States. Source: OECD estimates based on the European Union Labour Force Survey and the United States Current Population Survey. 5
  • 6. Social spending, especially for working-age people, is most-frequently cited item in consolidation plans % of participating countries Major programme measures in fiscal consolidation plans, by domain, based on 2011 and 2012 surveys, OECD Government spending by function, 2011, OECD average 80 70 Plan 2012 Plan 2011 Education Working-age transfers 60 50 Health 40 30 Other 20 10 Pensions 0 Other social protection Note: A questionnaire was submitted to countries in December 2011 to update The OECD 2010-11 report on fiscal consolidation strategies. Based on country responses and publicly available sources, information was collected for 31 countries. Explanation: 70% of countries plan to cut welfare spending in 2012. Welfare includes working-age social transfers, such as unemployment benefits, social assistance, disability benefits, child benefits, etc. Pensions comprise old-age pensions. Source: OECD National Accounts, OECD (2012), “Restoring Public Finances, 2012 Update”, and OECD (2011), "Restoring Public Finances: Fiscal Consolidation in OECD Countries". 6
  • 7. Pensions at a Glance 2013 • The distributional impact of pension reforms – Future pension entitlements will fall but low earners have been generally protected – To maintain the same standard of living people will need to work longer – Higher pension ages: 67 is the new 65 • What about future retirement-income adequacy? – Which role can housing, financial wealth and public services play? • Pension indicators cover OECD and G20 countries with 2012 rules/parameters 7
  • 8. Thank you Contact: Stefano.Scarpetta@oecd.org OECD Directorate for Employment, Labour and Social Affairs, via www.oecd.org/els OECD Employment Outlook, via www.oecd.org/employment/outlook OECD Society at a Glance, via: www.oecd.org/social/societyataglance.htm OECD Pension at a Glance, via: www.oecd.org/pensions/pensionsataglance.htm OECD Employment database, via www.oecd.org/employment/database 8