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OECD Employment Outlook 2016

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OECD Employment Outlook 2016

  1. 1. OECD Employment Outlook 2016 7 July 2016 OECD Employment Outlook 20016 www.oecd.org/employment/outlook
  2. 2. The jobs recovery continues, but remains incomplete in the majority of OECD countries Evolution of the employment-to-population ratio as a percentage of the population aged 15-74 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: Shaded area refers to the OECD projections. OECD is the weighted average for the 34 OECD member countries. Euro area is the aggregate of 15 OECD countries of the euro area. 54 56 58 60 62 64 66 68 70 % Projections • Japan • United States • OECD • Euro Area
  3. 3. Unemployment has been falling but remains above its pre-crisis level in most OECD countries Evolution of the unemployment rate as a percentage of the labour force OECD Employment Outlook 20016 www.oecd.org/employment/outlook 2 3 4 5 6 7 8 9 10 11 12 13 % Projections Note: OECD is the weighted average for the 34 OECD member countries. Euro area is the aggregate of 15 OECD countries of the euro area. • Euro Area • OECD • United States • Japan
  4. 4. Long-term unemployment has fallen more slowly than total unemployment Long-term unemployed (12 months and over) as a percentage of total unemployed, Q4 2007-Q4 2015 0 10 20 30 40 50 60 % Note: OECD is the weighted average of 33 OECD countries excluding Chile. OECD Employment Outlook 20016 www.oecd.org/employment/outlook • Euro Area • Japan • OECD • United States
  5. 5. Real hourly earnings have grown slowly since the onset of the crisis Index base 100 in Q4 2007 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: Total wages divided by total hours worked of employees deflated using the private consumption price index. OECD is the weighted average of 27 OECD countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway and Turkey). 98 100 102 104 106 108 110 • Euro Area • OECD • United States • Japan
  6. 6. The post-crisis surge in unemployment led to slower nominal wage growth, but this effect has now been reversed in some countries Wage-Phillips curves: Relationship between nominal wage growth and change in the unemployment rate since the start of the crisis, Q4 2007-Q4 2015 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: Nominal wage growth: year-on-year percentage change in nominal hourly wage (defined as total wages divided by hours worked of employees); unemployment gap: percentage-points change in the unemployment rate since the start of the crisis in Q4 2007. OECD: Unweighted average of 27 OECD countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway and Turkey). Euro area: Unweighted average of the 17 euro area countries. 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 -1 0 1 2 3 4 Nominal hourly wage growth, % Unemployment gap, percentage-points change OECD Q4 2015 Q4 2007 0 1 2 3 4 5 6 7 -1 0 1 2 3 4 5 6 Nominal hourly wage growth, % Unemployment gap, percentage-points change Euro area Q4 2007 Q4 2015 -3 -2.5 -2 -1.5 -1 -0.5 0 0.5 1 1.5 2 -1 -0.5 0 0.5 1 1.5 2 Nominal hourly wage growth, % Unemployment gap, percentage-points change Japan Q4 2007 Q4 2015 0 0.5 1 1.5 2 2.5 3 3.5 4 0 1 2 3 4 5 6 Nominal hourly wage growth, % Unemployment gap, percentage-points change United States Q4 2007 Q4 2015
  7. 7. Youth unemployment has receded from its post-crisis peak, but remains very high in a few European countries Percentage of youth (aged 15-24) labour force, Q4 2007- Q4 2015 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: Youth aged 16-24 for the United States. Q1 2016 for Canada and the United States. Country-specific peak is defined as the maximum value of the youth unemployment rate since the start of the crisis (Q4 2007). 0 10 20 30 40 50 60 % Q4 2007 Country-specific peak Q4 2015 (↗)
  8. 8. The NEET rate has increased in the majority of OECD countries Percentage of youth aged 15-29 who are neither employed nor in education or training, 2007-15 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: 2008 and 2013 for Korea. OECD is the unweighted average of 33 OECD countries (excluding Israel). 0 5 10 15 20 25 30 35 40 45 % 2007 2015 (↗)2007 2015 (↗)
  9. 9. Many NEETs have not finished upper-secondary schooling Percentage distribution of youth aged 15-29 who are neither employed nor in education or training by educational attainment, 2015 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: 2013 data for Korea. OECD is the unweighted average for the 34 OECD member countries. High-skilled refers to NEETs with at least a tertiary degree and low-skilled to persons who have not finished upper secondary schooling. 0 10 20 30 40 50 60 70 80 90 100 % • High-skilled • Medium-skilled • Low-skilled
  10. 10. Cumulative gaps in real hourly wage growth since the crisis Percentage shortfall of the Q4 2015 real hourly earnings with respect to a counterfactual value calculated assuming the pre-crisis growth rate (Q1 2000 to Q4 2007) had continued after Q4 2007 OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: OECD is the weighted average of 27 OECD countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway and Turkey). -20 -10 0 10 20 30 40
  11. 11. The majority of OECD countries still face a significant unemployment gap, a significant wage gap or both OECD Employment Outlook 20016 www.oecd.org/employment/outlook Note: The unemployment gap is defined as the percentage-point change in the unemployment rate in Q4 2015 relative to its level in Q4 2007 (just before the crisis). The wage gap (real hourly earnings) is defined as the percentage shortfall of the Q4 2015 value with respect to a counterfactual value calculated assuming the pre-crisis growth rate during Q1 2000 to Q4 2007 (Q1 2002 to Q4 2007 for Poland) had continued after Q4 2007. AUS AUT BEL CAN CZE DNK EST FIN FRA DEU GRC HUN IRL ISR ITA JPN LUX NLD POL PRT SVK SVN ESP SWE CHE GBR USA EA19 OECD LVA -20 -15 -10 -5 0 5 10 15 20 25 30 35 40 45 50 55 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 Real hourly wage gap (Percentage change) Unemployment gap (percentage-points change) Unemployment gap of at least 2 percentage points and wage gap of at least 5% Unemployment gap of at least 2 percentage points, no/small wage gap No/small unemployment gap and no/small wage gap No/small unemployment gap, wage gap of at least 5%
  12. 12. Skills proficiency explains a small part of the variation in skills use, while occupation and work organisation explain a large part Share of skills use variance explained by individual and firm factors, OECD PIAAC countries OECD Employment Outlook 20016 www.oecd.org/employment/outlook 0 10 20 30 40 50 60 Use of reading at work Use of writing at work Use of numeracy at work Use of ICT skills at work Problem solving skills at work Firm size Occupation Industry High-Performace Work Practices (HPWP) Skills proficiency Country fixed effects
  13. 13. Higher skills use at work is associated with higher wages, over and above the effect of skills proficiency Percentage change in wages associated to a standard deviation increase in skills use, proficiency and years of education OECD Employment Outlook 20016 www.oecd.org/employment/outlook 0 0.04 0.08 0.12 0.16 0.2 Use of reading at work Use of writing at work Use of numeracy at work Use of ICT skills at work Problem solving skills at work Skills proficiency Skills use at work Years of education
  14. 14. High-Performance Work Practices (HPWP) can positively influence the use of information-processing skills at work Average skills use at work, by HPWP intensity OECD Employment Outlook 20016 www.oecd.org/employment/outlook 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving A. Work flexibility - Sequence of tasks 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving B. Work flexibility - Speed of work 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving C. Work flexibility - How to do work 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving E. Instructing, teaching and training others 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving F. Sharing information with co- workers 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving G. Organising own time 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving H. Planing own activities 1 2 3 4 Reading Writing Numeracy ICT at work Problem solving D. Co-operating with co-workers • To a high extent and more • Up to some extent • Not at all • At least once a week • At least once a month • Never
  15. 15. The use of bonuses, training and flexible working hours can promote skills use by enhancing workers’ motivation to make full use of their skills at work 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Reading Writing Numeracy ICT at work Problem solving Flexible working hours minus no flexibility Training last year minus no training Bonus minus no bonus OECD Employment Outlook 20016 www.oecd.org/employment/outlook
  16. 16. Structural reforms can boost the economy in the long run: the case of product market regulation Aggregate employment gains from competition-enhancing reforms, in percentage OECD Employment Outlook 20016 www.oecd.org/employment/outlook 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 %
  17. 17. Structural reforms can boost the economy in the long run: the case of labour market regulation Aggregate labour market effects of flexibility enhancing EPL reforms OECD Employment Outlook 20016 www.oecd.org/employment/outlook ** *** *** 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 Wage and salary employment (%) Wages (%) Wages, composition corrected (%) Low-skilled share in hours worked (percentage points) Note: ***, ** denote estimated impacts that are significant at the 1% , 5% level, respectively.
  18. 18. In the short-run reforms can entail job losses Cumulative percentage change in employment up to 4 years following reform OECD Employment Outlook 20016 www.oecd.org/employment/outlook -2.5 -2 -1.5 -1 -0.5 0 0.5 Before 1 2 3 4 Time since reform (years) A. Barriers to Firm Entry -1.5 -1 -0.5 0 0.5 Before 1 2 3 4 Time since reform (years) B. Dismissal regulations
  19. 19. Short-term job losses from EPL reforms are minimized in dual labor markets Cumulative percentage change in employment up to 4 years following reform OECD Employment Outlook 20016 www.oecd.org/employment/outlook - 1.2 - 0.8 - 0.4 0.0 0.4 0.8 Before 1 2 3 4 Time since reform (years) 15% of fixed-term contracts 10% of fixed-term contracts 5% of fixed-term contracts
  20. 20. OECD Employment Outlook 20016 www.oecd.org/employment/outlook Many countries are converging to low gender participation gaps, but progress is uneven Percentage-point difference in labour force participation rates between men and women of working-age 0 10 20 30 40 50 60 p.p A. Countries experiencing strong decline in the gender participation gap Argentina Brazil Chile Colombia Costa Rica Mexico Peru OECD 0 10 20 30 40 50 60 p.p B. Countries experiencing no change in the gender participation gap at a low level China Russian Federation South Africa OECD 0 10 20 30 40 50 60 p.p C. Countries experiencing no change in the gender participation gap at a high level Egypt India Indonesia Morocco Tunisia Turkey OECD Note: OECD is the unweighted average of the 34 OECD member countries.
  21. 21. OECD Employment Outlook 20016 www.oecd.org/employment/outlook Top management positions are dominated by men, but progress has often been sizable Women’s share of top management or executive positions as a percentage of all top management or executive positions, 2000 and 2014 0 10 20 30 40 50 Egyp Morocco Turkey India Tunisie Indonesia Peru China South Africa OECD Argentina Costa Rica Mexico Brazil Russia Federation Colombia Chili 2014 2000 Note.: OECD is the unweighted average of the 33 OECD member countries (Israel not included).
  22. 22. OECD Employment Outlook 20016 www.oecd.org/employment/outlook The gender pay gap remains substantial in most countries Difference between male and female median earnings divided by male median earnings 0 10 20 30 40 50 60 Costa Rica Colombia Mexico Argentina Turkey OECD Chile Brazil Indonesia Peru South Africa Russian Federation India % 1990s 2000s 2010s (↗) Notes: Earnings refer to the monthly earnings of full-time employees (usually persons working at least 30 hours per week). The pay gap has been averaged over the available years within each decade. OECD is the unweighted average of the 34 OECD member countries

Editor's Notes

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