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17 March 2017
Catherine L. Mann
OECD Chief Economist
OECD Going for Growth 2017
Policies for Growth
To Benefit All
http://...
Key messages
2
Most people in many OECD countries have seen little or no income growth
• Weak growth in productivity & wag...
Growth in household disposable income (average annual rate, mid-2000s to latest year)
OECDcountries,householdsatmedianandb...
4
Productivity gaps have widened, and
wage inequality is increasing
Note: Frontier firms are the 5% of firms with the high...
Difference in pre-crisisvs post-crisisproductivity growth and employment rates
5
Employment rates are above pre-crisis lev...
Indicator of number of actions taken in response to
OECD Going for Growth recommendations
6
Progress on the implementation...
Indicator of number of actionstaken in responseto Going for Growth
recommendationsover 2-year periods
7
Stronger efforts t...
8
These efforts to promote inclusiveness
are beginning to pay off
Source: Going for Growth 2017
Differencesin the employment rates of men and women
9
The gender gap in employment has fallen
over time
Source: Going for ...
New priorities: The extended framework
Policies
(e.g. childcare)
Quantitative assessment
(performance-policy matching algo...
Inclusiveness comprises a number of
income and non-income aspects
Inequality in household
disposable income
• Gini coeffic...
o Matching of specific performance area and related policy settings
o OECD average set as benchmark
o When countries lie b...
Policies
(e.g. childcare)
Desks' expertise
(qualitative assessment of country-specific
circumstances)
Quantitative assessm...
14
Outcome of the two-step process: Reform
recommendations for many specific policies
Source: Going for Growth 2017
• Skills: Preparing young people for labour market
of the future while improving gender balance
• Firms: Promoting busines...
16
Key reform priorities: Skills
Source: Going for Growth 2017
Preparing youth for labour market of the future while
impro...
17
Key reform priorities: Firms
Source: Going for Growth 2017
Promoting business dynamism and diffusion of
technology and ...
18
Key reform priorities: Jobs
Source: Going for Growth 2017
Recommendation Countries with a priority
Facilitate firm entr...
Pro-growth reforms can go
hand-in-hand with inclusiveness
Per cent of
2017 priorities
Share of countries with joint priorities in areas with potentially strong synergies
20
Packaging of reforms is key to achi...
Effect of a 0.1% of GDP increase in ALMP spending on the re-employment
probability – conditional on the regulatory barrier...
22
But in the past, countries have often missed
opportunities to benefit from policy synergies
Reform progress made in the...
Thank you!
http://oe.cd/gfg
http://www.oecd.org/eco/goingforgrowth.htm
Main contributors:
Alain de Serres
Nicolas Ruiz
Alb...
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Going for-growth-oecd-2017-policies-for-growth-to-benefit-all

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Presentation of the 2017 OECD publication of Going for Growth at the March 2017 G20 meeting

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Going for-growth-oecd-2017-policies-for-growth-to-benefit-all

  1. 1. 17 March 2017 Catherine L. Mann OECD Chief Economist OECD Going for Growth 2017 Policies for Growth To Benefit All http://www.oecd.org/eco/goingforgrowth.htm ECOSCOPE blog: oecdecoscope.wordpress.com
  2. 2. Key messages 2 Most people in many OECD countries have seen little or no income growth • Weak growth in productivity & wages, rising wage dispersion & income inequality • These trends are undermining political support for evidence-based policies The pace of structural reform has showed a mixed picture • Reforms to work incentives and to encourage female participation are paying off • Reforms in productivity-related areas have slowed Packages of reforms are needed to get maximum effect and ensure benefits are broadly shared, but most countries are not doing this Going for Growth identifies a package of 5 country-specific priorities for each country to achieve inclusive growth
  3. 3. Growth in household disposable income (average annual rate, mid-2000s to latest year) OECDcountries,householdsatmedianandbottom20% incomelevels 3 Most people in many OECD countries have seen little or no income growth for a decade Source: OECD Income Distribution Database. -1 0 1 2 3 4 5 6 7 GBR SVN DNK FRA ESP JPN ISL AUT HUN BEL FIN OECD CAN KOR NZL Median household income growth at less than 2 % -7 -6 -5 -4 -3 -2 -1 0 GRC IRL ITA MEX USA PRT NLD LUX DEU Median household income has fallen Median Bottom 20% 0 1 2 3 4 5 6 7 CZE CHE SWE AUS NOR ISR SVK CHL TUR POL LVA EST Stronger income growth for median household
  4. 4. 4 Productivity gaps have widened, and wage inequality is increasing Note: Frontier firms are the 5% of firms with the highest labour productivity by year and sector. Industries included are manufacturing and business services, excluding the financial sector, for firms with at least 20 employees. Source: Andrews, D., Criscuolo C., and Gal P. (2016), “The Best versus the Rest: The Global Productivity Slowdown, Divergence across Firms and the Role of Public Policy”, OECD Productivity Working Papers, No. 05; Orbis data of Bureau van Dijk; and OECD calculations. Real compensation per worker Index, 2001 = 100 Labour productivity Index, 2001 = 100
  5. 5. Difference in pre-crisisvs post-crisisproductivity growth and employment rates 5 Employment rates are above pre-crisis levels in many countries, but productivity growth is weaker Source: Economic Outlook database Database. Countries where both employment and productivity growth have fallen Countries where productivity growth has fallen but employment improved
  6. 6. Indicator of number of actions taken in response to OECD Going for Growth recommendations 6 Progress on the implementation of structural reforms has declined to pre-crisis levels … particularly for productivity-related reforms Source: Going for Growth 2017
  7. 7. Indicator of number of actionstaken in responseto Going for Growth recommendationsover 2-year periods 7 Stronger efforts to promote job market integration of youth, low-skilled and women Source: Going for Growth 2017
  8. 8. 8 These efforts to promote inclusiveness are beginning to pay off Source: Going for Growth 2017
  9. 9. Differencesin the employment rates of men and women 9 The gender gap in employment has fallen over time Source: Going for Growth 2017
  10. 10. New priorities: The extended framework Policies (e.g. childcare) Quantitative assessment (performance-policy matching algorithm) Employment Productivity Inclusiveness Outcomes (e.g. aggregate employment) Policies (e.g. labour tax w edge) Outcomes (e.g. total factor productivity) Policies (e.g. administrative burdens) Outcomes (e.g. gender gaps)
  11. 11. Inclusiveness comprises a number of income and non-income aspects Inequality in household disposable income • Gini coefficient • Income share bottom 20% Poverty • Relative poverty rates – Total population – Working-age population – Children – Youth – Elderly • Poverty mean gap Emerging economies • Absolute poverty rate • Absolute poverty gap Top income and wealth shares • Top 1% income share • Top 1% wealth share Earnings inequality and quality • D5/D1 earnings ratio • D9/D5 earnings ratio • Earnings quality • Gender wage gap Labour market insecurity and informality • Unemployment risk • Unemployment insurance Emerging economies • Vulnerable employment • Incidence of informality • Risk of extreme low pay Labour market inclusiveness • Female employment gap • Elderly employment gap • Youth unemployment gap • Foreign-born unemployment gap • Long-term unemployment rate Skills and equality of educational opportunities • Upper-secondary education share • PISA scores: mean and overall variation • PIAAC scores: mean and gender gap • Low-performing students and adults • Impact of socio-economic background on PISA scores • NEET share Health outcomes and inequalities • Female life expectancy • Male life expectancy • Self reported good health • Low-high income health gap Emerging economies • Child mortality • Access to sanitation Labour market: job quantity & quality Income dimensions Non-income dimensions
  12. 12. o Matching of specific performance area and related policy settings o OECD average set as benchmark o When countries lie below OECD average in both a performance and the related policy area (lower left quadrant) -> candidate for priority 12 Going for Growth: algorithmic stage to identify policy priorities -2 -1 0 1 2 3 -3 -2 -1 0 1 2 3 OECD average OECD average Performance gap (standard deviation) Gap in policy (standard deviation) Performance & policy below average
  13. 13. Policies (e.g. childcare) Desks' expertise (qualitative assessment of country-specific circumstances) Quantitative assessment (performance-policy matching algorithm) Employment Productivity Inclusiveness Outcomes (e.g. aggregate employment) Policies (e.g. labour tax w edge) Outcomes (e.g. total factor productivity) Policies (e.g. administrative burdens) Outcomes (e.g. gender gaps) 5 priorities New priorities: The extended framework
  14. 14. 14 Outcome of the two-step process: Reform recommendations for many specific policies Source: Going for Growth 2017
  15. 15. • Skills: Preparing young people for labour market of the future while improving gender balance • Firms: Promoting business dynamism and diffusion of technology and knowledge • Jobs: Helping workers to cope with the rapid turnover of firms and jobs Going for Growth 2017 recommendations span three key priorities
  16. 16. 16 Key reform priorities: Skills Source: Going for Growth 2017 Preparing youth for labour market of the future while improving gender balance Recommendation Countries with a priority Allocate resources in education more equitably BEL CRI CZE DEU DNK FRA HUN ISL ISR LVA NZL POL PRT SVK SWE USA Expand and improve vocational training ARG BRA CHN CRI DNK ESP EST FRA GBR GRC IND ISR LUX POL PRT TUR ZAF and education Improve access to childcare ARG AUS AUT CHE CHL COL CRI CZE DEU EST JPN KOR LTU LUX MEX NZL POL SVK TUR USAand early childhood education
  17. 17. 17 Key reform priorities: Firms Source: Going for Growth 2017 Promoting business dynamism and diffusion of technology and knowledge Recommendation Countries with a priority Boost return on innovation by enhancing R&D collaboration between universities and firms AUS CHL COL CRI EST IRL ISL ITA LUX PRT SVN Improve efficiency of business services by reducing regulatory barriers to entry in professional services AUT BEL CAN DEU ESP FRA IRL LVA LUX MEX PRT SVN Help innovative firms to reach new markets by addressing infrastructure bottlenecks AUS ARG BRA COL CRI EST EU IDN IND ISR ITA LVA POL GBR USA Raise efficiency and equity of tax systems by broadening the tax base and reducing tax expenditures ARG AUS AUT CAN COL DEU ESP EST GRC ITA JPN NOR TUR
  18. 18. 18 Key reform priorities: Jobs Source: Going for Growth 2017 Recommendation Countries with a priority Facilitate firm entry by streamlining permits and licensing and cutting red tape AUS BEL CAN CHL CHN CRI GRC HUN IDN IND IRL ISR LVA POL SVN ZAF Boost job creation by reducing the tax wedge on low-skilled workers BEL DEU ESP EST HUN ITA LVA NLD POL TUR Help laid-off workers to find a new job by raising the scope and efficiency of active labour market policies ARG ESP EST GBR GRC ISR LVA LTU SVN USA ZAF Helping workers to cope with the rapid turnover of firms and jobs
  19. 19. Pro-growth reforms can go hand-in-hand with inclusiveness Per cent of 2017 priorities
  20. 20. Share of countries with joint priorities in areas with potentially strong synergies 20 Packaging of reforms is key to achieving inclusive growth Source: Going for Growth 2017
  21. 21. Effect of a 0.1% of GDP increase in ALMP spending on the re-employment probability – conditional on the regulatory barriers to entry 21 Job-search support will help workers coping with firm exit: And this is more effective when firm entry barriers are low Source: Andrews, D. and A. Saia (2017), “Coping with creative destruction: Reducing the cost of firm exit”, OECD Economics Department Working Paper No. 1353.
  22. 22. 22 But in the past, countries have often missed opportunities to benefit from policy synergies Reform progress made in the areas of Going for Growth recommendations 2015-16 Note: Reform progress based on responsiveness to Going for Growth recommendations by policy area. Little progress corresponds to a reform responsiveness rate of 0 to 20% and some progress for a responsiveness rate of more than 20%. Source: OECD Going for Growth 2017, forthcoming on March 17: www.oecd.org/eco/growth/goingforgrowth.htm. Little progress Some progress Little progress CHL, DEU, IDN BEL, ESP, LUX, ITA Some progress DNK, IND, JPN, POL, SVN, TUR AUT, FRA, FIN, KOR, LVA Labour market measures Product market measures
  23. 23. Thank you! http://oe.cd/gfg http://www.oecd.org/eco/goingforgrowth.htm Main contributors: Alain de Serres Nicolas Ruiz Alberto Gonzalez-Pandiella Orsetta Causa Mikkel Hermansen Agnès Cavaciuti

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