Download to read offline
Uploaded byRockwool Fonden
Recent labour market developments and reforms in OECD countries
The document discusses recent labor market developments and reforms in OECD countries, specifically focusing on job quantity, quality, and inclusiveness. While employment levels in Denmark have returned to pre-crisis levels, unemployment remains high due to increased labor participation, and disparities exist between native-born and foreign-born workers. The document emphasizes the need for effective labor market policies to promote inclusivity and job quality amidst ongoing challenges like income inequality and labor market insecurity.
More Related Content
Similar to Recent labour market developments and reforms in OECD countries
Recent labour market developments and reforms in OECD countries
- 1. RECENT LABOUR MARKET DEVELOPMENTSAND REFORMS IN OECD COUNTRIES The Rockwool Foundation Conference February 2018 Stefano Scarpetta Director Directorate for Employment, Labour and Social Affairs OECD
- 2. The new JobsStrategy framework Objective Dimensions of labour market performance Policies Enhance inclusive growth and well-being More & better jobs Labour market inclusiveness Resilience & adaptability Labour market policies and institutions, and other structural & macroeconomic policies
- 3. OECD and DNKemployment back to pre-crisis levels But DNK unemployment is still above (due to greater labour force participation). 3 Job Quantity ISL CHE SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS ESTCZE AUT USAFIN LVAISR HUN KOR SVNLUX PRT SVK IRLFRA POL BEL CHL MEX ESP ITA GRC TUR 40 45 50 55 60 65 70 75 80 85 90 40 45 50 55 60 65 70 75 80 85 90 2016 2006 A. Employment Share of working-age population (15-64 years) in employment (%) ISL CHE SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN LVA ISRHUN KOR SVN LUX PRT SVK IRL FRA POL BEL CHL MEX ITA TUR 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 2016 2006 B. Unemployment Share of persons in the labour force (15-64 years) in ESP GRC 15 20 25 0 5 10 15 20 25 ISL CHE SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN LVA HUNSVN LUX PRT SVK IRL FRA POLBEL ESP ITA GRC 10 15 20 25 30 35 40 45 10 15 20 25 30 35 40 45 2016 2006 C. Broad labour underutilisation Share of inactive, unemployed or involuntary part-timers (15-64) in population (%), excluding youth (15-29) in education and not in employment TUR 40 60 40 50 60
- 4. 4 Job Quality ISL CHE SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN ISR HUN KOR LUX PRT SVK IRL FRA POL BEL CHL MEX ESP ITA GRC TUR 0 5 10 15 20 25 30 35 0 510 15 20 25 30 35 2013 2006 A. Earnings quality Gross hourly earnings in USD adjusted for inequality ISL CHE SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN ISR HUN KOR SVN LUX PRT SVK IRL FRA POL BEL CHL MEX ITA TUR 0 2 4 6 8 10 12 0 2 4 6 8 10 12 2013 2006 B. Labour market insecurity Expected monetary loss associated with becoming and staying unemployed as a share of previous earnings (%) SWE NZL DNK NLD NOR GBR AUS EST AUTUSA FIN LVA ISR LUX IRL FRA POL BEL MEX ITA 10 15 20 25 30 35 40 45 10 15 20 25 30 35 40 45 2016 2006 C. Quality of working environment Share of workers experiencing job strain (%) Earnings quality has not improved in the past decade Higher labour market insecurity but lower job strain (also in DNK)
- 5. 5 Inclusiveness ISL SWE NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN LVA ISR HUN KOR SVN LUX PRT SVK IRL FRA POLBEL CHLMEX ESP ITA GRC TUR 0 2 4 6 8 10 12 14 16 18 20 0 2 46 8 10 12 14 16 18 20 2015 2006 A. Low-income rate Share of working-age population (18-64 years) with equivalent household disposable income below 50% of the median income (%) ISL SWE DNK NLD DEUNOR JPN GBR AUS EST CZE AUT USA FIN HUN KOR SVN LUX SVK IRL FRAPOL BEL 0 10 20 30 40 50 60 70 0 10 20 30 40 50 60 70 2014 2006 B. Gender labour income gap Difference between average annual earnings of men and women divided by average earnings of men (%) NZL DNK NLD DEU NOR JPN GBR CAN AUS EST CZE AUT USA FIN LVA HUN KOR SVN LUX PRT SVK IRL FRA POL BEL CHL MEX ESP ITA GRC 15 20 25 30 35 40 15 20 25 30 35 40 2016 2006 C. Employment gap for disadvantaged groups Average employment gap as a percentage of the benchmark group (prime-age male workers) Income inequality has increased almost evrywhere But labour markets have become more inclusive in other dirmnsions
- 6. 6 But the gapbetween foreign-born and native-born is huge in Denmark -15 -10 -5 0 5 10 15 -15 -10 -5 0 5 10 15 Gap in employment ratesGap in employment rates Gap in employment rates between foreign-born and native-born, 2014 Percentages points Source: OECD Economic Surveys: Denmark 2016.
- 7. 7 And this appliesalso to the second generation Difference in employment rates of native-born with foreign parents and native- born with native parents, 15-34 year olds not in education (2013) -30 -25 -20 -15 -10 -5 0 5 -30 -25 -20 -15 -10 -5 0 5 BEL DNK AUT NLD ESP FRA DEU SWE EU GBR LUX CHE USA CAN AUS % points% points Source: OECD Economic Surveys: Denmark 2016.
- 8. 8 Danish immigrants aremostly low-skilled Low-skilled employment share among foreign-born and native-born men, 2012-13 Source: OECD Economic Surveys: Denmark 2016. 0 2 4 6 8 10 12 14 16 18 20 NOR SWE GBR OECD DNK Foreign-born Native-born Share of total employment
- 9. 9 Inequality between foreign-bornand native-born is high Source: OECD Economic Surveys: Denmark 2016. 0 5 10 15 20 25 30 USA OECD GBR SWE NOR DNK FIN % in the lowest decile % in the highest decile % Share of persons aged 16 and older living in an immigrant household in the lowest and highest deciles, 2012
- 10. 10 Income differences areparticularly large at the bottom of the distribution Source: OECD Economic Surveys: Denmark 2016. 0 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 18 000 DNK USA GBR OECD SWE FIN NOR Immigrant Native-born Lowest decile of the income distribution, EUR Annual equivalised disposable income of immigrant and native-born households, 2012
- 11. 11 And yet immigrantsare often over- qualified Source: OECD Economic Surveys: Denmark 2016. 0 5 10 15 20 25 OECD GBR FIN DNK SWE NOR % points Difference in over-qualification rates between foreign-born and native-born, 2012
- 12. 12 Persistently low productivitygrowth Source: OECD calculations based on quarterly national accounts. -8 -6 -4 -2 0 2 4 6 8 % Q1 2000-Q4 2007 Q4 2007-Q1 2009 Q1 2009-Q4 2012 Q4 2012-Q4 2016 Hourly labour productivity Real GDP divided by total hours worked
- 13. LABOUR MARKET REFORMSIN EUROPE IN THE PAST DECADE
- 14. 14 Falling pseudo-coverage of unemploymentbenefits, also in DNK 175 204 0 20 40 60 80 100 120 140 Insurance, 2014 Assistance, 2014 Total, 2007
- 15. 15 But coverage increasedin DNK among the unemployed between 2007 and 2014 2005 2007 2008 2010 2014 20% 25% 30% 35% 40% 45% 50% 30 35 40 45 50 55 overall coverage share of youth (%)
- 16. 16 But UB reformsthat occurred in DNK since 2010 are starting affecting coverage rates -50 0 50 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 chang ein covera ge, ppts Reason for entering unemployment Out-of-work duration Job-search activities Characteristic of the previous job Income/assets Years in the country Age Other observable factors Net compositional effect Total change -20 -16 -12 -8 -4 0 4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2016 changeincoverage,ppts
- 17. An unprecedented waveof EPL reforms in Europe since the onset of the crisis 17 OECD EPL index for individual dismissals Preliminary estimates for post 2014 data 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Scale 0-6Scale 0-6 OECD average, 2013
- 18. 18 Short-term effects ofEPL reforms: hiring on open-ended contracts Immediate (+) impact on the share of permanent contracts Share of permanent contracts in new contracts, percentages 18 20 22 24 26 28 30 32 34 36 % Slovenia Reform: April 2013 5 6 7 8 9 10 11 12 % Spain Reform: February 2012
- 19. 19 Long run effectsof EPL reforms ** *** *** 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) Business sector effects of flexibility-enhancing EPL reforms Estimated effect of an average reform (reduction of 0.2 points of the EPLR indicator)
- 20. The reformin Estonia (2009) increased unemployment. 20 But reforms during the crisis might have temporarily worsened it 0 5 10 15 20 25 % Estonia Lithuania Latvia Lithuania as a suitable control group for Estonia (e.g. Malk, 2013) Same results when micro and macro controls included.
- 21. 21 More generally, inbad times, EPL reforms facilitate downsizing … Lower (no) costs if promoted during upturns Estimated cumulated change of business-sector employment up to 4 years since the reform, in percentage - 1.0 - 0.8 - 0.6 - 0.4 - 0.2 0.0 0.2 0.4 0.6 0.8 1.0 Before 0 1 2 3 4 Time since reform (years) A. Economic upturn - 1.7 - 1.5 - 1.3 - 1.1 - 0.9 - 0.7 - 0.5 - 0.3 - 0.1 0.1 0.3 Before 0 1 2 3 4 Time since reform (years) C. Economic downturn
- 22. 22 … but thisis not the case in dual labour markets Lower (no) costs in countries with dual labour markets. Estimated cumulative change of business-sector employment up to 4 years following the reform, in percentage - 0.8 - 0.6 - 0.4 - 0.2 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 Before 0 1 2 3 4 Time since reform (years) A. Incidence of fixed-term contracts 5 percentage points above the median - 2.2 - 2.0 - 1.8 - 1.6 - 1.4 - 1.2 - 1.0 - 0.8 - 0.6 - 0.4 - 0.2 0.0 0.2 Before 0 1 2 3 4 Time since reform (years) C. Incidence of fixed-term contracts 5 percentage points below the median
- 23. Reform packagescan be designed to attenuate, if not eliminate, short-term costs The choice of complementary policies crucially depends on: the stage of the business cycle, political-economy considerations, the country-specific labour market institutional framework fiscal space 23 POLICY OPTIONS
- 24. Smaller employmentcosts with an effective activation policy in place Especially if geared around early interventions (e.g. during notice) Scope for activation limited if effective programmes are not already in place (their implementation takes time) Grandfather clauses: reforming EPL while preserving workers’ accrued entitlements at the date of the reform: Evidence that GCs more than offset short-term costs But likely to delay the long-run efficiency effects of EPL reforms Sequencing of reforms: EPL reforms are less costly (in the short-run) if product markets are competitive 24 LABOUR MARKET POLICY OPTIONS
- 25. Collective bargaining:facilitating the firms adjustment on other margins than downsizing can limit short-term losses e.g. the case of the 2012 labour market reform in Spain 25 LABOUR MARKET POLICY OPTIONS *** ** 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 Overall End of contract Dismissal Other Predicted without the reform Observed Effect of the 2012 Spanish reform on quarterly separation rates
- 26. 26 Thank you Contact: Stefano.Scarpetta@oecd.org OECDDirectorate for Employment, Labour and Social Affairs, via www.oecd.org/els Follow us on Twitter, via @OECD_Social OECD Employment Outlook, via www.oecd.org/employment/outlook OECD Employment database, via www.oecd.org/employment/database