This edition of the Employment Outlook is released in the midst of a global health emergency that is turning into an economic and social crisis that evokes the Great Depression. The epidemiological model developed by the OECD shows that the severe restrictions to social and economic life that most OECD countries (and many others) have had to take to slow the spread of the virus have prevented the collapse of health care systems and helped to avoid hundreds of thousands, if not millions, of deaths. Yet, there is no question that these measures have had very serious economic and social consequences. Entire sectors of the economy were essentially closed down for weeks on end. Between the last quarter of 2019 and the second quarter of 2020, OECD-wide GDP is projected to have fallen by almost 15%. In the first three months of the COVID‑19 crisis, in OECD countries for which data are available, hours worked fell ten times more than in the first three months of the 2008‑09 global financial crisis.

What took more than a decade to achieve has unravelled within a matter of months. In early 2020 the employment rate in the OECD reached a record-high of 68.9%, 2.6 percentage points above the previous record just before the global financial and economic crisis of 2008. Then the pandemic struck. Within months, COVID‑19 spread around the globe triggering the worst public health emergency in a century. It has sparked an economic crisis not seen since the Great Depression of the 1930s. More than 10 million people have been infected with the virus, more than half a million people have died and trillions of dollars have been pumped into the world economy to protect lives and livelihoods. In the face of this challenge, a four Rs strategy, which progresses from response and rehabilitation to reciprocity and resilience, is needed to re-build a better, more robust, and inclusive labour market.

The most serious pandemic in a century has triggered one of the worst economic crises since the Great Depression. Countries reacted with often strict containment and mitigation policies, which effectively limited the spread of the virus and avoided the collapse of health care systems and most importantly limited the number of fatalities. The combination of great uncertainty, fear of infection, individual restraints following public guidelines and mandatory lockdowns, however, immediately produced a sharp contraction in economic activity. In the first months of the crisis, new unemployment claims have soared in many countries and projections suggest that in the OECD area the unemployment rate will be much higher than at the peak of the global financial crisis. But the extent of the shock on the labour market is much larger: despite a massive shift towards telework, in all countries the number of those effectively working collapsed as companies have frozen hiring and put part of their workforce on hold through subsidised job-retention schemes. Available evidence also suggests that vulnerable groups – the low skilled, youth and migrants – as well as women are paying the heaviest toll of the crisis.

The COVID‑19 outbreak and its rapid diffusion across the globe have turned into the worst public health crisis in living memory. The pandemic forced countries to impose strict containment and mitigation policies and severely affected social and economic activities, driving the global economy to a major recession. Most countries responded quickly and put in place, from the very first stages of the crisis, an unprecedented package of labour market and social policies aiming at reducing the economic shock and supporting workers, their families and companies. This chapter provides a first assessment of the initial labour market impact of the COVID‑19 crisis and a review of countries’ wide set of policy responses. It also provides some reflections on how countries could adapt the measures taken in the first months of the crisis as they start softening mitigation policies.

This chapter provides an in-depth discussion of the income security and work incentives provided by unemployment benefits to jobseekers with previous periods of part-time and unstable dependent employment. It sheds light on the accessibility and adequacy of this key social protection tool, and on the work incentives affecting different types of workers, two key factors for its design and implementation. In particular, the chapter compares entitlements to unemployment benefits for workers with a range of typical employment trajectories, including alternating spells of dependent employment and unemployment. Issues, such as the extension of out‑of‑work support to individuals in “part-time” or “partial” unemployment, options for accumulating entitlement rights across different spells of employment, saving “unused” benefit entitlements for future out‑of‑work spells, and strategies for integrating in-work and out-of-work support, are all assessed.

Dismissal and hiring regulations – or employment protection legislation in short – are an important determinant of worker security and firm adaptability. This chapter provides an up-to-date review of employment protection legislation in OECD countries, building on earlier work by the OECD in the area. Taking into account legislation and actual practices, it describes the regulation of individual and collective dismissals of workers on regular contracts and the regulation for hiring workers on temporary contracts. It also discusses recent reforms in employment protection legislation. The comparison of employment protection across countries in this chapter brings evidence to the policy debate on the relative importance that different systems attach to the twin aspirations of protecting workers and promoting adaptable labour markets.

Driven by mega trends such as automation, ageing and globalisation, the share of middle-skilled jobs has been declining in the majority of OECD labour markets (a process also referred to as job polarisation). Middle-skill jobs are defined as occupations in the middle of the occupation-wage distribution. One little explored question is what is happening to the workers who have traditionally occupied these jobs? This chapter starts by examining whether the fall in the share of middle-skill employment is explained primarily by attrition or transitions. Attrition accounts for fewer younger workers entering these jobs compared to older workers retiring. Transitions explain changes in career patterns after a person has started working. The chapter then studies the characteristics of what would have been a “typical” middle-skill worker and uses this profile to examine how the jobs they hold have changed over time.

This chapter looks at current labour market outcomes of young graduates from mid-level vocational education and training (VET), as well as how they have changed in the past 10 to 15 years and what can be expected in the medium-term. It looks at indicators of job quality and quantity, and zooms in on the types of occupations that employ VET graduates. The outcomes of VET graduates are compared to those of general education graduates (at the same qualification level), tertiary education graduates and graduates without an upper‑secondary education degree. Differences in outcomes based on the features of each country’s VET system are discussed. Finally, based on these findings, the chapter discusses key policy directions to improve VET graduates’ access to high-quality secure jobs.

The tables of the statistical annex show data for all 37 OECD countries including Colombia, which became a Member of the OECD on 28 April 2020. Data for Brazil, China, Costa Rica, India, Indonesia, the Russian Federation and South Africa are included in a number of tables.