This 30th edition of the OECD Employment Outlook examines recent labour market trends and short-term prospects in OECD countries. It finds that the recovery from the recent economic and financial crisis has been slow and uneven. Unemployment remains unacceptably high in many countries and long-term unemployment has risen, increasing the risk of higher unemployment becoming entrenched. An analysis of how labour markets weather economic shocks shows that policies to lower structural unemployment also help to dampen the adverse effects of economic downturns on unemployment, earnings losses and earnings inequality. The report documents the decline in the labour share of national income that has been occurring in many OECD countries, primarily as a result of globalisation and technological change. Enhanced investment in education and better targeted tax and transfer programmes can help to ensure that the fruits of economic growth are more broadly shared. Finally, the impact of climate-change mitigation policies on the labour market is examined. Some sectors could experience large employment changes even if the impact on the overall level of employment may only be small. As for other structural shocks, policies should be put in place to facilitate labour market mobility.
- 10 July 2012
Waiting for the Recovery: OECD Labour Markets in the Wake of the Crisis
The economic recovery has been weak or uneven and some countries have fallen back into recession. This chapter examines the implications of the lack of a vigorous recovery for OECD labour markets. Its main findings are threefold. First, almost three years since the start of the economic recovery, economic growth has not been strong enough to make more than a small dent in the cyclical hike in OECD-wide unemployment. Second, there has been an increasing marginalisation of the jobless through an increase in the number of long-term unemployed and of discouraged workers leaving the labour force. Third, there is a growing risk that at least part of the cyclical increase in unemployment may become structural even if this has only materialised to a limited extent so far. From a policy perspective, the key priority is to underpin aggregate demand. This requires appropriate macroeconomic policies coupled with structural reforms that promote a prompt and solid recovery in output and job creation. Labour market policies also have a key role to play in helping unemployed job seekers get back into work and addressing structural obstacles that prevent them from finding jobs.