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Luxembourg’s large foreign-born population is a pillar of the country’s prosperity: they have brought skills and knowledge to many sectors of the economy. They also tend to successfully find jobs, with a higher employment rate than natives. However, not all immigrants have done well. The minority from non-EU origin (about 10% of the country’s population) suffers from high unemployment, large gender gaps in activity and below-average incomes. Refugees are particularly vulnerable. Other integration shortcomings go beyond disadvantaged minorities. Pervasive labour market segmentation is well illustrated by the marked under-representation of the foreign-born in public sector jobs. Political participation of immigrants at local level is modest. At school, their children are often put at a disadvantage by an education system which tends to perpetuate socio-economic inequality.
The diversity of Luxembourg’s society contributed by immigrants should be seen as an asset for economic growth and well-being. Initiatives such as the diversity charter can help private and public organisations to reap the benefit of diversity through the inclusion of outsiders and the strengthening of social cohesion. Learning the languages of Luxembourg, developing social capital and having foreign qualifications validated are key preconditions for successful integration. Education requires both general equity-enhancing reforms, starting at early childhood, and targeted support to disadvantaged students, including upgraded vocational studies. Furthermore, job matching and social cohesion would benefit from greater immigrant participation in public sector employment and civic life. Avoiding that asylum seekers undergo protracted inactivity is also a concern.
This Working Paper relates to the 2017 OECD Economic Survey of Luxembourg (www.oecd.org/eco/surveys/economic-survey-luxembourg.htm).

Digitalisation, automation and future technological changes are changing the world of work, affecting the skills needed to perform them. The future of jobs will not look like the present situation: increasingly, workers will have to adapt to fast technological change, accept more mobility during their career, and regularly upgrade their skills to remain employable. Luxembourg’s workforce is highly skilled, reflecting the concentration in the country of sophisticated firms in the financial sector and other top-end international services. However, some middle- skilled routine jobs – especially back office, custodian and legal services in the financial sector – may disappear as a result of automation. Workers with strong and adaptable skills will be well prepared to thrive in this new environment. While many individuals working in Luxembourg already possess such characteristics, many others do not, resulting in a relatively high level of skills mismatch. Further improvements in the education system are needed to address this challenge, provide the young with learning-to-learn as well as technical capabilities and avoid that large groups of people are left behind. As skill sets will need to be updated during working careers, the system of initial education must be complemented by a flexible system of lifelong learning, tailored to the special needs of individuals with limited education attainment and older workers.
Better use of existing skills would entail reorienting labour market policies from supporting job creation towards high-quality training programmes with substantial on-the-job learning component and reflecting future labour market needs. The tax and benefit system needs to be adjusted to increase incentives to work for low-skilled youth, older workers and second earners. Fully individualised taxation would increase incentives to work of second earners and make the tax system more gender neutral, while an additional parental leave entitlement for fathers may result in more gender-balanced use of part-time work.
This Working Paper relates to the 2017 OECD Economic Survey of Luxembourg (www.oecd.org/eco/surveys/economic-survey-luxembourg.htm).

As with other policies offering lower prices to at least some buyers, loyalty and fidelity discounts are generally pro-competitive and beneficial to consumers even though they may harm certain competitors. Potential problems exist, however, when such discounts are employed in ways that reduce price transparency, exclude or restrict a significant number of actual or potential competitors, or raise the probability of anticompetitive co-ordination.
The sometimes complex pro- and anti-competitive effects of loyalty and fidelity discounts are explored in the executive summary, background paper and summary of discussion pertaining to a June 2002 OECD Competition Committee roundtable discussion of the topic. While these documents reveal some interesting policy differences among various members of the Competition Committee, they also point to general agreement that loyalty and fidelity discounts are more likely to raise competition concerns when practised by firms enjoying substantial market power.

Lowering high levels of unemployment and inequality are amongst the largest challenges facing South Africa. More entrepreneurs and thriving small businesses would contribute to inclusive growth. Measures of entrepreneurial activity are lower in South Africa than in other emerging economies. Barriers to entrepreneurship include bureaucratic procedures and licensing, which are also an ongoing burden on small firms. Public procurement is being used to overcome the dominance of large incumbents, but so far its net effect on small firms is not clear. An education system that better equipped students with basic skills as well as entrepreneurial skills would grow the pipeline of entrepreneurs. New forms of financing are slowly emerging in a system that is dominated by banks. A better evidence base is crucial for more effective financial and non-financial support programmes to boost start-up rates and small firms’ growth.

This paper discusses the main barriers and possible solutions to the decarbonisation of steel and cement industries. First, the paper details the economic, regulatory, technological and political economy barriers that impede a low carbon transition. Then, it addresses the role of material efficiency and enhanced recycling in greening these industries, and reviews the emerging and near commercial low- and zero- emissions production technologies. Finally, the policy packages that could contribute to trigger demand and supply decarbonisation of steel and cement are discussed.

In New Zealand, the funding of higher education research has been influenced by revised policy-driven imperatives. Amidst the institutional reactions to new criteria for governmental funding, individual academics are being asked to increase their productivity in order for their employing institution to access public funding. For this to occur, these three stakeholders need to have a reasonable understanding of one another’s core research objectives and align, as best possible, the strategies they employ to achieve them. This alignment of effort is not without challenges: it may, for example, result in ambivalence as staff resort to behaviours that contest institutional powers over their changing roles and responsibilities. In order to address these challenges, there needs to be further reflection on how the efforts of all parties can be better aligned and collaboratively integrated.

Greening the economy entails jobs contracting in “high-polluting” economic activities and expanding in environment-friendly activities. Minimizing the corresponding transition costs is crucial to accelerate decarbonisation and reduce displacement costs for affected workers. Using individual-level labour force data for a large sample of European countries, this paper finds that the shares of green and high-polluting jobs remained approximately stable between 2009 and 2019, hinting at a slow or yet-to-come green transition in labour markets. Green and high-polluting jobs are unequally distributed across socioeconomic groups: women are under-represented in both green and high-polluting jobs, while green jobs are associated with higher educational attainment, and high-polluting jobs with lower educational attainment. Equally important from a policy perspective, the results show that high-polluting jobs are concentrated in rural areas. These results are confirmed by analyzing labour market transitions: for instance, while women are more likely to transition from study to job, they are significantly less likely to get a green job. Overall, the results suggest that well designed and targeted policies are needed to support efficient and inclusive labour market transitions in the greening economy: to minimize scarring effects for displaced workers, help individuals’ upskilling and reskilling, and support the matching between workers and jobs in higher demand.

Loss carryover provisions are an essential part of corporate tax systems. Economic theory suggests that perfect intertemporal loss offsets are a necessary condition for the neutrality of corporate taxation across investment projects with different risk profiles. However, in practice the tax treatment of losses does often not reach this standard, e.g., due to lack of inflation indexation or tax offset restrictions. Using detailed country-level information, this paper presents two tax policy indices capturing the effects of carryover provisions on tax symmetry and stabilisation across a total of 34 OECD and non-OECD countries. The tax symmetry index captures the effectiveness of carryover provisions, including carry-forwards and carry-backs, relative to full symmetry, while the stabilisation index captures the proportion of an adverse revenue shock on loss-making firms which is absorbed by the corporate tax system. The results show that only 18 countries provide unlimited carry-forwards and most countries do not index tax losses to inflation; only 9 countries provide carry-backs while 8 countries limit the amount of tax losses which can be offset in any given year. Cross-country comparison of the two indices suggests that these restrictions have significant impacts on tax symmetry and stabilisation. Perfect tax symmetry is not achieved by the majority of the included corporate tax systems thus implying possible tax-induced distortions towards less risky projects.