Table of Contents

  • The OECD Employment Outlook provides an annual assessment of key labour market developments and prospects in OECD member countries. Each edition also contains several chapters focusing on specific aspects of how labour markets function and the implications for policy in order to promote more and better jobs. The 2022 edition of the OECD Employment Outlook reviews the key labour market and social challenges for a more inclusive post-COVID‑19 recovery as well as the labour market risks brought about by Russia’s war of aggression against Ukraine. It also addresses a number of long-standing structural issues that have a key relevance for labour market inclusiveness, such as employer market power and its labour market consequences, the role of firms in wage inequality, and the effect of working time policies on well-being and economic outcomes.

  • German

    The OECD economies and labour markets have bounced back strongly from the COVID‑19 pandemic, but Russia’s unprovoked, unjustified, and illegal war of aggression against Ukraine is clouding the horizon. The war is first and foremost a human tragedy, causing the loss of innocent lives and the largest humanitarian refugee crisis since World War II. Several million Ukrainians – mostly women and children – have fled their country in search of refuge in other European countries and beyond. The conflict also risks sparking an economic and social crisis, adding significant uncertainty to the global outlook. The OECD has revised its GDP projections in June to 3.0% for 2022 (down from 4.5% in the December 2021 projections). Besides, sustained inflation is projected to erode real household incomes.

  • Spanish, Japanese, Italian, German

    The Russian invasion of Ukraine has generated a major humanitarian crisis and sent economic shockwaves across the globe. Several million Ukrainian people – mostly women and children – have fled their country in search of refuge in other European countries and beyond. The increase in commodity prices spurred by the conflict has added to the inflationary pressures generated by supply chain disruptions that have hit real incomes in recent times. The economic shock is undermining the strength of the recovery from the COVID‑19 crisis, although progress in labour markets continued in the first months of 2022. However, despite sustained employment growth, real household disposable incomes were already declining on a year-on-year basis in the last quarter of 2021, and in many countries that decline is estimated to have continued in the first months of 2022, due to wage growth not keeping pace with inflation.

  • Russia’s war of aggression against Ukraine has generated a humanitarian crisis affecting millions of people and has sent shockwaves through the world economy. This new crisis threatens the strength of the recovery from the COVID‑19 one, which had been more robust than initially expected. Nevertheless, even before the shock of the war, the labour market recovery appeared uneven across countries and groups of workers. While some of the initial very unequal impact of the crisis has been reabsorbed, young people and workers without tertiary education lag behind in the recovery in many countries. Despite an unprecedented surge in labour demand, nominal wage growth was dwarfed by the high inflation of the first half of 2022. The impact of inflation on living standards is larger for the same lower-income households which have already borne the brunt of the COVID‑19 crisis.

  • Countries’ labour market and social policy response to the COVID‑19 crisis was fast, decisive and helped to avoid an economic and social meltdown. Two and a half years after the onset of the COVID‑19 pandemic, this chapter takes stock of the crisis measures still in place, with a focus on the policy areas where action has been particularly important: job retention schemes; unemployment benefits; paid sick leave; active labour market policies; and specific policies for women, young people, frontline workers and racial/ethnic minorities. It also presents an overview of countries’ labour market and social policy challenges and priorities for 2022, including those due to the economic fallout from Russia’s unprovoked war of aggression against Ukraine.

  • There is evidence that monopsony power is pervasive and substantial in OECD economies. Monopsony is the situation that arises where firms have the power to set wages unilaterally, leading to inefficiently low levels of employment and wages. This chapter reviews the causes, incidence, consequences and policy responses to labour market monopsony, focusing especially on labour market concentration, which is a key determinant of monopsony because in concentrated markets, few firms offer employment opportunities for workers. Using a harmonised dataset of online job vacancies, the chapter provides the largest cross-country comparison of the incidence of labour market concentration to date. It also presents original estimates of the consequences of labour market concentration on job quality using employer-employee data. The chapter concludes by reviewing the policy responses available to address monopsony and help labour markets function closer to the competitive ideal.

  • Around one‑third of overall wage inequality can be explained by differences in wage‑setting practices between firms rather than differences in the level and returns to workers’ qualifications. Gaps in firm pay, in turn, reflect differences in productivity, but also disparities in wage‑setting power. To tackle rising income inequality, worker-centred policies (e.g. education, adult learning) need to be complemented with firm-oriented policies. This involves, notably: (1) policies that promote the productivity catch-up of lagging firms, which would not only raise aggregate productivity and wages but also reduce wage inequality; (2) policies that promote job mobility, which would reduce wage inequality at a given level of productivity dispersion while enhancing the allocation of jobs across firms; and (3) policies that curtail the wage‑setting power of firms with dominant positions in local labour markets, which would raise wages and reduce wage inequality without adverse effects on employment and output.

  • Working time is both a key element of workers’ lives and a production factor. Understanding how working time policy relates to well-being and economic outcomes is thus crucial to design measures balancing welfare and efficiency concerns. Evidence so far has largely focused on the use of maximum hours’ regulation to prevent detrimental effects on workers’ health, and the effect of normal hours reductions on employment levels. This chapter brings two new perspectives: first, it accounts for the fact that workers’ well-being is an increasingly central societal objective of working time policies, and therefore considers well-being effects alongside productivity and employment effects. Second, it accounts for the use of flexible hours and the development of teleworking in the aftermath of the COVID‑19 crisis and considers their impact on well-being, productivity and employment. Building on these analyses, the chapter discusses the potential of various working time policies to enhance non-material aspects of workers’ well-being such as health, work-life balance and life satisfaction while preserving employment or productivity.

  • The tables of the statistical annex show data for all 38 OECD countries where available. Data for Argentina, Brazil, China, India, Indonesia and South Africa are compiled and included in a number of tables and in the Employment database (http://www.oecd.org/employment/database).