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 2021 edition is devoted to navigating the COVID‑19 crisis and recovery. Chapter 1 focusses on the labour market impact of the crisis and its consequences for vulnerable groups. Chapter 2 provides a first assessment of the role of job retention schemes during the crisis. Chapter 3 analyses how active labour market policies have responded to the challenges posed by the crisis. Chapter 4 assesses the extent and consequences of domestic outsourcing for the labour market. Finally, Chapter 5 focusses on trends in working time, including teleworking, and its regulations.

It is 16 months since the outbreak of the COVID‑19 pandemic sparked a global health crisis without parallel in living memory. With vaccination rates speeding up in many countries, the future is starting to look brighter, but more for some and less for others. The economic and jobs crisis it unleashed is far from over. Uncertainties, including the spread of new variants of COVID‑19, loom on the horizon. The pandemic has cost lives and livelihoods.

The initial shock of the COVID‑19 crisis was felt across large swathes of the economy, as fear of contagion and strict restrictions on social proximity severely dampened economic activity in OECD countries. As people and governments have learnt how to live alongside the virus, behaviours have adapted and restrictions have become looser and more targeted. This has enabled many to return to work. But the deeply sectoral nature of the crisis and differences in the sheltering offered by various types of jobs have left some to shoulder the bulk of the burden in terms of job losses and reduced working time. Those in low-paying occupations, often with fixed-term contracts, holding a low level of education, and youth have been particularly affected by the ravages of the crisis; hours worked by these groups have fallen disproportionately, and joblessness has accounted for a larger share of the adjustment, while other groups were better able to adjust through working time reductions and telework. Firms are also restructuring in ways that are accelerating pre‑existing megatrends, such as automation and digitalisation. All this will have implications for the strength and extent of recovery.

The COVID‑19 pandemic led to a global health crisis with no parallel in living memory. The impact on the economy and societies around the world has been both deep and widespread. The initial shock hit large parts of the economy, as fear of contagion and severe restrictions on social proximity put economic activity on hold in many countries. As people and governments have learnt more about how to live alongside the virus, behaviours have been adapted and restrictions more targeted. This has enabled many to return to work, although others have continued to suffer. This chapter documents the unfolding impact of the COVID‑19 crisis on the labour market, as well as the challenges that are still emerging. The chapter highlights those groups who have borne the brunt of the crisis, suggesting where there may be a need for more profound and long-lasting support.

Job retention schemes have been the main instrument used in most OECD countries for stemming the labour market impact of the COVID‑19 crisis. This chapter provides a preliminary assessment of their impact during the crisis. It offers four key contributions: i) an institutional analysis of the main features of job retention schemes; ii) a statistical portrait of their use and determinants; iii) a discussion of their possible effects on job retention and job creation during the COVID‑19 crisis based on the available preliminary evidence; iv) a comprehensive discussion of the policy challenge of promoting job retention while supporting transitions to jobs in firms and sectors with better growth prospects. The main message is that well-designed job retention schemes can be an effective policy tool to help the labour market weather an economic downturn: they need to be timely, targeted and temporary to support workers and firms effectively while minimising unintended negative effects on job creation and growth.

Active labour market policies (ALMPs) will be vital in shaping the labour market recovery from the COVID‑19 crisis. Connecting people to jobs through effective training, assisting companies to retain and recruit staff, and providing comprehensive support to people with major employment obstacles, will help to ensure an equitable and efficient emergence from the crisis, avoiding labour market detachment of more vulnerable individuals. Many countries reacted swiftly in increasing funding for their public employment services (PES), training programmes, hiring subsidies and other measures to increase labour demand. PES have hired additional staff and expanded remote and digital accessibility to their services to ensure service continuity. This chapter draws on a cross-country survey of policy responses to the crisis to highlight areas of good practice and institutional features that facilitated the development of contingency plans and adjustment to the new environment.

An increasing share of workers in OECD countries are legally employed by one firm but in practice work for another. Cleaners, security guards and cafeteria staff are examples of occupations where workers often physically work on the premises of one firm, but their legal employer is a third-party support services firm. Such third-party employment relationships are often referred to as “domestic outsourcing” or “market-mediated work arrangements”. This chapter focuses on documenting the nature, trends in, as well as the consequences of, domestic outsourcing for productivity, employment and job quality, focusing especially on some low-wage occupations. The chapter provides examples of different forms of domestic outsourcing before measuring its prevalence across OECD countries. It then shows the potential impact of the COVID‑19 crisis. The chapter concludes by highlighting some of the implications of domestic outsourcing for job quality and inequality, and discusses some policy responses.

Working time is a crucial variable shaping the labour market and its adaptability to shocks. It can affect key labour market outcomes, such as workers’ well-being, productivity, wages and employment. Documenting how OECD countries regulate working time, and understanding how different regulatory settings shape working time outcomes is crucial for policy makers seeking to balance equity, efficiency and welfare considerations. This chapter offers a detailed review of regulations governing working hours, paid leave, and teleworking in OECD countries. It discusses the role of collective bargaining in negotiating working hours or working time arrangements, and how OECD countries have adapted their working time regulation during the COVID‑19 crisis. The chapter also provides an update on working time patterns and trends in time use across OECD countries and socio-demographic groups. It measures how differences across workers in working time outcomes have changed over time and driven inequalities in work-life balance.

The tables of the statistical annex show data for all 38 OECD countries including Costa Rica, which became a Member of the OECD on 25 May 2021. Data for Brazil, China, India, Indonesia, the Russian Federation (Russia) and South Africa are included in a number of tables.