Structural and institutional strengths, a strong crisis response and a high level of digitalisation have helped the Netherlands to weather the COVID-19 crisis with so far limited economic damage compared to many OECD countries. Several long-standing challenges are set to affect the strength of the recovery and its long-term sustainability. Non-standard employment is high, driven to a large extent by lower labour costs for the self-employed and other non-standard workers than for regular employees. Women are overrepresented among non-standard workers and typically work shorter hours. Households’ balance sheets, inflated by tax-subsidised housing debt and mandatory pension savings, create macroeconomic vulnerabilities and underpin inequality of assets. Landmark court rulings limiting nitrogen and greenhouse gas emissions are set to speed up a necessary green transition and led to earlier than planned closures of polluting economic activities, but have slowed down investments in infrastructure, buildings and agriculture. Embracing digitalisation is key to raise living standards further, but the social costs of skill-biased structural change, in many cases accelerated by COVID-19, must be handled firmly, notably by boosting skills and ensuring equal access to social protection.

This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of the Netherlands were reviewed by the Committee on 19 April 2021. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on 27 May 2021.The Secretariat’s draft report was prepared for the Committee by Jon Pareliussen, Daniela Glocker and Martin Borowiecki under the supervision of Isabelle Joumard. Statistical research assistance was provided by Steven Cassimon and Eun Jung Kim, and editorial assistance by Karimatou Diallo.The previous Survey of the Netherlands was issued in July 2018.Information about the latest as well as previous Surveys and more information about how Surveys are prepared is available at http://www.oecd.org/eco/surveys.

The Dutch economy experienced a severe contraction in 2020, reversing six years of strong growth. The spring COVID-19 outbreak was brought under control while still allowing for most economic activity to continue subject to social distancing and hygiene measures. This led to a less pronounced contraction than in other countries (). Effective support policies and a high degree of digitalisation and teleworking already before the pandemic further dampened the blow. Resurgence of the virus in the autumn led to stricter measures but the economic downturn was limited as businesses and workers were able to adapt.

The Netherlands has weathered the economic shock from COVID-19 relatively well thanks to structural strengths and emergency policies put in place. Continued fiscal support is needed to support the recovery, but it should become more targeted to allow structural change. Policy reforms to the labour and housing markets and investments in the green and digital transitions can contribute to make the economic rebound stronger, fairer and more sustainable.

Slow productivity growth in the decade leading up to the COVID-19 pandemic raises concerns for future living standards. Digital technologies have the potential to boost productivity growth, but their uptake and efficient utilisation depend on a good business climate and access to complementary skills. The COVID-19 crisis has accelerated the digital transformation, but there is scope to further speed up the digital take-up among enterprises that currently lag behind. Encouraging enterprises to implement digital security standards, extending e-government services to businesses, enhancing public-private R&D partnerships, and improving access to equity finance would help the digital transformation and productivity. Skill shortages, notably a lack of ICT professionals, is a concern. More diverse and flexible higher education pathways and a stronger involvement of the private sector in the design of vocational and higher education programmes would boost the supply of skills in high demand on the labour market. Doing more to train job seekers and low-skilled workers, regardless of their employment contract, would be beneficial to productivity and help ensure that its benefits are widely shared.