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. This year’s chapters cover recent wage developments, drivers of the decline in the labour share, the impact of collective bargaining on labour market performance, policies to smooth the transition back into employment for workers who lost their job due to economic change, causes and consequences of recent trends in unemployment benefit coverage, and an investigation of the reasons why the gender gap in labour income increases over the working life.

For the first time since the onset of the global financial crisis in 2008, there are more people with a job in the OECD area than before the crisis. Unemployment rates are below, or close to, pre‑crisis levels in almost all countries. Job vacancies have reached record highs in the euro area, the United States and Australia. A growing number of them remain unfilled for many months as labour market conditions get tighter.

While the impact of the global financial crisis on job quality and inclusiveness persists, employment rates are historically high in most OECD countries and the average unemployment rate is back to its pre‑crisis level. In spite of this, nominal wage growth remains significantly lower than it was before the crisis for comparable levels of unemployment, and the downward shift in the Phillips curve – the relationship between unemployment and wage growth – has continued during the recovery. Low inflation expectations and the productivity slowdown, which accompanied the Great Recession and have not fully recovered yet, have both contributed to this shift. Low‑pay jobs have also been another important factor. In particular, there has been a significant worsening of the earnings of part‑time workers relative to that of full‑time workers associated with the rise of involuntary part‑time employment in a number of countries. Moreover, the comparatively low wages of workers who have recently experienced spells of unemployment, combined with still high unemployment rates in some countries, have pushed up the number of lower‑paid workers, thereby lowering average wage growth.

This chapter examines the evolution of labour market performance since the onset of the global financial crisis. OECD labour markets are back to pre‑crisis levels in terms of job quantity, with only few notable exceptions, while a more mixed picture emerges as regards job quality and inclusiveness. In spite of this, nominal wage growth remains remarkably lower than it was before the crisis for comparable levels of unemployment, and the shift of the relationship between unemployment and wage growth has continued during the recovery. The chapter investigates the factors accounting for the persistent wage growth slowdown. While low inflation expectations and productivity growth deceleration remain the main drivers of observed patterns, the dynamics of low‑pay jobs and the wages associated to them have also been key factors accounting for the overall decline in wage growth.

Over the past two decades, real median wage growth in many OECD countries has decoupled from labour productivity growth, partly reflecting declines in labour income shares. This chapter analyses the drivers of aggregate labour share developments using a combination of industry‑ and firm‑level data. Technological change in the investment goods‑producing sector and greater global value chain participation have compressed labour shares, but the effect of technological change has been significantly less pronounced for high‑skilled workers. Countries with falling labour shares have witnessed both a decline at the technological frontier and reallocation of market shares toward “superstar” firms with low labour shares (“winner‑takes‑most” dynamics). The decline at the technological frontier mainly reflects the entry of capital‑intensive firms with low labour shares into the frontier rather than a decline of labour shares in incumbent frontier firms, suggesting that thus far this process is mainly explained by technological dynamism rather than anti‑competitive forces.

This chapter assesses the role of collective bargaining for labour market performance in OECD countries. It builds on the detailed characterisation of collective bargaining systems and practices presented in the OECD Employment Outlook 2017. Using a rich mix of country‑, sector‑, firm‑ and worker‑level data, this chapter investigates the link of different collective bargaining settings with employment, wages, working conditions, wage inequality and productivity. It then discusses how broad‑based employee and employer organisations, administrative extensions, organised forms of decentralisation and wage co‑ordination may contribute to better balance inclusiveness and flexibility in the labour market.

This chapter analyses how best labour market programmes can reduce the costs borne by workers who lose their jobs due to business closings or other economic reasons (“displaced workers”). The chapter shows that a considerable number of workers are displaced every year and that many in this group – especially older workers in blue‑collar jobs – experience large earnings losses due to both long periods out of work and re‑employment at a lower wage. The chapter draws upon detailed case studies of policies to assist displaced workers in nine OECD countries and provides many examples of the effective use of active labour market policies and unemployment benefits to ensure that the labour market adjustment costs inherent to a dynamic economy are kept as low as possible and that these costs are not unfairly concentrated on the displaced workers who have the most limited job mobility.

This chapter discusses the scope of unemployment‑benefit systems, documents recent trends in the number of benefit recipients, and presents alternative measures of benefit coverage in comparative perspective. A decomposition analysis for selected countries seeks to identify key driving forces behind observed coverage trends, including labour‑market and demographic changes, as well as benefit policy reforms. In most countries, only a minority of jobseekers receive unemployment benefits and while benefit receipt has increased substantially during the early post‑crisis period, this has failed to arrest the longer‑term trend towards falling benefit coverage documented in earlier studies. Although composition effects account for a significant share of the recent decline of benefit coverage, some of it is a result of policy reforms that have reduced unemployment‑benefit generosity either in search of budgetary savings or in an effort to articulate job‑search incentives for the unemployed.

This chapter begins with an overview of women’s working lives – how they differ from men’s, and how those differences impact their labour income throughout the lifecycle. It then focuses on the reasons behind these different career pathways, pointing to key forks in women’s professional lives that could lead to career traps, and examining the specific roles played by professional mobility, childbirth and part‑time work. The chapter also provides a framework to help countries identify their country-specific sources of inequalities so as to meet the complex and multifaceted challenge of gender labour inequality. The chapter finally provides policy recommendations on how to address these country-specific sources of inequalities for further improvements of women’s position in labour markets.

The tables of the statistical annex show data for all 35 OECD countries. Data for Brazil, China, Colombia, Costa Rica, India, Indonesia, Lithuania, the Russian Federation and South Africa are included in a number of tables.