Social Implications of Policies Aimed at Raising Employment

Have efforts to tackle high unemployment along the lines recommended by the 1994 Jobs Strategy, compromised other social goals, even as they helped to raise employment rates? Consistent with such concerns, wage dispersion has tended to increase in countries where unemployment has come down. However, employment gains have an offsetting effect on the distribution of household incomes, since many of the added workers are from lower income households. Consequently, overall income inequality and relative poverty have increased in some of the countries where unemployment has fallen, but decreased in others. Similarly, reductions in unemployment have coincided with increased low-paid and temporary employment in some countries, but the reverse is true in others. What is clear is that a significant share of low-paid and temporary workers find it difficult to climb the job ladder and/or experience frequent spells out of work, even as others successfully move into stable and better paying jobs.