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2019 OECD Economic Surveys: Colombia 2019

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Colombia has made good economic and social progress over the last two decades. Macroeconomic policies are solid and have sustained growth and smooth adjustments to shocks over the years. Maintaining and strengthening the policy framework is key to sustainable macroeconomic policies and setting the basis for higher productivity and inclusiveness. Putting Colombia on a path to stronger and more inclusive growth, and reducing dependence on natural resources, requires boosting productivity by adopting structural reforms in competition, regulations, trade policy, infrastructure, innovation, and skills. Reducing informality and boosting job-quality would extend the benefits of growth to all Colombians, underpinning economic and political support for reform.

SPECIAL FEATURES: BOOSTING EXPORTS AND INTEGRATION INTO THE WORLD ECONOMY; FOSTERING HIGH-QUALITY JOBS FOR ALL

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Fostering high-quality jobs for all in Colombia

Colombia has achieved important social and economic improvements in recent years. Employment grew at an average annual rate of 3% between 2008 and 2018. Thanks to Government efforts to fight against informality, the informal employment rate decreased substantially in the last decade. However, many jobs are still of relatively low quality, affecting well-being and productivity. More than half of employment is informal and many vulnerable groups, notably youth, ethnic minorities and women are out-of-work. A high share of the population lacks basic skills and the mismatch between the supply and demand of skills is widespread. Overcoming these challenges will require actions in several policy areas as indicated by the implementation of the OECD Jobs Strategy for Colombia developed in this chapter. Effective actions include lowering the costs of formalisation for workers and firms, enhancing enforcement, better training and labour intermediation, and a better functioning unemployment benefit system. Greater efforts to make the education and training system more responsive to labour market needs by improving relevance would help. In particular, enhancing an apprenticeship system linked to formal education and encouraging more work-based learning would improve quality employment opportunities. Better skills assessment and anticipation information as well as greater efforts to involve employers in the education and training system would also help. Policies to boost female employment, such as expanding opening hours of childcare centres and continued efforts towards a universal early education, are also needed to reduce gender gaps. Reforms to boost export performance and enhance productivity can help to support business growth and employment and lay the foundations for more and better quality jobs (Chapter 1). All these policies can create a virtuous cycle between labour productivity and equity, increasing access to higher quality jobs, higher wages, and coverage of pensions, training and unemployment benefits.

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