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2008 OECD Economic Surveys: Netherlands 2008

image of OECD Economic Surveys: Netherlands 2008

This 2007 Economic Survey looks at how, after a long stagnation during the first half of the decade, the Dutch economy has made a successful comeback. Living standards in the Netherlands are among the highest in the OECD, and over recent years growth has strengthened and unemployment has fallen.

This most recent survey focuses on labour utilisation, which has been the main source of growth in the past decade, but which is likely to slow sharply with the ageing of the Dutch population. Improving work incentives is therefore a key imperative. Although labour-market participation rates are high, there are several groups who continue to be less active.

This survey looks at the challenges threatening the prosperity of the Dutch economy, which include: addressing the effects of population ageing on the sustainability of the public finances; boosting the labour market involvement of under-participating groups; helping parents reconcile work and family responsibilities; and improving the immigration policy and the integration of migrants.

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Assessment and recommendations

After the stagnation in the first half of the decade, the Netherlands is once again in good shape. The pace of real GDP growth has strengthened since 2005, unemployment has fallen back to a low level and the fiscal position has been brought back into balance. Though the current recovery is partly cyclical, it is also built on an impressive underlying performance, which has helped to maintain income per capita among the highest in the OECD. While the Dutch economy displays a high level of productivity, the trend growth of productivity has been lower than in many other countries during the past decade, which may in part reflect the continued reliance on traditional industries. The government has taken measures to foster innovation, facilitate entrepreneurship and stimulate competition so as to spur productivity growth. These policy goals were discussed at length in the previous Economic Survey and are not addressed in detail here.

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