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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.

English

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Coping with labour shortages

How to bring outsiders back to the labour market?

The Dutch labour market is functioning well, with employment and labour participation rates above OECD averages. Nevertheless, there are sizable pockets of under-activity, including social benefit recipients representing 17% of the workingage population, which could be mobilised in order to address short-run labour shortages and the long-run ageing-related reductions in the labour supply. Reintegrating these benefit recipients would also help to reduce spending on labour market programmes, which is among the highest in the OECD. Policies should continue to tackle the high inactivity of these groups. For people on social assistance and older workers, job search requirements should be strengthened and the authorities should continue making the tax-benefit system more work-friendly. For women with low-earning capacities, existing work disincentives should be eliminated. For (partially) disabled people, it is important to envisage labour market re-integration at an early stage. For the long-term unemployed, policies should be further strengthened by adjusting the unemployment benefit and the employment protection systems, as well as further improving current profiling and training measures.

English

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