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OECD Economic Surveys: Switzerland 2017

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Switzerland continues to provide its citizens with a high standard of living. The economy has shown considerable resilience, most recently to the exchange rate appreciation in 2015. Nevertheless, growth has been too slow to absorb spare capacity or raise income per capita meaningfully. Unconventional monetary policies have helped return inflation to positive territory, but pose other risks. Fiscal policy is sound, and the federal fiscal rule has helped lower public indebtedness but it implies that spending priorities must be funded from other areas. Labour productivity growth has been falling since the late-1990s to be one-third of the OECD average rate in the past decade. Swiss R&D and innovation are top-ranked but need to be more widespread. Frontier firms’ labour productivity has diverged from the rest. The Swiss education and training system is well regarded and has contributed to high employment rates. However, it is being increasingly challenged by the ever-growing demand for high-skilled workers along with the changing nature of work. Maintaining and raising living standards will require policies to restore productivity growth and ensure that the skills training and lifelong learning system is nimble.

SPECIAL FEATURES: BOOSTING PRODUCTIVITY; MEETING SKILLS NEEDS

 

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Ensuring a dynamic skills-training and life-long learning system

Switzerland makes more use of its human resources than most other OECD countries. Labour force participation is high and the unemployment rate low for most segments of society. This ensures a high standard of living for most Swiss people. Nevertheless, productivity growth is relatively slow. While this may in part be attributable to already being an advanced economy, it also means that Switzerland cannot be complacent with regard to education and skills. Its admirably low youth joblessness suggests that the transition from education to work is functioning soundly. However, there is mounting evidence that as the structure of industry is changing, due to globalisation and digitalisation for instance, vacancies and skills mismatches are spreading. The mix of skills being taught differs from those taught in most other high-income OECD countries in which a common secondary school track predominates and the emphasis is on equipping young adults with academic tertiary qualifications. In this context, it is important that the system is flexible enough to respond to shifts in the demand for skills and that workers continue to learn. While the participation of women and immigrants in the economy compares relatively well, more can still be done to improve equity in the accumulation of skills.

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