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Back to Work: New Zealand

Improving the Re-employment Prospects of Displaced Workers

image of Back to Work: New Zealand

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is part of a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that in New Zealand most displaced workers find a new job again, largely due to a strong economy and a highly flexible labour market. But many of them face large losses in terms of job quality and especially wages. And displaced workers facing difficulties in New Zealand are largely left on their own to find a new job, as the means-tested public benefit system only provides for people in need and employment services concentrate on helping people off benefit with limited focus on those not receiving a benefit.

Nine countries are participating in the review: Australia, Canada, Denmark, Finland, Japan,

Korea, New Zealand, Sweden and the United States.

Contents

Chapter 1. Job displacement in New Zealand and its consequences

Chapter 2 Easing the impact of economic restructuring on displaced workers in New Zealand

Chapter 3 Re-employment support for displaced workers in New Zealand who struggle to find a new job

English

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Foreword

OECD labour markets are dynamic. Each year, around 20% of jobs in a typical OECD country are created or destroyed, and around one-third of all workers are hired or separate from their employer. These large job and worker flows are driven by a continuous process of labour reallocation, both across industries and between declining and growing firms within the same industry. This process is an important source of productivity gains, since more productive firms expand at the expense of less productive firms and earnings rise on average for workers changing jobs, particularly workers who voluntarily quit one job in order to move to another. However, high job turnover is also a source of insecurity for workers, especially those who are displaced from their jobs because their employer downsizes its workforce or goes out of business altogether. A common challenge facing OECD governments is thus to nurture labour market dynamism while keeping the adjustment costs that are borne by displaced workers as low as possible.

English

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