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OECD Employment Outlook 2018

image of OECD Employment Outlook 2018

The 2018 edition of the OECD Employment Outlook reviews labour market trends and prospects in OECD countries. Chapter 1 presents recent labour market developments. Wage growth remains sluggish due to low inflation expectations, weak productivity growth and adverse trends in low-pay jobs. Chapter 2 looks at the decline of the labour share and shows that this is partially related to the emergence of "superstar" firms, which invest massively in capital-intensive technologies. Chapter 3 investigates the role of collective bargaining institutions for labour market performance. Systems that co-ordinate wages across sectors are associated with better employment outcomes, but firm-level adjustments of sector-level agreements are sometimes required to avoid adverse effects on productivity. Chapter 4 examines the role of policy to facilitate the transition towards new jobs of workers who were dismissed for economic reasons, underlying the need of early interventions in the unemployment spell. Chapter 5 analyses jobseekers' access to unemployment benefits and shows that most jobseekers do not receive unemployment benefits and coverage has often been falling since the Great Recession. Chapter 6 investigates the reason why the gender gap in labour income increases over the working life, stressing the role of the lower professional mobility of women around childbirth.

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Labour share developments over the past two decades: The role of technological progress, globalisation and “winner‑takes‑most” dynamics

Over the past two decades, real median wage growth in many OECD countries has decoupled from labour productivity growth, partly reflecting declines in labour income shares. This chapter analyses the drivers of aggregate labour share developments using a combination of industry‑ and firm‑level data. Technological change in the investment goods‑producing sector and greater global value chain participation have compressed labour shares, but the effect of technological change has been significantly less pronounced for high‑skilled workers. Countries with falling labour shares have witnessed both a decline at the technological frontier and reallocation of market shares toward “superstar” firms with low labour shares (“winner‑takes‑most” dynamics). The decline at the technological frontier mainly reflects the entry of capital‑intensive firms with low labour shares into the frontier rather than a decline of labour shares in incumbent frontier firms, suggesting that thus far this process is mainly explained by technological dynamism rather than anti‑competitive forces.

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