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OECD Employment Outlook 2022

Building Back More Inclusive Labour Markets

image of OECD Employment Outlook 2022

Two years into the pandemic, economic activity has recovered faster than expected. However, the labour market recovery is still uneven across sectors and is threatened by the economic fallout from Russia’s aggression against Ukraine, which has generated the fastest growing humanitarian crisis in Europe since World War II, sending shockwaves throughout the world economy. The 2022 edition of the OECD Employment Outlook reviews the key labour market and social challenges for a more inclusive post-COVID‑19 recovery. It also examines the policies to address these challenges and the outlook ahead. Particular attention is given to frontline workers and groups lagging behind in this recovery (young people, workers with less education, and racial/ethnic minorities). The Outlook also addresses a number of long-standing structural issues that have a key relevance for labour market inclusiveness, such as employer market power and its labour market consequences, the role of firms in wage inequality, and the effect of working time policies on well-being and economic outcomes.

English Also available in: French

Monopsony and concentration in the labour market

There is evidence that monopsony power is pervasive and substantial in OECD economies. Monopsony is the situation that arises where firms have the power to set wages unilaterally, leading to inefficiently low levels of employment and wages. This chapter reviews the causes, incidence, consequences and policy responses to labour market monopsony, focusing especially on labour market concentration, which is a key determinant of monopsony because in concentrated markets, few firms offer employment opportunities for workers. Using a harmonised dataset of online job vacancies, the chapter provides the largest cross-country comparison of the incidence of labour market concentration to date. It also presents original estimates of the consequences of labour market concentration on job quality using employer-employee data. The chapter concludes by reviewing the policy responses available to address monopsony and help labour markets function closer to the competitive ideal.

English Also available in: French

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