OECD Employment Outlook 2014

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The 2014 edition of the OECD Employment Outlook reviews recent labour market trends and short-term prospects in OECD and key emerging economies. It zooms in on how the crisis has affected earnings, provides country comparisons of job quality, examines the causes and consequences of non-regular employment, and estimates the impact of qualifications and skills on labour market outcomes.
  • 1. Mark KeeseLaunch of theEmployment Outlook 2014Head of Employment Analysis and PolicyDirectorate for Employment, Labour and Social Affairs
  • 2. • Unemployment has started to decline, but further progress is requiredas the job recovery has not gone very fast yet.• People have borne considerable personal, economic and socialcosts that may prove to be long-lasting:– long-term unemployment remains persistently high,– many employees have experienced economic hardship.• Fixed term contracts are increasingly used for new hires, but theyare not an automatic stepping-stone to permanent work.• Not just more jobs but also better jobs are needed. The good news isthat there is little sign of a trade-off between job quantity and job qualityacross countries.• People should also be given the opportunity to acquire the rightskills to get a good job. It is not just educational attainment thatmatters.2The recovery is gaining momentum butthere is no time for complacency
  • 3. 3Unemployment has started to decline, but furtherprogress is required…14121086420Italy Euro area France OECD UnitedKingdomUnited States Canada Germany Japan%Unemployment ratePercentage of the labour forceCurrent value (Q4 2013) Start of the crisis (Q4 2007)Country-specific peak Projected value (Q4 2015)
  • 4. 4… since the job recovery has not gone very fast yet.636159575553514947454341Canada UnitedKingdomJapan Germany United States OECD Euro area France Italy%Employment-to-population ratioPercentage of the working-age population (aged 15 or more)Current value (Q4 2013)Start of the crisis (Q4 2007)Country-specific troughProjected value (Q4 2015)
  • 5. • Among those who are unemployed, anincreasing number of persons are out of workfor 12 months or more, facing a depreciation oftheir skills and a risk of labour market exclusion.• Among those who have kept their jobs, manyworkers and their families have experiencedeconomic hardship as a result of declines in thespending power of their earnings from work.5People have borne considerablepersonal, economic and social costs
  • 6. 6Long-term unemployment remains persistently high.6050403020100Canada United States UnitedKingdomOECD France Japan Germany Euro area Italy%Long-term unemployed (more than one year)as a percentage of total unemployedQ4 2013 Start of the crisis (Q4 2007)
  • 7. 7Labour costs have grown at a much slower pace. Thishas played an important role in helping the labourmarket weather the crisis…%6420-2-4Unit labour cost growthAverage annualised growth rateQ1 2009-Q4 2013Q4 2007-Q1 2009%3210-1-2Real wage growthAverage annualised growth rateQ1 2009-Q4 2013Q4 2007-Q1 2009
  • 8. 8… but the flip side is that many workers saw the realvalue of their earnings fall.706050403020100FIN NLD DNK SVN AUS LUX ITA POL AUT FRA BEL ALL DEU USA CZE GBR ESP GRC PRT EST%Incidence of real wage cut in 2010Percentage of full-time job stayers(aged 15-64, staying at least one year with the same employer)Nominal wage cut Real wage cut
  • 9. • When gaps in employment protection are excessive,the impact of a downturn on job losses is greater,especially among those on “atypical” and precariousjobs. They also undermine employmentprospects.• Reducing these gaps could be done by introducinga single or unified contract. This involvesovercoming implementation difficulties and requirescomplementary reforms to be effective.9Gaps between permanent and temporaryworkers should be reduced…
  • 10. 10... since fixed term contracts are increasingly usedfor new hires…%9080706050403020100Fixed-term contracts among new hiresPercentage of employees with no more than three months of tenure2011-12 2006-07
  • 11. 11… albeit atypical jobs are not an automatic stepping-stoneto permanent work.6050403020100NLD GRC EST FRA ESP IRL ITA AUT BEL POL ALL PRT SWE LUX CZE SVN GBR FIN HUN SVK NOR ISL%Three-year transition rates from temporary to permanent contractsShare of temporary employees in 2008 that were employed as full-timepermanent employees in 2011
  • 12. Job quality embraces a range of aspects thatmatter for well-being:• Earnings quality: level and distribution ofearnings;• Labour market security: risk and consequenceof job loss in terms of lost income;• Quality of the working environment: extent towhich workers have the resources they need tomeet the demands of their jobs.12Not just more jobs but also better jobsare needed
  • 13. 13There is little sign of a trade-off between jobquantity and job quality across countries…
  • 14. 14… but there are considerable differences in job qualitybetween socioeconomic groups within countries.Job quality outcomes by socio-demographic group (gender, age, education)Average over 23 European countries, 2010201612840Earnings qualityPPP-adjusted gross hourlyearnings14121086420Labour market insecurityRisk of income loss due tounemployment risk, as a % ofprevious earnings2520151050Quality of the workingenvironmentIncidence of job strain
  • 15. The OECD’s international Survey of Adult Skillsshows that:• It is not just educational attainment but also thetype of skills acquired and proficiency in theseskills that affect the probability of finding a job.• Work experience and generic skills positivelyaffects wages early on.15Having the right skills to get a goodjob: what matters most?
  • 16. 16Youth with high proficiency levels in literacyare much less likely to be NEET…The determinants of the probability of being neither in employment nor in education or trainingField of study(as compared to Social Sciences)******(NEET), for young people aged 16-29*****Educational attainment(as compared to lower secondary)*******Proficiency in literacy(as compared to below Level 1)-10 -8 -6 -4 -2 0 2 4 6 8 10Upper secondaryPost-secondary, non-tertiaryTertiaryGeneral programmesTeacher training and education scienceHumanities, languages and artsScience, mathematics and computingEngineering, manufacturing and constructionAgriculture and veterinaryHealth and welfareServicesLevel 1Level 2Level 3Level 4 and 5Percentage point difference in the probability of being NEET
  • 17. 17… and work experience as well generic skillsare key determinants of the level of pay.24211815129630The determinants of the variation in hourly wagesPercentage of the explained variance (R-squared) in hourly wagesYouth Prime-age workers Older workersExperienceGeneric skillsField of studyEducationUse of information-processingskillsProficiency in literacy
  • 18. Thank youRead more about our workWebsite: www.oecd.org/employment/oecdemploymentoutlook.htmFollow us on Twitter : @OECD_Social
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