LATEST LABOUR MARKET DEVELOPMENTS AND SOME SOCIAL POLICY CHALLENGES

OECD Parliamentary Days5 February 2014

Paul SwaimSenior EconomistEmployment, Labour and Social AffairsOECD

2

The labour market impact of the crisis and recovery has been large, but highly uneven across countries

Unemployment rate, percentage of the labour force

Shaded area refers to the latest projections from the OECD Economic Outlook n°94.Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 4 February 2014) and OECD Economic Outlook Database.

Q4 200

7

Q1 200

8

Q2 200

8

Q3 200

8

Q4 200

8

Q1 200

9

Q2 200

9

Q3 200

9

Q4 200

9

Q1 201

0

Q2 201

0

Q3 201

0

Q4 201

0

Q1 201

1

Q2 201

1

Q3 201

1

Q4 201

1

Q1 201

2

Q2 201

2

Q3 201

2

Q4 201

2

Q1 201

3

Q2 201

3

Q3 201

3

Q4 201

3

Q1 201

4

Q2 201

4

Q3 201

4

Q4 201

4

Q1 201

5

Q2 201

5

Q3 201

5

Q4 201

53

4

5

6

7

8

9

10

11

12

13

OECD area Euro area Japan

United States

%

3

Long-term unemployment has risen in most countries, but sharp hikes are confined to only a fewa,b

Percentage of unemployment,Q4 2007 and Q3 2013

Note: Countries are shown by ascending order of the incidence of long-term unemployment in Q3 2013.a) Data are not seasonally adjusted but smoothed using three-quarter moving averages. OECD is the weighted average of 32 OECD countries excluding Chile

and Korea. b) Latest data for Israel corresponds to 2012.Source: OECD calculations based on quarterly national Labour Force Surveys (Cut-off date: 15 January 2014).

Mexico

Canad

a

New Zea

land

Israe

l

Sweden

Austral

ia

Norway

Turkey

Finland

Denmark

Icelan

d

United S

tates

Austria

Switzerla

nd G7

Luxem

bourg

United K

ingdo

mOECD

Netherl

ands

Japan

France

Estonia

Czech R

epub

licPola

nd

German

y

Belgium

Europe

an Unio

nSpa

in

Euro ar

ea

Sloven

ia

Hunga

ry Italy

Portug

al

Irelan

d

Greece

Slovak

Repub

lic0

10

20

30

40

50

60

70

80Q4 2007 Q3 2013

%

4

Youth unemployment has reached very high levels in some OECD countries

Percentage of youth (aged 15-24) labour force, Q4 2007a- Q4 2013b

Note: Countries shown in ascending order of the youth unemployment rates in Q4 2013.a) Q2 2007 for Switzerland.b) Q3 2013 for Chile, Estonia, Greece, Hungary, Israel, Korea, Mexico, New Zealand, Norway, Switzerland, Turkey and the United Kingdom.Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 4 February 2014) .

Japan

German

yAust

ria

Norway

Mexico

KoreaIce

land

Switzerla

nd

Netherl

ands

Israe

l

Austral

ia

Denmark

Canad

a

United S

tates

Chile G7OECD

Estonia

New Zea

landTurk

ey

Czech R

epub

lic

Finland

Luxem

bourg

United K

ingdo

m

Sweden

Belgium

Europe

an Unio

n

Sloven

ia

Euro ar

ea (1

7)

Irelan

dFran

ce

Hunga

ryPola

nd

Slovak

Repub

lic

Portug

al Italy

Spain

Greece

0

10

20

30

40

50

60

70

Q4 2007 Q4 2013

%

5

Very large increases in the number of workless households are a major test for social policies

Shares of adults living in workless households, in percentages

Note: Households are defined as “workless” if all household members are either unemployed or labour-market inactive.“Adults” refers to the population aged 15‑64.

2013 instead of 2012 for the United States.

Source: OECD estimates based on the European Union Labour Force Survey and the United States Current Population Survey.

Luxem

bourg

German

y

Netherl

ands

Austria

Czech R

epub

lic

Estonia

Slovak

Repub

lic

Portug

al

Finland

United S

tates

Latvia

Denmark

Sloven

ia

United K

ingdo

mPola

nd Italy

Turkey

France

Hunga

ry

Belgium Spa

inIre

land

Greece

0

3

6

9

12

15

18

212007 2012 ( )↗

%

6

Social spending, especially for working-age people, is most-frequently cited item in consolidation plans

Note: A questionnaire was submitted to countries in December 2011 to update The OECD 2010-11 report on fiscal consolidation strategies. Based on country responses and publicly available sources, information was collected for 31 countries. Explanation: 70% of countries plan to cut welfare spending in 2012. Welfare includes working-age social transfers, such as unemployment benefits, social assistance, disability benefits, child benefits, etc. Pensions comprise old-age pensions.Source: OECD National Accounts, OECD (2012), “Restoring Public Finances, 2012 Update”, and OECD (2011), "Restoring Public Finances: Fiscal Consolidation in OECD Countries".

Major programme measures in fiscal consolidation plans, by domain, based on 2011 and 2012 surveys, OECD

Government spending by function, 2011, OECD average

0

10

20

30

40

50

60

70

80Plan 2012 Plan 2011

% o

f par

ticipa

ting

coun

tries

14

15

21

3

35

12

7

• The distributional impact of pension reforms – Future pension entitlements will fall but low earners have

been generally protected– To maintain the same standard of living people will need to

work longer– Higher pension ages: 67 is the new 65

• What about future retirement-income adequacy? – Which role can housing, financial wealth and public services

play?• Pension indicators cover OECD and G20 countries with 2012

rules/parameters

Pensions at a Glance 2013

8

Thank youContact: Stefano.Scarpetta@oecd.org

OECD Directorate for Employment, Labour and Social Affairs, via www.oecd.org/els

OECD Employment Outlook, via www.oecd.org/employment/outlook

OECD Society at a Glance, via: www.oecd.org/social/societyataglance.htm

OECD Pension at a Glance, via: www.oecd.org/pensions/pensionsataglance.htm

OECD Employment database, via www.oecd.org/employment/database