OECD Employment Outlook 2014

OECD Employment Outlook 2014

• 1.
  Mark Keese Launchof the Employment Outlook 2014 Head of Employment Analysis and Policy Directorate for Employment, Labour and Social Affairs
• 2.
  • Unemployment hasstarted to decline, but further progress is required as the job recovery has not gone very fast yet. • People have borne considerable personal, economic and social costs 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 they are not an automatic stepping-stone to permanent work. • Not just more jobs but also better jobs are needed. The good news is that there is little sign of a trade-off between job quantity and job quality across countries. • People should also be given the opportunity to acquire the right skills to get a good job. It is not just educational attainment that matters. 2 The recovery is gaining momentum but there is no time for complacency
• 3.
  3 Unemployment hasstarted to decline, but further progress is required… 14 12 10 8 6 4 2 0 Italy Euro area France OECD United Kingdom United States Canada Germany Japan % Unemployment rate Percentage of the labour force Current value (Q4 2013) Start of the crisis (Q4 2007) Country-specific peak Projected value (Q4 2015)
• 4.
  4 … sincethe job recovery has not gone very fast yet. 63 61 59 57 55 53 51 49 47 45 43 41 Canada United Kingdom Japan Germany United States OECD Euro area France Italy % Employment-to-population ratio Percentage of the working-age population (aged 15 or more) Current value (Q4 2013) Start of the crisis (Q4 2007) Country-specific trough Projected value (Q4 2015)
• 5.
  • Among thosewho are unemployed, an increasing number of persons are out of work for 12 months or more, facing a depreciation of their skills and a risk of labour market exclusion. • Among those who have kept their jobs, many workers and their families have experienced economic hardship as a result of declines in the spending power of their earnings from work. 5 People have borne considerable personal, economic and social costs
• 6.
  6 Long-term unemploymentremains persistently high. 60 50 40 30 20 10 0 Canada United States United Kingdom OECD France Japan Germany Euro area Italy % Long-term unemployed (more than one year) as a percentage of total unemployed Q4 2013 Start of the crisis (Q4 2007)
• 7.
  7 Labour costshave grown at a much slower pace. This has played an important role in helping the labour market weather the crisis… % 6 4 2 0 -2 -4 Unit labour cost growth Average annualised growth rate Q1 2009-Q4 2013 Q4 2007-Q1 2009 % 3 2 1 0 -1 -2 Real wage growth Average annualised growth rate Q1 2009-Q4 2013 Q4 2007-Q1 2009
• 8.
  8 … butthe flip side is that many workers saw the real value of their earnings fall. 70 60 50 40 30 20 10 0 FIN 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 2010 Percentage 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 gapsin employment protection are excessive, the impact of a downturn on job losses is greater, especially among those on “atypical” and precarious jobs. They also undermine employment prospects. • Reducing these gaps could be done by introducing a single or unified contract. This involves overcoming implementation difficulties and requires complementary reforms to be effective. 9 Gaps between permanent and temporary workers should be reduced…
• 10.
  10 ... sincefixed term contracts are increasingly used for new hires… % 90 80 70 60 50 40 30 20 10 0 Fixed-term contracts among new hires Percentage of employees with no more than three months of tenure 2011-12 2006-07
• 11.
  11 … albeitatypical jobs are not an automatic stepping-stone to permanent work. 60 50 40 30 20 10 0 NLD 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 contracts Share of temporary employees in 2008 that were employed as full-time permanent employees in 2011
• 12.
  Job quality embracesa range of aspects that matter for well-being: • Earnings quality: level and distribution of earnings; • Labour market security: risk and consequence of job loss in terms of lost income; • Quality of the working environment: extent to which workers have the resources they need to meet the demands of their jobs. 12 Not just more jobs but also better jobs are needed
• 13.
  13 There islittle sign of a trade-off between job quantity and job quality across countries…
• 14.
  14 … butthere are considerable differences in job quality between socioeconomic groups within countries. Job quality outcomes by socio-demographic group (gender, age, education) Average over 23 European countries, 2010 20 16 12 8 4 0 Earnings quality PPP-adjusted gross hourly earnings 14 12 10 8 6 4 2 0 Labour market insecurity Risk of income loss due to unemployment risk, as a % of previous earnings 25 20 15 10 5 0 Quality of the working environment Incidence of job strain
• 15.
  The OECD’s internationalSurvey of Adult Skills shows that: • It is not just educational attainment but also the type of skills acquired and proficiency in these skills that affect the probability of finding a job. • Work experience and generic skills positively affects wages early on. 15 Having the right skills to get a good job: what matters most?
• 16.
  16 Youth withhigh proficiency levels in literacy are much less likely to be NEET… The determinants of the probability of being neither in employment nor in education or training Field 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 10 Upper secondary Post-secondary, non-tertiary Tertiary General programmes Teacher training and education science Humanities, languages and arts Science, mathematics and computing Engineering, manufacturing and construction Agriculture and veterinary Health and welfare Services Level 1 Level 2 Level 3 Level 4 and 5 Percentage point difference in the probability of being NEET
• 17.
  17 … andwork experience as well generic skills are key determinants of the level of pay. 24 21 18 15 12 9 6 3 0 The determinants of the variation in hourly wages Percentage of the explained variance (R-squared) in hourly wages Youth Prime-age workers Older workers Experience Generic skills Field of study Education Use of information-processing skills Proficiency in literacy
• 18.
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