OECD Employment Outlook 2016

OECD Employment Outlook 2016
7 July 2016
OECD Employment Outlook 20016 www.oecd.org/employment/outlook

The jobs recovery continues, but remains incomplete
in the majority of OECD countries
Evolution of the employment-to-population ratio
as a percentage of the population aged 15-74
Note: Shaded area refers to the OECD projections. OECD is the weighted average for the 34 OECD member countries. Euro area is the aggregate of 15
OECD countries of the euro area.
54
56
58
60
62
64
66
68
70
%
Projections
• Japan
• United States
• OECD
• Euro Area

Unemployment has been falling but remains above its
pre-crisis level in most OECD countries
Evolution of the unemployment rate as a percentage of the labour force
2
3
4
5
6
7
8
9
10
11
12
13
%
Projections
Note: OECD is the weighted average for the 34 OECD member countries. Euro area is the aggregate of 15 OECD countries of the euro area.
• Euro Area
• OECD
• United States
• Japan

Long-term unemployment has fallen more slowly
than total unemployment
Long-term unemployed (12 months and over) as a percentage of total unemployed,
Q4 2007-Q4 2015
0
10
20
30
40
50
60
%
Note: OECD is the weighted average of 33 OECD countries excluding Chile.
• Euro Area
• Japan
• OECD
• United States

Real hourly earnings have grown slowly
since the onset of the crisis
Index base 100 in Q4 2007
Note: Total wages divided by total hours worked of employees deflated using the private consumption price index. OECD is the weighted average of 27 OECD
countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway and Turkey).
98
100
102
104
106
108
110
• Euro Area
• OECD
• United States
• Japan

The post-crisis surge in unemployment led to slower nominal wage growth, but
this effect has now been reversed in some countries
Wage-Phillips curves: Relationship between nominal wage growth and change
in the unemployment rate since the start of the crisis, Q4 2007-Q4 2015
Note: Nominal wage growth: year-on-year percentage change in nominal hourly wage (defined as total wages divided by hours worked of employees); unemployment gap: percentage-points
change in the unemployment rate since the start of the crisis in Q4 2007. OECD: Unweighted average of 27 OECD countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway
and Turkey). Euro area: Unweighted average of the 17 euro area countries.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
-1 0 1 2 3 4
Nominal
hourly wage
growth, %
Unemployment gap, percentage-points change
OECD
Q4 2015
Q4 2007
0
1
2
3
4
5
6
7
-1 0 1 2 3 4 5 6
Nominal
hourly wage
growth, %
Euro area
Q4 2007
Q4 2015
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
-1 -0.5 0 0.5 1 1.5 2
Nominal
hourly wage
growth, %
Japan
Q4
2007
Q4 2015
0
0.5
1
1.5
2
2.5
3
3.5
4
0 1 2 3 4 5 6
Nominal
hourly wage
growth, %
United States
Q4 2007
Q4 2015

Youth unemployment has receded from its post-crisis peak,
but remains very high in a few European countries
Percentage of youth (aged 15-24) labour force, Q4 2007- Q4 2015
Note: Youth aged 16-24 for the United States. Q1 2016 for Canada and the United States. Country-specific peak is defined as the maximum value of the youth
unemployment rate since the start of the crisis (Q4 2007).
0
10
20
30
40
50
60
%
Q4 2007 Country-specific peak Q4 2015 (↗)

The NEET rate has increased in the majority of OECD countries
Percentage of youth aged 15-29 who are neither employed nor in education or training,
2007-15
Note: 2008 and 2013 for Korea. OECD is the unweighted average of 33 OECD countries (excluding Israel).
0
5
10
15
20
25
30
35
40
45
%
2007 2015 (↗)2007 2015 (↗)

Many NEETs have not finished upper-secondary schooling
Percentage distribution of youth aged 15-29 who are neither employed
nor in education or training by educational attainment, 2015
Note: 2013 data for Korea. OECD is the unweighted average for the 34 OECD member countries. High-skilled refers to NEETs with at least a tertiary degree and low-skilled to
persons who have not finished upper secondary schooling.
0
10
20
30
40
50
60
70
80
90
100
%
• High-skilled
• Medium-skilled
• Low-skilled

Cumulative gaps in real hourly wage growth since the crisis
Percentage shortfall of the Q4 2015 real hourly earnings with respect to a counterfactual value
calculated assuming the pre-crisis growth rate (Q1 2000 to Q4 2007) had continued after Q4 2007
Note: OECD is the weighted average of 27 OECD countries (excluding Chile, Iceland, Korea, Mexico, New Zealand, Norway and Turkey).
-20
-10
0
10
20
30
40

The majority of OECD countries still face a significant unemployment gap, a
significant wage gap or both
Note: The unemployment gap is defined as the percentage-point change in the unemployment rate in Q4 2015 relative to its level in Q4 2007 (just before the crisis). The wage gap (real
hourly earnings) is defined as the percentage shortfall of the Q4 2015 value with respect to a counterfactual value calculated assuming the pre-crisis growth rate during Q1 2000 to Q4
2007 (Q1 2002 to Q4 2007 for Poland) had continued after Q4 2007.
AUS
AUT
BEL
CAN
CZE
DNK
EST
FIN
FRA
DEU
GRC
HUN
IRL
ISR ITA
JPN
LUX
NLD
POL
PRT
SVK
SVN
ESP
SWE
CHE
GBR
USA
EA19
OECD
LVA
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
45
50
55
-6 -4 -2 0 2 4 6 8 10 12 14 16 18
Real hourly wage gap
(Percentage change)
Unemployment gap (percentage-points change)
Unemployment gap of at least 2
percentage points and wage gap of
at least 5%
Unemployment gap of at least 2
percentage points, no/small wage
gap
No/small unemployment gap
and no/small wage gap
No/small unemployment gap,
wage gap of at least 5%

Skills proficiency explains a small part of the variation in skills use, while
occupation and work organisation explain a large part
Share of skills use variance explained by individual and firm factors, OECD PIAAC countries
0
10
20
30
40
50
60
Use of reading at work Use of writing at work Use of numeracy at work Use of ICT skills at work Problem solving skills at work
Firm size Occupation Industry
High-Performace Work Practices (HPWP) Skills proficiency Country fixed effects

Higher skills use at work is associated with higher wages, over and
above the effect of skills proficiency
Percentage change in wages associated to a standard deviation increase in skills use, proficiency
and years of education
0
0.04
0.08
0.12
0.16
0.2
Use of reading at work Use of writing at work Use of numeracy at work Use of ICT skills at work Problem solving skills at work
Skills proficiency Skills use at work Years of education

High-Performance Work Practices (HPWP) can positively influence the
use of information-processing skills at work
Average skills use at work, by HPWP intensity
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
A. Work flexibility - Sequence of
tasks
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
B. Work flexibility - Speed of work
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
C. Work flexibility - How to do
work
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
E. Instructing, teaching and
training others
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
F. Sharing information with co-
workers
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
G. Organising own time
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
H. Planing own activities
1 2 3 4
Reading
Writing
Numeracy
ICT at work
Problem solving
D. Co-operating with co-workers
• To a high extent and
more
• Up to some extent
• Not at all
• At least once a week
• At least once a
month
• Never

The use of bonuses, training and flexible working hours can
promote skills use by enhancing workers’ motivation
to make full use of their skills at work
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1
Reading
Writing
Numeracy
ICT at work
Problem solving
Flexible working hours minus no flexibility Training last year minus no training Bonus minus no bonus

Structural reforms can boost the economy
in the long run: the case of product market regulation
Aggregate employment gains from competition-enhancing reforms, in percentage
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
%

Structural reforms can boost the economy
in the long run: the case of labour market regulation
Aggregate labour market effects of flexibility enhancing EPL reforms
** ***
***
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Wage and salary employment
(%)
Wages
(%)
Wages, composition corrected
(%)
Low-skilled share in hours worked
(percentage points)
Note: ***, ** denote estimated impacts that are significant at the 1% , 5% level, respectively.

In the short-run reforms can entail job losses
Cumulative percentage change in employment up to 4 years following reform
-2.5
-2
-1.5
-1
-0.5
0
0.5
Before 1 2 3 4
Time since reform (years)
A. Barriers to Firm Entry
-1.5
-1
-0.5
0
0.5
Before 1 2 3 4
B. Dismissal regulations

Short-term job losses from EPL reforms
are minimized in dual labor markets
Cumulative percentage change in employment up to 4 years following reform
- 1.2
- 0.8
- 0.4
0.0
0.4
0.8
Before 1 2 3 4
15% of fixed-term contracts 10% of fixed-term contracts 5% of fixed-term contracts

Many countries are converging to low gender participation gaps, but
progress is uneven
Percentage-point difference in labour force participation rates between men and women of
working-age
0
10
20
30
40
50
60
p.p
A. Countries experiencing strong
decline in the gender participation
gap
Argentina Brazil
Chile Colombia
Costa Rica Mexico
Peru OECD
0
10
20
30
40
50
60
p.p
B. Countries experiencing no
change in the gender participation
gap at a low level
China
Russian Federation
South Africa
OECD
0
10
20
30
40
50
60
p.p
C. Countries experiencing no
change in the gender participation
gap at a high level
Egypt India
Indonesia Morocco
Tunisia Turkey
OECD
Note: OECD is the unweighted average of the 34 OECD member countries.

Top management positions are dominated by men,
but progress has often been sizable
Women’s share of top management or executive positions as a percentage of all top management
or executive positions, 2000 and 2014
0 10 20 30 40 50
Egyp
Morocco
Turkey
India
Tunisie
Indonesia
Peru
China
South Africa
OECD
Argentina
Costa Rica
Mexico
Brazil
Russia Federation
Colombia
Chili
2014
2000
Note.: OECD is the unweighted average of the 33 OECD member countries (Israel not included).

The gender pay gap remains substantial in most countries
Difference between male and female median earnings divided by male median
earnings
0
10
20
30
40
50
60
Costa Rica Colombia Mexico Argentina Turkey OECD Chile Brazil Indonesia Peru South
Africa
Russian
Federation
India
%
1990s 2000s 2010s (↗)
Notes: Earnings refer to the monthly earnings of full-time employees (usually persons working at least 30 hours per week). The pay gap has been
averaged over the available years within each decade. OECD is the unweighted average of the 34 OECD member countries

OECD Employment Outlook 2016

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OECD Employment Outlook 2016

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