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 Keese
Launch of the
Employment Outlook 2014
Head of Employment Analysis and Policy
Directorate for Employment, Labour and Social Affairs

2. • Unemployment has started 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 has started 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
… since the 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 those who 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 unemployment remains 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 costs have 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
… but the 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 gaps in 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
... since fixed 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
… albeit atypical 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 embraces a 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 is little sign of a trade-off between job
quantity and job quality across countries…

14. 14
… but there 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 international Survey 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 with high 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
… and work 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. Thank you
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