OECD Employment Outlook 2018

The 2018 edition of the OECD Employment Outlook reviews labour market trends and prospects in OECD countries. Chapter 1 presents recent labour market developments. Wage growth remains sluggish due to low inflation expectations, weak productivity growth and adverse trends in low-pay jobs. Chapter 2 looks at the decline of the labour share and shows that this is partially related to the emergence of “superstar” firms, which invest massively in capital-intensive technologies. Chapter 3 investigates the role of collective bargaining institutions for labour market performance. Systems that co-ordinate wages across sectors are associated with better employment outcomes, but firm-level adjustments of sector-level agreements are sometimes required to avoid adverse effects on productivity. Chapter 4 examines the role of policy to facilitate the transition towards new jobs of workers who were dismissed for economic reasons, underlying the need of early interventions in the unemployment spell. Chapter 5 analyses jobseekers’ access to unemployment benefits and shows that most jobseekers do not receive unemployment benefits and coverage has often been falling since the Great Recession. Chapter 6 investigates the reason why the gender gap in labour income increases over the working life, stressing the role of the lower professional mobility of women around childbirth.

How does Australia compare?

  • In the first quarter of 2018, the Australian employment rate of those aged between 15 and 74 years is 67%, about 5 percentage points above the OECD average and it is projected to rise further in 2019.
  • Over the past decade Australia’s unemployment rate has been consistently below the OECD average. However, in contrast to a continuous decline for the OECD average over the past five years, there has been little change in Australia. In the first quarter of 2018 Australia’s unemployment rate was at 5.5%, level with the OECD average of 5.4%
  • Wage growth in Australia remains lower than it was before the crisis for comparable levels of unemployment.
  • There has been a significant worsening in the average earnings from part-time jobs relative to that of full-time jobs, which is associated with the rise of involuntary part-time employment.
  • The Australian labour market performs above the OECD average in all key indicators of job quality and inclusiveness, except the gender gap in labour income.

Finally, the OECD notes that early provision of employment services after job loss can speed up re-employment, as current entitlement rules for unemployment benefits delay it by treating severance payments as compensation.

(Source: OECD iLibrary)


COPE Policy Brief – A broken social elevator? How to promote social mobility

The OECD Centre for Opportunity and Equality has published this policy brief, highlighting that over the last two decades people have become more pessimistic about the prospects of social mobility –perceptions that somewhat correspond with actual mobility measures.

In many countries, people at the bottom of the income ladder have little chances of moving upward, with ‘sticky floors’ preventing them from moving up, and those at the top remain at the top, with even stronger ‘sticky ceilings’. The social elevator is broken, which carries with it harmful economic, social and political consequences.

How does Australia compare?

In Australia, 39% of people agreed that parents’ education is important to get ahead in life, and it is indeed significantly correlated: it could take four generations of children born in a family at the bottom of the income distribution to reach the mean income, similar to the OECD on average.

  • There is very limited mobility at the lower end of the scale for occupations: almost half of children of manual workers remain manual workers themselves, and only 12% become managers (more limited than OECD averages, at 37% and 24% respectively).
  • Australia performs rather well in terms of educational mobility, but individuals’ income mobility over the lifetime is limited, particularly at the bottom and at the top.
  • Low income support and lack of opportunities in some areas play a role in sticky floors, particularly concerning the young and those belonging to indigenous communities.

To improve these outcomes, the OECD determined three key policy priorities for Australia: Ensure equitable opportunities for engaging in the labour market; reduce barriers to labour mobility; and maintain the investment approach to welfare policy that focuses on vulnerable groups.

(Source: OECD Centre for Opportunity and Equality)

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