RECENT LABOUR MARKET DEVELOPMENTS AND POLICY CHALLENGESCHALLENGES

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OECD Council Meeting, Paris 28 June 2012

RECENT LABOUR MARKET DEVELOPMENTS AND POLICY CHALLENGES

CHALLENGES

John P. Martin

Director for Employment, Labour and Social Affairs

OECD

Council

28 June 2012

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

OECD harmonised unemployment rates since December 2007, percentage of the labour force, p y , p g , seasonally adjusted data

9,5 10,5

%

OECD European Union

United States

6,5 7,5 8,5

2 4,5

5,5

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Employment growth in the recovery has been anaemic and turned negative again in the Euro area

% change (quarter-on-quarter) of dependent employment

^a

Euro area Japan United States

0 0,5

%1

0 0,5

%1

0 0,5

%1

-2 -1,5 -1 -0,5 0

2 -1,5 -1 -0,5 0

3 -2

a) Total nonfarm payroll employees for the United States.

Source: OECD estimates based on Eurostat, Quarterly National Accounts, Japan Statistics Labour Force Survey results, and BLS, Current Employment Statistics.

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Long-term unemployment has increased in many OECD countries

Long-term unemployed (more than one year) as a percentage of total unemployed

^a

%80

50 60 70 80

2007 Q4 2011 Q4

10 20 30 40

4 0

Note: Countries are shown in ascending order of the incidence of long-term unemployment in 2011 Q4.

a) Data are not seasonally adjusted. OECD is the weighted average of 32 OECD countries excluding Chile and Korea.

Source: OECD calculations based on quarterly national Labour Force Surveys.

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ALMP spending has responded more strongly than in earlier recessions, but still failed to keep pace with the steep hike in

unemployment

A. Actual and predicted

^a

change in ALMP spending since the start of the crisis

^b

% change between 2007 and 2010

Panel B. Actual and predicted

^a

change in ALMP resources per unemployed

^b

% change between 2007 and 2010

16 20 24

%

-10 -5

%0

4 8 12 6

-25 -20 -15 0

5 0

Actual change Predicted change -30

Actual change Predicted change

a) The predicted change in ALMP spending is based on the cyclical responsiveness of ALMP spending during 1985-2007.

b) The data refer to weighted averages of 26 OECD countries (i.e. excluding Chile, Estonia, Iceland, Israel, Korea, Slovenia, Turkey and the United Kingdom).

Source: OECD estimates based on the OECD Labour Market Programmes and OECD Main Economic Indicators Databases.

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Thank you Thank you

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