Council meeting,

(1)

LATEST LABOUR MARKET DEVELOPMENTS AND POLICY CHALLENGES

Council meeting, 14 November 2014

Stefano Scarpetta Director

Employment, Labour and Social Affairs OECD

Council

21 November 2014

(2)

2

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

Harmonised unemployment rate, percentage of the labour force

Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 6 November 2014).

3 4 5 6 7 8 9 10 11 12 13

%

Euro area Japan United States

(3)

3

Labour market conditions also vary within the Euro area

Harmonised unemployment rate, percentage of the labour force

0 5 10 15 20 25 30

%

France Italy Portugal

Spain Greece

Source: OECD Short-Term Labour Market Statistics Database (Cut-off date: 6 November 2014).

Japan

(4)

4

Weak employment prospects reflect weak aggregate demand and reduced matching efficiency

Actual and predicted percentage-point change in the job-finding rate, Q4 2007 and Q4 2013

^a

The job finding rate is measured using the probability than an unemployed person leaves unemployment in a given quarter. The change in the job-finding rate is decomposed into the change due to the business cycle and the change reflecting a shift in job matching efficiency. The cyclical component is estimated by applying the estimated impact of labour market tightness on the job-finding rate, using data from before the crisis, to the observed change in labour market tightness since the crisis. The difference between the actual and the cyclical change in the job-finding rate is interpreted as the change in matching efficiency.

Source: OECD estimates based on OECD Short-Term Labour Force Statistics (database), http://dx.doi.org/10.1787/data-00046-en and national estimates of job vacancies.

-10 -8 -6 -4 -2 0 2 4

%

Business cycle Matching efficiency Actual

(5)

5

Sectoral mismatch follows a cyclical pattern

Index of sectoral mismatch, 2005-13

..: not available.

a) Unweighted average of the 11 following European countries: the Czech Republic, Estonia, Finland, Germany, Greece, Hungary, the Netherlands, Portugal, the Slovak Republic, Slovenia and the United Kingdom.

Source: OECD estimates based on the Job Vacancy Database from Eurostat and the European Union Labour Force Survey (EU-LFS) for the European Union and the Job Openings and Labor Turnover Survey (JOLTS) and the Current Population Survey (CPS) for the United States.

European Union

^a

United States

0 ..

0.05 0.1 0.15 0.2 0.25 0.3

0 0.05 0.1 0.15 0.2 0.25 0.3

(6)

6

OECD High-Level Policy Forum on Migration:

Mobilising Migrants’ Skills for Economic Success

(1-2 December 2014 (1 ½ days), OECD Conference Center)

 Chair: Chris Alexander, Minister of Citizenship and Immigration (Canada)

 Vice-Chair: Andrea Nahles, Federal Minister of Labour and Social Affairs (Germany)

 Programme content:

 Reconciling short-term and long-term objectives in migration policies

 Working Lunch on Migration and Trade in the Service Economy with Keynote speech by Mr. Pascal Lamy (former Director-General of the World Trade Organisation)

 Building public confidence in migration issues

 Engaging with employers and unions

 Keynote speech by Peter Sutherland (UN Special Representative on International Migration)

 Considering the role of migration and migrants in skills strategies in OECD countries (four parallel sessions)

 Launch of the 2014 edition of IMO on the morning of the first day

(7)

7

The migration landscape in the OECD is changing

Evolution of international migration flows since 2000 (=100)

Total

Settlement countries

Germany

Spain - Italy

Other Europe

50 100 150 200 250 300

Total Settlement countries Germany Spain - Italy Other Europe

Note: Settlement countries include Australia, Canada, New Zealand and the United States.

“Other Europe” includes all European OECD countries apart from Germany, Italy and Spain.

(8)

8

Free mobility is the driver of changes in migration flows

Permanent immigration in OECD countries by category, 2007-2013 (millions)

Source: OECD International Migration Database.

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6

2007 2008 2009 2010 2011 2012 2013 (estimates)

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9

The integration of migrants

High-educated immigrants have lower employment rates than their native-born peers…

Employment rates among the highly educated 15-64 who are not in education, 2013

Note: The data for Canada, New Zealand and Turkey apply to the 25-64 age group and may include people still in education. The data for Australia refer to the 15-64 age group and may include people still in education.

Source: European countries and Turkey: labour force surveys (Eurostat), 2013; Australia: Labour Force Survey 2012; Canada, New Zealand: Labour force surveys 2011-12; Chile: Encuesta de Caracterización Socioeconómica Nacional (CASEN) 2011; Israel: Labour Force Survey 2011; Mexico:

Encuesta Nacional de Ocupación y Empleo (ENOE) 2013; United States: Current Population Surveys 2013.

AUT BEL CZE CHE

DNK DEU

ESP

ESTFIN FRA

GBR

GRC

HUN IRL

ISL

ITA

LUX NLD

NOR PRT POL

SVK

SVN

SWE MEX CAN

NZL USA

TUR

ISR AUS CHL

OECD

50 55 60 65 70 75 80 85 90 95

65 70 75 80 85 90 95

Employment rates of the highly educated foreign-born

Employment rates of the highly educated native-born

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10

…and when in employment, they are more often over- qualified

Percent of employed highly-educated who are in a medium- or low-skilled job, 15-64, 2013

0 10 20 30 40 50

60 Native-born Foreign-born

Note: Highly-educated corresponds to tertiary education. They are considered over-qualified if the job is classified as ISCO 4 to 9. (ISCO stands for International Standard Classification of Occupations.)

Source: European countries and Turkey: Labour force surveys (Eurostat), 2013; Chile: Encuesta de Caracterización Socioeconómica Nacional (CASEN) 2011; Israel: Labour Force Survey 2011; New Zealand: Labour Force Survey 2012; United States: Current Population Survey 2013.

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11

Part of the gaps in outcomes are due to lower literacy skills

Mean literacy scores 16- to 64-year-old, 2012

Source: OECD Survey of Adult Skills (PIAAC), 2012..

150 170 190 210 230 250 270 290 310

AUS SVK CZE IRL EST CAN GBR AUT OECD NLD NOR BEL DEU FIN USA DNK SWE ESP FRA ITA

Foreign-born Native-born

Gaps are observed across all education levels

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12

New approaches to labour migration management

• The recognition of foreign qualifications – both pre- and post-departure - is becoming a key element in labour migration and integration policies (for labour migration: AU, CA; for integration: AT, DE, SE,…)

• Policies making it easier for international students to remain and work after graduation are still on the rise (AT, CH, KR, SE, TR)

• Expression of Interest in systems which first create a pool of immigrants from which authorities and employers can pick are becoming wide-spread (AU, CA, NZ,…)

• Bilateral co-operation is increasing, particularly with respect to low-skilled migration (KR, IL; for seasonal: AU, CA, NZ)

• Training in the origin countries is also getting new attention (DE)

• Investor visas are being adjusted to achieve real returns (AU, CA, UK) or offered for

real estate/treasury bond investments in countries in crisis (ES, GR, IR, PT)

(13)

13

Council meeting,

LATEST LABOUR MARKET DEVELOPMENTS AND POLICY CHALLENGES

Council meeting, 14 November 2014

Stefano Scarpetta Director

Employment, Labour and Social Affairs OECD

Council

21 November 2014

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

Harmonised unemployment rate, percentage of the labour force

Labour market conditions also vary within the Euro area

Harmonised unemployment rate, percentage of the labour force

Weak employment prospects reflect weak aggregate demand and reduced matching efficiency

Actual and predicted percentage-point change in the job-finding rate, Q4 2007 and Q4 2013

Sectoral mismatch follows a cyclical pattern

Index of sectoral mismatch, 2005-13

European Union

United States

OECD High-Level Policy Forum on Migration:

Mobilising Migrants’ Skills for Economic Success

(1-2 December 2014 (1 ½ days), OECD Conference Center)

 Chair: Chris Alexander, Minister of Citizenship and Immigration (Canada)

 Vice-Chair: Andrea Nahles, Federal Minister of Labour and Social Affairs (Germany)

 Programme content:

 Reconciling short-term and long-term objectives in migration policies

 Working Lunch on Migration and Trade in the Service Economy with Keynote speech by Mr. Pascal Lamy (former Director-General of the World Trade Organisation)

 Building public confidence in migration issues

 Engaging with employers and unions

 Keynote speech by Peter Sutherland (UN Special Representative on International Migration)

 Considering the role of migration and migrants in skills strategies in OECD countries (four parallel sessions)

 Launch of the 2014 edition of IMO on the morning of the first day

The migration landscape in the OECD is changing

Evolution of international migration flows since 2000 (=100)

Note: Settlement countries include Australia, Canada, New Zealand and the United States.

“Other Europe” includes all European OECD countries apart from Germany, Italy and Spain.

Free mobility is the driver of changes in migration flows

Permanent immigration in OECD countries by category, 2007-2013 (millions)

The integration of migrants

High-educated immigrants have lower employment rates than their native-born peers…

Employment rates among the highly educated 15-64 who are not in education, 2013

…and when in employment, they are more often over- qualified

Percent of employed highly-educated who are in a medium- or low-skilled job, 15-64, 2013

Part of the gaps in outcomes are due to lower literacy skills

Mean literacy scores 16- to 64-year-old, 2012

Gaps are observed across all education levels

New approaches to labour migration management

• The recognition of foreign qualifications – both pre- and post-departure - is becoming a key element in labour migration and integration policies (for labour migration: AU, CA; for integration: AT, DE, SE,…)

• Policies making it easier for international students to remain and work after graduation are still on the rise (AT, CH, KR, SE, TR)

• Expression of Interest in systems which first create a pool of immigrants from which authorities and employers can pick are becoming wide-spread (AU, CA, NZ,…)

• Bilateral co-operation is increasing, particularly with respect to low-skilled migration (KR, IL; for seasonal: AU, CA, NZ)

• Training in the origin countries is also getting new attention (DE)

• Investor visas are being adjusted to achieve real returns (AU, CA, UK) or offered for

real estate/treasury bond investments in countries in crisis (ES, GR, IR, PT)

Thank you

Contact: [email protected]

OECD Directorate for Employment, Labour and Social Affairs, via www.oecd.org/els

OECD Employment Outlook, via www.oecd.org/employment/outlook

OECD Employment database, via www.oecd.org/employment/database