OECD Employment Outlook

Despite a generally improving economic environment in the OECD area as a whole, prospects for employment remain worrying in many countries, particularly for young people. The average youth unemployment rate in the OECD area has risen from 10% in 1979 to 13% in 1998 despite the fact that employment rates among people aged 15-24 have fallen in the past two decades. One out of every five unemployed young people lives in a household where no one else has a job. On the positive side of the ledger, more young people are staying longer in school and the proportion of dropouts has declined in most countries. For example, the proportion of 18-year-olds in the OECD population in school in 1997 was 67%, compared with 50% in 1984.

These are some of the statistics contained in the latest issue of the OECD's annual Employment Outlook, to be published under embargo for release on Thursday 24 June 1999 at 5 p.m. Paris time. A news conference will be held at OECD headquarters on 24 June at 11 a.m. to present the report and comment on its findings.

The report examines both the challenges and possible policy responses relating to employment issues in the OECD's 29 member countries. Among other things:

oGiving youth a better start (the Editorial) identifies the best ways to ensure that young people get a solid and durable foothold in the labour market, highlighting the strengths and weaknesses of different country models of the transition from school to work. It also devotes special attention to the specific needs of disadvantaged young people, who face large, and in some countries widening, educational and labour market inequalities. Experience has shown how difficult it is to develop effective labour market policies for at-risk youths, but some programmes have worked well, enabling conclusions to be drawn about certain key ingredients for success.

oOECD projections indicate that unemployment in OECD economies is likely to decline slightly from 7.1 to 7 per cent of the labour force over the next two years. Within OECD Europe, the unemployment rate is projected to fall somewhat more rapidly (0.2 percentage points per year). Despite these improvements, eight OECD countries are projected to have double-digit unemployment rates in the year 2000, and a total of 35 million persons to remain unemployed in the OECD area.

oPart-time work has played a significant role in recent employment growth, particularly in Japan and many European countries, but much less so in the United States. In most countries, hourly earnings and training are significantly lower for part-time compared with full-time workers. Despite this, most part-time workers say that they are happy working part-time, though there are differences across countries and between men and women.

oEmployment Protection Legislation (EPL) highlights the challenge of reconciling job security for workers with the need of enterprises for more flexibility. Countries have concentrated their efforts in the 1990s on easing restrictions for temporary forms of employment; conversely, there has been little change in the protection afforded to workers in regular employment. While the public debate largely focuses on possible links between EPL and overall employment and unemployment, the evidence suggests that such links are not particularly strong. However, EPL does affect the nature of unemployment. The risk of becoming unemployed is lower in countries with stricter EPL, but once unemployed there is a greater risk of remaining jobless for an extended period of time.

oTraining of adult workers is much more extensive in some OECD countries than others, with higher training rates being associated with higher levels of education, productivity and wages. This training tends to be targeted on the workers who already have the highest skills and hold permanent, full-time jobs - a pattern that risks marginalising some groups of workers unless it is counteracted by public policies.

oNew work organisation practices include teamwork, job rotation and delegation of tasks, and may have considerable implications, both for the workers concerned and the labour market as a whole. A first cross-country investigation of this phenomenon shows that firms are making considerable investments in such practices, though the extent varies a lot from country to country. Such practices are more common in firms which train more, and where works councils or unions are present. There is no clear evidence that these new practices are associated with greater use of a contingent workforce.

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