Global Employment Trends 2012: World faces a 600 million jobs challenge, warns ILO

24 January 2012.GENEVA (ILO News). The world faces the “urgent challenge” of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report on global employment by the International Labour Organization (ILO).

“After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million,” says the ILO in its annual report titled “Global Employment Trends 2012: Preventing a deeper jobs crisis”. Moreover, the report says more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year.

The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the US$ 2 a day poverty line, mostly in developing countries.

“Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide – or an estimated 1.1 billion people – either unemployed or living in poverty”, said ILO Director-General Juan Somavia. “What is needed is that job creation in the real economy must become our number one priority”.

The report says the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio (the proportion of the working-age population in employment), which suffered the largest decline on record between 2007 (61.2 per cent) and 2010 (60.2 per cent).

At the same time, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers1 were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from 6 per cent to 6.9 per cent.

The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below 2 per cent, then unemployment would rise to 204 million in 2012. In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around 1 million lower in 2012.

Young people continue to be among the hardest hit by the jobs crisis. Judging by the present course, the report says, there is little hope for a substantial improvement in their near-term employment prospects.

Global Employment Trends 2012 says 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than 4 million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.

The report’s main findings also include:

• There has been a marked slowdown in the rate of progress in reducing the number of working poor. Nearly 30 per cent of all workers in the world – more than 900 million – were living with their families below the US$2 poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends. Of these 900 million working poor, about half were living below the US$1.25 extreme poverty line.
• The number of workers in vulnerable employment2 globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009.
• Among women, 50.5 per cent are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2).
• Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.
• The labour productivity gap between the developed and the developing world – an important indicator measuring the convergence of income levels across countries – has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was US$ 72,900 in 2011 versus an average of US$ 13,600 in developing regions.

“These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing”, said Mr. Somavia. “Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples’ lives”.

The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery.

“Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation”, says the report.

It also warns that in times of faltering demand further stimulus is important and this can be done in a way that does not put the sustainability of public finances at risk. The report calls for fiscal consolidation efforts to be carried out in a socially responsible manner, with growth and employment prospects as guiding principles.

1. Executive summary
2. English Español Français 
3. Full report
4. Chapter 1- The macroeconomic outlook is deteriorating
5. Chapter 2- Global labour market situation
6. Chapter 3- Regional labour market and economic developments
7. Chapter 4- Policy options for growth with jobs
8. Appendices

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Nepal Adolescent Girls Employment Initiative Project

The development objective of the Adolescent Girls Employment Initiative Project is to increase employment and incomes of young women aged 16-24 years by strengthening an existing model for training and job placement in Nepal. The project includes the following components: (i) skills provision and job training (US$ 1,719,643); and (ii) institutional strengthening, monitoring and evaluation (US$ 150,974). 

The development objectives remain fully consistent with the World Bank's Interim Strategy Note (ISN) for Nepal. The project has been successful along several dimensions and is currently rated as satisfactory on both implementation progress and development objectives. Under component (skills provision and job training), progress includes completion of skills training to nearly 2500 beneficiaries over 2010 and 2011. Beneficiaries also have to appear for an independent skills test carried out by the National Skills Testing Board (NSTB) and nearly 90 percent of beneficiaries have successfully completed their skills test. Beneficiaries have also received optional additional packages on psychosocial training, awareness on reproductive health, HIV/AIDS, links to prospective employers, business and enterprise skills training, and links to credit schemes. 

In 2012, the project aims to train 2007 young women across 36 trades. The extension is necessary to correct a mistake made during project preparation where there is a discrepancy in the closing date between the project paper and the grant agreement where the former identifies closing date as December 31, 2011, while the latter identifies the closing date as December 31, 2012. There is a clear plan for completion of all project activities.

World Bank. Document Date: 2011/12/28. Document Type: Project Paper.Report Number: 66210

Nepal Adolescent Girls Employment Initiative Project

For more information about Projects in Nepal see Southern Asia Projects

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Severance pay compliance in Indonesia

This paper contributes new evidence from two large household surveys on the compliance of firms with severance pay regulations in Indonesia, and the extent to which changes in severance pay regulations could affect employment rigidity. Compliance appears to be low, as only one-third of workers entitled to severance pay report receiving it, and on average workers only collect 40 percent of the payment due to them. Eligible female and low-wage workers are least likely to report receiving payments. Widespread non-compliance is consistent with trends in employment rigidity, which remained essentially unchanged following the large increases in severance mandated by the 2003 law. These results suggest that workers may benefit from a compromise that relaxes severance pay regulations while improving enforcement of severance pay statutes, and possibly establishing a system of unemployment benefits.

The financial crisis that emerged in the United States in mid-2007 quickly transformed into a global credit crunch that sharply reduced global trade flows. Many countries were affected by the severe global recession that followed, and millions of individuals throughout the world lost jobs, leading to increased informality and working poverty. In the aftermath of the crisis, policymakers throughout the world are questioning whether existing labor market regulations successfully balanced the competing goals of maintaining flexibility and protecting workers.

While discussions over the scope of labor market regulations are often heated, views are typically based either on the predictions of theoretical models or anecdotes. The lack of evidence is particularly acute for developing countries, where hard data are rare and mechanisms for enforcing regulations tend to be limited. Lack of enforcement is a particularly serious concern, given that significant portions of workers report earning wages that fall below the statutory minimum.2 No systematic evidence, however, exists regarding compliance with other labor regulations, making it difficult to make an informed assessment of the costs and benefits of regulatory reform.

This paper contributes new evidence on the compliance of firms with severance pay regulations in Indonesia, and the extent to which changes in severance pay regulations could affect employment rigidity. This evidence sheds light on a vigorous policy debate that arose in Indonesia prior to the onset of the global financial crisis, following the passage of a 2003 labor law that increased employment protection and severance pay. The debate pitted the business community, which warned that increases in severance pay regulations would reduce employment, against organized labor, which argued that severance pay makes an important contribution to income security.

Author: Brusentsev, Vera ; Newhouse, David ; Vroman, Wayne; Document Date: 2012/01/01.Document Type: Policy Research Working Paper.Report Number: WPS5933

For more information about Projects in Indonesia see South-Eastern Asia Projects

Severance pay compliance in Indonesia

The Economic and Employment Contributions of Shale Gas in the United States

IHS. The natural gas "shale gale" that has dramatically transformed the outlook for U.S. energy supplies is also having profound economic impacts -- creating jobs, reducing consumer costs of natural gas and electricity, stimulating economic growth and bolstering federal, state and local tax revenue, according to a new IHS Global Insight study. The study found that shale gas production supported more than 600,000 jobs in 2010, a number that is projected to grow to nearly 870,000 by 2015.

The study, The Economic and Employment Contributions of Shale Gas in the United States, is the most definitive study to date tracking the long-term economic impact of U.S. shale gas production. It presents the economic contributions of shale gas in terms of jobs, economic value and government revenues through 2035, as well as the broader macroeconomic impacts on households and businesses. The report is the first of three on the economic effects of unconventional gas and oil development in North America.

“The rapid growth in shale gas production—currently 34 percent of total U.S. production—is one of the most significant energy developments in recent decades and is having a significant impact on the nation's economy in terms of stimulating job creation and economic growth,” said IHS Vice President John Larson, the lead author of the study. “This study further informs the discussion with a greater understanding of the economic potential from this vast American energy source.”

Among the study's key findings:

Shale gas had grown to 27 percent of U.S. natural gas production by 2010; it is currently 34 percent and will reach 43 percent in 2015 and more than double by 2035 to 60 percent

In 2010, the shale gas industry supported more than 600,000 jobs; by 2015 the total will likely grow to nearly 870,000 and to more than 1.6 million by 2035

Nearly $1.9 trillion in cumulative capital investments are expected to be made between 2010 and 2035

Annual capital expenditures, especially strong in the early years, will grow to $48.1 billion in 2015

The shale gas contribution to the U.S. gross domestic product (GDP) was more than $76.9 billion in 2010; in 2015 it will be $118.2 billion and will triple to $231.1 billion in 2035

Over the next 25 years, the shale gas industry will generate more than $933 billion in tax revenues for local, state and the federal governments

Savings from lower gas prices, as well as the associated lower prices for other consumer purchases, equate to an annual average addition of $926 in disposable income per household between 2012 and 2015, and increase to more than $2,000 per household in 2035 on an annual basis

The report’s findings reflect the dramatic impact of shale gas production in the United States. As recently as 2007, it was believed that the country would soon need to import large volumes of liquefied natural gas (LNG) for domestic consumption. Instead, shale gas production has more than doubled the size of the discovered natural gas resource in North America—enough to satisfy more than 100 years of consumption at current rates.

A key reason for the shale gas industry’s profound economic impact is its high “employment multiplier”—the indirect and induced jobs created to support an industry. For every direct job created in the shale gas sector, more than three indirect and induced jobs are created, a rate higher than the financial and construction industries, the report finds.

“Shale gas combines a capital-intensive industry with a broad domestic supply chain,” Larson said. “The United States is a leader in all parts of the shale gas industry which means that most of its suppliers are domestically based, and that means a larger portion of the dollars spent are supporting domestic jobs in trucking, steel fabrication, aggregates, heavy equipment manufacturing, hotels, and restaurants, among others.”

The study also found that shale gas and related jobs pay higher wages on average – currently $23.16 per hour – than those paid to workers in manufacturing, transportation and education.

The IHS Global Insight study measured the broader impact of lower natural gas prices, finding that over the 2010-2035 period prices on average would be at least two times higher absent shale gas production. This impact is even greater now and over the next few years when prices would have been two-and-a-half to three times higher. The lower natural gas prices have resulted in a 10 percent reduction in electricity costs nationally and that flows through the economy to lead to lower prices for many other consumer purchases.

Lower gas prices also boost the international competitiveness of domestic manufacturers, resulting in 2.9 percent higher industrial production by 2017 and 4.7 percent higher production by 2035.

“Absent the added supply from shale gas production, large volumes of LNG imports would be required and U.S. consumers would be paying European or even Asian prices which are two to three times what they are today here in the U.S.,” Larson said. “The benefits of that savings reverberate through the wider economy.”

The Economic and Employment Contributions of Shale Gas in the United States was commissioned by America's Natural Gas Alliance (ANGA). IHS Global Insight offers an independent assessment and is exclusively responsible for all of the analysis, content, and conclusions contained in the study.

In measuring the economic contribution of shale gas, the study fully "sized" the economic influence of the industry by capturing all the supply chain and income effects associated with shale gas activity in the U.S. The results of the production and capital expenditure profile analysis were integrated into a customized modeling approach developed by IHS Global Insight. This approach links Input-Output modeling techniques – similar to those used by the U.S. Department of Commerce and the Congressional Budget Office– with the dynamic modeling capabilities of proprietary IHS models to capture the industry's comprehensive contribution and impact on the economy. The results represent a conservative estimate as the study:

Constrained future production and capital expenditures by realistic market demand as well as technical and economic feasibility of developing shale gas plays.

Did not consider production or investment activities from additional gas plays that have yet to be discovered.

Independently evaluated each play to reflect regulatory environments in each region and adjusted production profiles to reflect little or no development if there was uncertainty as to regulation and access.

Did not consider the economic benefits accruing to the U.S. suppliers who are supplying the Canadian shale gas industry.

Did not quantify the job creation in industries that would refocus investment back to the United States (for instance, petrochemicals).

IHS Global Insight established the modern economic forecasting industry nearly 50 years ago and provides the most comprehensive economic and financial  information available on countries, regions, and industries, using a unique combination of expertise, models, data, and software within a common analytical framework. Among those who developed IHS Global Insight's expertise in this area was Nobel laureate in Economics Lawrence Klein.

IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape, including energy and power; design and supply chain; defense, risk and security; environmental, health and safety (EHS) and sustainability; country and industry forecasting; and commodities, pricing and cost. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 5,500 people in more than 30 countries around the world. IHS is a registered trademark of IHS Inc. All other company and product names may be trademarks of their respective owners. Copyright © 2011 IHS Inc. All rights reserved.

The Economic and Employment Contributions of Shale Gas in the United States 

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Kenya Youth Empowerment Project

The proposed Project Development Objective (PDO) is to support the Government of Kenya (GoK) efforts to increase access to youth-targeted temporary employment programs and to improve youth employability.

World Bank.Author: Wiseman,William David.Document Date: 2011/12/04. Document Type:Implementation Status and Results Report.Report Number:ISR4893

Kenya - Kenya Youth Empowerment Project : P111546 - Implementation Status Results Report : Sequence 05

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Labour Market in the West Bank

12 December 2011.UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).There was continued and moderate employment growth in the West Bank in the first half of 2011. Overall employment increased at a rate of 4.3 percent relative to first-half 2010 with the private sector accounting for more than 90 percent of growth and with construction activity responsible for 70 percent of private sector job gains. The public sector shed jobs in this period. Indicators suggest an acceleration in economic activity in first-half 2011 relative to second-half 2010.

Unemployment grew at an even more rapid pace—8.3 percent on a year-on-year basis—with the broad unemployment rate rising marginally from 21.7 percent to 22.4 percent as labour force growth continued to outpace employment growth. Despite employment growth, and a marginally higher work effort on the part of the employed persons, the purchasing power of average monthly wages declined by 2.8 percent in this period. The persistence of historically high levels of unemployment continued to depress average real wages in the West Bank.

Refugees, in general, fared less well than non-refugees. Non-refugee employment, in the year-on-year comparison, increased by 5.2 percent, with the number of unemployed non-refugees rising 7.5 percent. By contrast, refugee employment grew only 1.5 percent, while the number of unemployed among them rose by 10.3 percent. The average refugee unemployment rate in first-half 2011 was 27.4 percent, up from 25.5 percent in first-half 2010. In the same period, the non-refugee unemployment rate rose marginally from 20.4 percent to 20.9 percent. Average monthly wages in inflation-adjusted terms declined 2.3 percent for non-refugees and by 4.8 percent for refugees in this period. The average monthly non-refugee wage in real terms remained significantly higher than that of refugees.

A summary of trends in the West Bank labour market as a whole, and for refugees and non-refugees separately, is provided below. Section 1 provides overall findings regarding labour force participation, employment by sector and activity, unemployment and wages in the West Bank; Section 2 presents results for refugees and; Section 3 shows the findings for non-refugees.

The reference period is the first half of 2011. Sequential changes compare first-half 2011 with second-half 2010 and oftentimes includes significant seasonal fluctuations. Parallel changes compare first-half 2011 with first-half 2010 (a year-on-year comparison). The latter comparison largely eliminates seasonal fluctuations in the data.

Labour Market in the West Bank

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Democratic Republic of Congo.Emergency Social Action Project

The proposed Project Development Objective (PDO) is to support the Government of Kenya (GoK) efforts to increase access to youth-targeted temporary employment programs and to improve youth employability.

World Bank.Author: Mossige,Anne.Document Date: 2011/12/04.Document Type:Implementation Status and Results Report.Report Number:ISR5222

Democratic Republic of Congo Emergency Social Action Project : P086874 - Implementation Status Results Report : Sequence 17

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Honduras.Country partnership strategy for the period FY07-FY11:IEG review

This review examines the implementation of the FY07-10 Honduras Country Assistance Strategy (CAS), the FY08 CAS Progress Report (CASPR), the FY11 Interim Strategy Note (ISN), and evaluates the Country Assistance Completion Report (CASCR). The FY07-10 CAS was framed around four pillars. The objective under Pillar I was equitable growth for employment generation. This was to be achieved through the pursuit of a sustainable fiscal situation, strengthened competitiveness and effectiveness in the financial, energy, water and sanitation, telecoms, ports and roads sectors as well as the business environment, and increased rural incomes.

The objective under Pillar II was good governance through state modernization and civic participation. This was to be achieved through the pursuit of improved transparency and accountability in public spending, professionalization of key public sector functions and agencies, combating anti-competitive practices, decentralization, and improved access, efficiency and accountability in the judicial sector. The objective under Pillar III was environmental protection and risk management to be pursued through ensuring the viability of protected areas and reducing the impact of natural disasters. The objective under Pillar IV was development of human capital through improving the quality of basic education as well as the quality and coverage of basic health services, and strengthening social assistance and the capacity of Afro-Honduran and Indigenous groups to manage their development.

iii. The picture that emerges from this review of the Bank’s program in Honduras is that in a number of areas slow progress towards CAS objectives did take place, though often with delay: control of the public wage bill, access to water and sanitation, road maintenance, an integrated financial management system for the public sector, or disaster risk management. But in some major areas which are key for long term sustainable development, including fiscal sustainability through greater control of the public sector wage bill and of public subsidies, a professional civil service and improved education quality, limited or no progress was made. The picture could have been better if the strategy objectives had been adjusted properly to take into account the impact of the global financial crisis and the political turmoil on the implementation of the strategy. IEG rates the outcome of the program moderately unsatisfactory.

iv. IEG’s review of the results of the Bank’s program concludes that it is imperative that an effective dialogue with the government be maintained, building on recent progress. In Honduras there are major issues which have long been prime constraints to sustainable development yet have never been addressed effectively. They include, in particular, the fiscal burden of the public sector (especially teachers) wage bill and of energy sector subsidies, the lack of a professional civil service which, among others, impedes implementation of development programs, and the poor quality of education, which limits employment opportunities and thus also contributes to the growth of gangs and crime. In addition, IEG’s review concludes that CASPRs and ISNs are the opportunities to adjust the objectives of a strategy to what can realistically be expected when external shocks have a major impact on the strategy’s implementation and priorities. While, in the case of Honduras, the Bank was flexible and made an effort to adapt its strategy to changing country circumstances, especially with the ISN, objectives remained ambitious in light of the political economy of the country.

Document Date:  2011/11/22.Document Type: Country Assistance Strategy Document Number:65801.Volume No: 1 of 1

Honduras - Country partnership strategy for the period FY07 - FY11 : IEG reviewx

Follow-up of the first European Semester and thematic surveillance in employment and social policies.Council conclusions.

COUNCIL OF THE EUROPEAN UNION.3131st EMPLOYMENT, SOCIAL POLICY, HEALTH and CONSUMER AFFAIRS. Council meeting. Brussels, 1 and 2 December 2011.Welcomes the conclusions and analysis carried out by the Employment Committee in the report "Reaching the Employment target: progress and thematic surveillance" (see 17239/11) and as result of the first year of implementation of the European Employment Strategy in the context of Europe 2020 highlights the following: 1.1. 17.6 million new jobs need to be created in aiming to reach a 75% employment rate by 2020 in the European Union.

The EU as a whole and most Member States are likely to fall considerably short of their employment rate targets if no substantial policy change and incisive structural reforms take place. Alongside policies for increasing growth and improving general labour market conditions, this will require a sustained effort to stimulate job creation and encourage hiring, with a focus on the activation and labour market attachment of specific groups with particularly poor labour market outcomes such as low-skilled workers, women and older workers.

1.2. As identified in the Employment Performance Monitor (EPM) 20114, the high incidence of long-term unemployment, of youth unemployment and/or of young people neither in employment nor in education and training remains a challenge common to a majority of Member States. Resolute action is needed to increase the employability of the long-term and young unemployed, facilitating the transition between different employment statuses and from school to work.

1.3. Improving the labour market relevance, provision, adequacy and quality of education and training systems and addressing skills mismatches, both for young people and adults in and out of work, remains high on the reform agenda of almost all countries and is necessary to increase employment and productivity. Efforts need to continue to improve the accessibility to lifelong learning opportunities and the attractiveness of vocational education systems and apprenticeships schemes. On the long run, efforts should be made to up-skill the low skilled labour force so as to support upward transitions.

1.4. Tax and benefits systems should be reviewed to phase-out disincentives to women’s participation in the labour market. In particular, disincentives to employment of dual earner families or equal earners couples should be removed, well designed in-work benefits should be phased-in to diminish unemployment and inactivity traps and the transferability of allowances and joint elements of tax and benefits should be reviewed especially in the case of low-wage earners.

1.5. While labour demand depends on efficient macro and micro economic policies, measures to decrease non-wage labour costs such as targeted hiring subsidies or reduction of the tax wedge, taken in compliance to the Stability and Growth Pact, can have an important impact on labour demand of the low-skilled and young people.

1.6. Wage policies need to ensure that wages are in line with productivity, although other important determinants of competitiveness such as foreign external demand or innovation and technology have an equally important impact.

COUNCIL OF THE EUROPEAN UNION.3131st EMPLOYMENT, SOCIAL POLICY, HEALTH and CONSUMER AFFAIRS. Council meeting. Brussels, 1 and 2 December 2011

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Panamá.Public and Private coord. for the prom. of emp. and workforce development.

Contribute to raise labor productivity and employability, articulating the public-private institutionality to formulate, manage and monitor labor force investment, employment, and training promotion policies.

IDB.PN-T1082:Public and Private coord. for the prom. of emp. and workforce development

2011 OECD Employment Outlook

OECD. 2011. Unemployment remains stubbornly high in the OECD area with the latest economic forecasts suggesting job creation will remain anaemic in the near term, according to a new OECD report. The OECD’s latest Employment Outlook says that in mid 2011 the number of unemployed people in the OECD area had declined to just over 44 million, still more than 13 million higher than immediately before the crisis.

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“Of all the facets of the financial and economic crisis, high unemployment is the most visible manifestation of the challenge to restore sustained growth. This is the human face of the crisis,” said OECD Secretary-General Angel Gurría, launching the report in Paris. “Governments cannot stand still. The challenges of tackling high and persistent unemployment, improving job opportunities and ensuring adequate social safety nets should be at the top of the political agenda.” The risk of high unemployment becoming entrenched has increased with a steep rise in long-term joblessness. In the United States, the share of the unemployed who have been out of work for more than a year has tripled to a record high of over 30 per cent. In Spain it exceeds 40 per cent. Of the major OECD economies, only in Germany has long-term unemployment fallen.

Access the full data

Effective labour market policies can make a difference. Some OECD countries, including Australia, Japan, Korea and the Netherlands have managed to contain the increase in unemployment. Germany has actually reduced unemployment during the crisis.

“With public resources limited, the focus should be on cost-effective measures - such as well-designed hiring subsidies - and on the most vulnerable groups,” said Mr Gurría, citing as an example President Obama’s proposed American Jobs Act which would waive employer’s payroll tax for companies expanding their workforce.

Income support for the unemployed should be maintained or even reinforced where assistance is relatively low, difficult to access and where the long-term unemployed face a serious risk of falling into poverty and exclusion, the OECD says. But it is essential to combine income support with effective re-employment programmes to avoid benefit dependence. In emerging economies, the OECD recommends targeting income support to those who most need it and better integrating social protection programmes.

Helping young people must be a priority. In the first quarter of 2011, the unemployment rate for people aged 15 to 24 was 17.4 percent in the OECD area, compared with 7 percent for adults aged 25 and over. Targeting youth will reduce the risk of young people falling into long-term unemployment and losing touch with the job market.

“Tackling the large human cost of unemployment, especially for those youth who fail to get a permanent foothold in the labour market, must be a priority,” said Mr Gurría. “A better match must be achieved between the skills youth acquire at school and those needed in the labour market.”

Country findings are available for Australia, Canada, France, Germany,Italy, Japan, Korea, Mexico, Spain, the United Kingdom and the United States.

Read the Secretary-General's full speech.

2011 OECD Employment Outlook

Employment growth patterns in South Asia: some evidence from interim enterprise survey data

This paper analyzes firm growth patterns in South Asia, using establishment level data from an Interim Enterprise Survey. The survey was conducted by the World Bank in 2009 and 2010 and covers seven countries in the region.

The first finding suggests that size in the base year gains importance for employment growth and firm age is statistically insignificant for growth. This contradicts the thought that young and small firms are the bearers of growth. Second, establishments in larger localities expanded faster, confirming the observation of urban centers as growth poles.

Third, establishments in areas of severe conflict performed worse than establishments in other areas. Interestingly, the distribution of growth rates shows that both firm growth and fast-growing firms exist in conflict regions

Author: Friesenbichler, Klaus. Document Date: 2011/10/01.Document Type: Policy Research Working Paper Report Number:WPS5856.Volume No:  1 of 1  

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