1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Lifting labour supply to tackle tightness in the Netherlands

The Dutch labour market is strong but very tight. The unprecedently fast recovery from the pandemic, fast-changing skill demand, low hours worked, and the segmentation of the labour market contribute to labour shortages, weighing on growth potential and jeopardising the green and digital transitions. To tackle shortages, lifting labour supply is a necessary complement to raising productivity, as labour-saving innovation alone is unlikely to significantly reduce overall labour demand. Lowering the effective tax rate on moving from part-time to full-time employment and streamlining income-dependent benefits while improving access to childcare would both increase labour input and reduce gender inequalities in career prospects, incomes, and social protection. Narrowing regulatory gaps between regular and non-standard forms of employment further would alleviate shortages by facilitating transitions between occupations. Better integrating people with a migrant background and easing medium-skill labour migration in specific occupations would help to fill vacancies, especially those related to the lowcarbon transition. Scaling up the individualised training scheme while ensuring quality and providing stronger incentives for co-financing by employers would boost the supply of skills and promote growth in expanding industries. Rewarding teachers in schools where shortages are significant and facilitating mobility between vocational and academic tracks would improve equality in education and better prepare the future workforce.

English

Keywords: the Netherlands, labour migration, gender, labour supply, labour market segmentation, tax-benefits system, education, labour shortages, lifelong learning
JEL: J16: Labor and Demographic Economics / Demographic Economics / Economics of Gender; Non-labor Discrimination; J20: Labor and Demographic Economics / Demand and Supply of Labor / Demand and Supply of Labor: General; J42: Labor and Demographic Economics / Particular Labor Markets / Monopsony; Segmented Labor Markets; M53: Business Administration and Business Economics; Marketing; Accounting; Personnel Economics / Personnel Economics / Personnel Economics: Training; I28: Health, Education, and Welfare / Education and Research Institutions / Education: Government Policy; J60: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Mobility, Unemployment, Vacancies, and Immigrant Workers: General
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