Browse by: "2016"

This paper presents quantitative information on labour market flows for 25 OECD countries. It uses household surveys that offer the advantage of reporting monthly transitions between employment, unemployment and economic inactivity for individuals. Between 2005 and 2012, the annual probability of leaving employment averaged 10% across OECD countries. Jobless people have a 30% average probability of finding a job. The analysis uncovers significant cross-country differences and highlights key facts about how labour market flows differ depending on socio-demographic, worker characteristics and the institutional framework. Female, young, low educated and low income workers are at highest risk of becoming jobless. Young jobless individuals have higher chances of finding a job than their older counterparts. Female, low educated and low income jobless individuals face a lower probability of finding a job than others.

Fueled by a burgeoning population, urbanisation and income growth, West African food demand is rapidly transforming, with striking increases in total quantities demanded, growing preference for convenience, diversification of diets towards more perishable products, and an increased concern for product quality. These changes provide great opportunities for the West African food system to increase production, value added, job creation and food security. Yet a number of structural and policy constraints continue to threaten the ability of West Africa to seize these opportunities. This paper analyses the key drivers of change and their implications on the various demands facing the food system. It then looks at how different elements of the food system respond to evolving demands, discusses the constraints to more effective responses, and finally considers some policy implications and key recommendations, particularly in the context of the ECOWAS-led efforts to develop and implement more effective regional agricultural policies.

This paper provides evidence on the effects of the size and the composition of public spending on long-term growth and inequality. An estimated baseline convergence model captures the long-term effect of human capital and total investment on potential output for a panel of OECD countries. The composition of public spending added to this baseline provides evidence that certain public spending items (public investment and education) boost potential growth, while others (pensions and public subsidies) lower potential growth. There is also evidence that too large governments reduce potential growth, unless the functioning of government is highly effective. This paper also investigates the effect of public spending items on income inequality. Increasing the size of government, family benefits or subsidies decreases inequality. Reforms making the government more effective and an education reform that aims at encouraging completion of secondary education may also decrease income inequality. Simulations combining both growth and distributional effects illustrate that most reforms can deliver considerable growth gains and benefit the poor.

To what extent can public deficits increase without putting fiscal sustainability at risk, given the specific current macroeconomic situation of protracted low growth and low interest rates, combined with relatively high government debt levels? The answer depends on many factors, such as the state of the economy, the fiscal track record and projections of population ageing and their effect on government spending.
This paper makes use of three different approaches to better assess fiscal space, which can be defined in a broad manner as the extent to which public debt can increase. These approaches converge to a conclusion that there is fiscal space in most of the large advanced economies. There is also evidence that fiscal space may have risen in most OECD countries since 2014, mainly driven by the decrease in interest rates. Reforms to health and pension programmes would help to create additional fiscal space.

Reforms that boost growth by enhancing economic flexibility often meet strong opposition related to concerns that they may imply adverse consequences for categories of workers. This study investigates how making product or labour market regulation more flexible changes workers’ risks of moving out of employment and jobless people’s chances of becoming employed. To do so, it employs specially harmonised micro-level data covering individual workers in 26 OECD countries. The micro-econometric regressions reveal that labour market reforms do not uniformly influence transitions in and out of employment but that their effects vary depending on institutions and other policy settings. For instance, making employment protection of regular contracts more flexible is associated with more transitions into employment in countries that have above-average activation programmes. As for product market reforms, they are found to boost transitions into employment, especially for women, and to have no systematic effect on exits, so that overall they tend to boost aggregate employment, in line with earlier evidence. The micro-data show that workers with low earnings potential, who, already before reforms, experience much higher transition rates in and out of employment than other groups, face particularly strong increases in employment churn when product market regulations become more flexible. Additional micro-econometric analysis focusing on sectors subject to specific product market regulation (energy, transport, communication) reveals that workers employed in tightly regulated sectors typically earn more than their peers with similar characteristics working elsewhere. Taken together, the findings can help enhance reform design, in particular by highlighting the benefits of (a) policy packages drawing on complementarities between product and labour market reforms, (b) active labour market programmes that effectively support more vulnerable workers and (c) broad reforms over narrow compensation schemes.

Knowing who gains and loses from regulatory reform is important for understanding the political economy of reform. Using micro-level data from 26 countries, this paper studies how regulatory reform of network industries, a policy priority in many advanced economies, influences the labour market situation of workers in network industries. Estimates are identified from changes in a worker’s pay, industry-level employment flows and regulation over time. The main finding is that the regulation of network industries provides workers in this industry with a wage premium and higher employment stability relative to similar workers in other industries. Regulatory reform therefore tends to align labour income and employment stability in the reformed industry with those in other industries. Workers in the reformed industry lose out compared with others, because they no longer benefit from “excess” pay and employment stability.

Ease of entry is crucial to well-functioning electricity markets. This paper investigates the patterns of entry in the generation segment of the electricity industry of OECD countries and seeks to provide an understanding of their key determinants. It aims to derive implications for the design of policies aimed at spurring competition under significant renewable policy objectives. The analysis focuses on investments in renewable-based electricity generation in all OECD countries over the period 1990-2007. Hypotheses drawn from the literature are tested empirically with using a panel data set based on UDI’s World Electric Power Plant Database. Findings suggest that the likelihood and the volume of entry in renewable-based power generation technologies are significantly affected by industry regulation, renewable support policies, local structural industry characteristics, such as concentration, sectoral expansion and the share of renewable-based capacity already present in the host country. Finally, micro-level factors such as the size of the (parent) firm, its experience with renewables, and whether it is a utility company, are found to significantly affect firm-level investment and entry decisions.

Do flexibility-enhancing reforms imply more employment instability? Using individual-level data from harmonised household surveys for 26 advanced countries, this paper analyses the effects of product and labour market reforms on transitions in and out of employment. Results indicate that reforms making product markets more competitive increase transitions out of employment for less qualified and low-income workers. Less qualified and low-income workers have very high job exit rates to start with, and reforms raise these rates further. On the other hand, more pro-competitive product market regulation generally increases entry rates into employment. The concentration on less qualified and low-income workers of the increase in labour market turnover associated with product market reforms suggests a case for accompanying such reforms with labour market programmes that help the most vulnerable workers transition to new jobs. Easing employment protection for regular or temporary workers has no systematic long-term effect on workers’ probabilities to move in or out of employment. Such reforms can, however, affect employment transitions through their interaction with other policies and institutions. For example, easing employment protection for workers with regular contracts raises the job-finding chances of people out of work in countries that invest a lot in active labour market programmes. Furthermore, employment protection legislation and product market regulation are complementary in that, when either employment protection or product markets are lightly regulated, reforming the other is associated with fewer job exits.

To investigate how public finances could best be designed to promote long-run growth and address inequality, it is essential to have comprehensive, cross-country comparable data on government spending and revenues, along with structural and policy indicators. By identifying key variables of public finance across as many OECD countries as possible, and with a time series element to allow for longitudinal analysis, the OECD Public Finance Dataset provides a detailed data set to contribute to an evidence-based debate on shaping growth-enhancing and equality-promoting fiscal policies. Characteristics of both country groupings and individual country public finance profiles are highlighted as examples of the potential of these data to provide policy insights.

This paper exploits the rich dataset collected in the context of the 2014 Regulatory Indicators Survey to analyse how countries put in place the building blocks of their regulatory policy systems. It complements the 2015 OECD Regulatory Policy Outlook by systematically examining country practices in the areas of regulatory impact assessment, stakeholder consultation and ex post evaluation of regulations. In particular, it seeks to inform discussions about the sequencing of measures in implementing policy in these three areas, through the adoption of legal requirements, the development of appropriate methodology, the establishment of transparency mechanisms and of oversight and quality control. In order to provide concrete illustration and lay the ground for practical reform advice, the paper identifies groupings of countries around the emphasis they put on each of these tools.

This study explores the effectiveness of the incentive mechanisms embedded within the UK’s Funding for Lending Scheme (FLS) for banks’ to expand their supply of lending to medium sized enterprises (SMEs). The FLS was announced by the Bank of England and HM Treasury in June 2012, with the aim of improving the supply of credit to the UK real economy. Despite the prevailing low level of risk-free interest rates, UK banks’ funding costs were elevated at the time of the Scheme's introduction, and the intention was to provide lenders with a stable source of lower-cost funding to support credit provision to the real economy. The Scheme’s design built in direct incentives for banks to support lending to the real economy, by linking both the price and quantity of funding available through the Scheme to their lending performance. This paper looks for evidence of the effectiveness of these incentives, exploiting a modification of the Scheme’s design for its extension in April 2013 to help identify changes in credit supply from credit demand. Specifically, the change sharpened incentives to lend to SMEs, relative to larger ones. This facilitates using a difference-in-difference approach, exploiting bank-level data on UK banking groups, to look for a direct impact of incentives on credit supply, considering larger companies as a control group. On the basis of the available dataset, it is not possible to identify that this change in the incentive structure of the FLS directly boosted loan growth to SMEs, relative to large firms, between the extension of the Scheme and the end of 2013. The results seem robust to using different metrics of credit supply. However, the dataset is unavoidably small, both in terms of number of lenders covered and the length of the period after the modification of the design. More generally, reductions in lenders’ market funding costs since the FLS’ introduction may have lessened banks’ incentives to use draw on the Scheme, and so the impact of incentives within it.

In an era of heightened global interdependence and economic volatility, local policymakers face mounting pressure to fortify community resilience. As systemic shocks reverberate through local economies with increasing asymmetry, disparities in growth and labor markets deepen, exacerbating existing challenges like climate change and aging populations. Amidst decentralization trends and fiscal constraints, the lens of complexity science offers insights into resilience, illuminating the intricate dynamics of adaptive systems. Through multi-dimensional frameworks and strategic governance, policymakers navigate trade-offs and foster collaboration across sectors and government levels. Drawing from diverse models, this paper navigates the complexity of local resilience, offering pathways for coordinated action and sustainable development.

This paper examines the impact of tax and benefit systems on the incentives for second earners to enter formal employment. The paper highlights how various tax design features create greater participation disincentives for second earners than for primary earners or single individuals. As second earners in OECD countries are more often women, these greater disincentives create significant gender-equity concerns. As second earners are also typically highly responsive to work disincentives, these features are likely to negatively impact economic growth. These disincentives stem from a range of policies including the choice of family-based rather than individual-based taxation, the use of dependent spouse tax credits and allowances, and the use of tax credits and benefits based on family rather than individual income. Reform options to address these issues will depend on countries’ existing tax policy design choices. For countries where individual-based taxation is combined with some family-based provisions, reform of these family-based provisions to lessen their impact on second earner work disincentives may be warranted. For countries with family-based tax systems, the introduction of some individual-based provisions could be considered to mitigate the negative effects of family-based taxation on second earner work incentives.

The 2030 Agenda for Sustainable Development with the Sustainable Development Goals at its core calls to “(…) increase aid-for-trade support for developing countries, in particular least developed countries.” This call echoes a similar appeal in the Addis Ababa Action Agenda of the Third International Conference on Financing for Development. In response, the OECD Action Plan on the Sustainable Development Goals: Better Policies for 2030 also argues for further promoting aid for trade and ensuring that it supports the achievement of the Sustainable Development Goals. This paper discusses how aid for trade can contribute to these goals. It argues that the Aid-for-Trade Initiative already takes an integrated and multi-dimensional approach to promoting trade, economic growth and poverty reduction. Aid-for-trade programmes are critical to turn trade opportunities into trade flows, but more is needed to make trade an engine for green growth and poverty reduction for both men and women. International companies are already increasing their financial and technical contribution to building trade-related capacities in developing countries. Strengthening private sector engagement further could be achieved by expanding platforms for project-based collaboration that create multi-stakeholder value. Such approaches will better facilitate trade for development and strengthen the contribution of aid for trade to the 2030 Sustainable Development Agenda.

"¿Qué es importante que los ciudadanos sepan y sean capaces de hacer?". En respuesta a esa pregunta y a la necesidad de disponer de datos comparables a escala internacional sobre el rendimiento de los estudiantes, la Organización para la Cooperación y el Desarrollo Económico (OCDE) puso en marcha la encuesta trienal de estudiantes de 15 años de todo el mundo conocida como Programa para la Evaluación Internacional de Alumnos, o PISA. PISA evalúa en qué medida los estudiantes de 15 años, cerca del final de su educación obligatoria, han adquirido conocimientos y habilidades clave que son esenciales para la plena participación en las sociedades modernas. La evaluación se centra en las materias escolares básicas de ciencias, lectura y matemáticas. También se evalúa la competencia de los alumnos en un ámbito innovador (en 2015, este ámbito es la resolución colaborativa de problemas). La evaluación no se limita a determinar si los alumnos son capaces de reproducir conocimientos, sino que también examina en qué medida son capaces de extrapolar lo que han aprendido y de aplicar esos conocimientos en entornos desconocidos, tanto dentro como fuera de la escuela. Este enfoque refleja el hecho de que las economías modernas recompensan a los individuos no por lo que saben, sino por lo que pueden hacer con lo que saben.

Over the past decade, the OECD Programme for International Student Assessment, PISA, has become the world’s premier yardstick for evaluating the quality, equity and efficiency of school systems. This special issue of the PISA in Focus series highlights the results of the first two volumes of the PISA 2015 initial report: Excellence and Equity in Education; and Policies and Practices for Successful Schools.

Le Programme international de l’OCDE pour le suivi des acquis des élèves (PISA) est devenu la référence mondiale dans le domaine de l’évaluation de la qualité, de l’équité et de l’efficience des systèmes d’éducation. Cette édition spéciale de la série PISA à la loupe présente les résultats des deux premiers volumes du rapport initial de l’enquête PISA 2015 : L’excellence et l’équité dans l’éducation; et Politiques et pratiques pour des établissements performants.

„Was sollten Bürger wissen und können?“ Basierend auf dieser Fragestellung und dem Bedarf an international vergleichbaren Daten zu Schülerleistungen legte die Organisation für wirtschaftliche Zusammenarbeit und Entwicklung (OECD) die Internationale Schulleistungsstudie PISA (Programme for International Student Assessment) auf, die im Dreijahresturnus unter 15-jährigen Schülerinnen und Schülern weltweit durchgeführt wird. In der PISA-Studie wird evaluiert, inwieweit 15-jährige Schülerinnen und Schüler gegen Ende ihrer Pflichtschulzeit wichtige Kennt nisse und Kompetenzen erworben haben, die für eine volle Teilhabe am Leben moderner Gesellschaften unerlässlich sind. Die Erhebung konzentriert sich auf die Kernunterrichtsfächer Naturwissenschaften, Lesekompetenz und Mathematik. Zusätzlich wird die Kompetenz der Schülerinnen und Schüler in einem innovativen Bereich getestet (2015 handelte es sich um den Bereich Problemlösen im Team). In der Erhebung wird nicht nur geprüft, ob die Schülerinnen und Schüler das Gelernte wiedergeben können, sondern es wird auch untersucht, wie gut sie ausgehend vom Gelernten extrapolieren und ihr Wissen in ungewohnten Situationen – sowohl im schulischen als auch im außerschulischen Kontext – anwenden können. Diesem Ansatz liegt die Feststellung zugrunde, dass in modernen Gesellschaften nicht Wissen an sich entscheidend ist, sondern die Fähigkeit, dieses Wissen anzuwenden.

Work-based learning can provide a bridge into careers and its potential benefits are particularly noticeable for youth at risk – those most likely to face difficulties in accessing jobs and learning opportunities. If this potential is to be fully realised, work-based learning programmes must be attractive to employers. Achieving this requires a closer look at the costs and benefits for employers when they offer work-based learning. This paper looks at tools designed to help get employers on board for work-based learning, with an emphasis on work-based learning for youth at risk. International experience suggests that financial incentives, such as subsidies and tax breaks are not the answer. Attention should be focussed instead on non-financial measures that improve the cost-benefit balance of apprenticeship to employers. These include adjusting key parameters of apprenticeship schemes, better preparing youth at risk for apprenticeship and providing support (e.g. remedial courses, mentoring) to youth at risk during apprenticeship.