Browse by: "2024"

This paper discusses recent developments in Artificial Intelligence (AI), particularly generative AI, which could positively impact many markets. While it is important that markets remain competitive to ensure their benefits are widely felt, the lifecycle for generative AI is still developing. This paper focuses on three stages: training foundation models, fine-tuning and deployment. It is too early to say how competition will develop in generative AI, but there appear to be some risks to competition that warrant attention, such as linkages across the generative AI value chain, including from existing markets, and potential barriers to accessing key inputs such as quality data and computing power. Several competition authorities and policy makers are taking actions to monitor market developments and may need to use the various advocacy and enforcement tools at their disposal. Furthermore, co-operation could play an important role in allowing authorities to efficiently maintain their knowledge and expertise.

In today's world, the digital landscape plays a crucial role in children's lives, offering opportunities for education, socialising and entertainment. However, it also poses risks such as cyberbullying, exposure to inappropriate content and breaches of privacy. There are also concerns that excessive screen time can impact children's social and emotional development, leading to debates about the quality of their interactions. Recent findings from the PISA survey further highlight a negative correlation between leisurely digital device use at school and academic performance. This OECD brochure “Students, digital devices and success” collates the latest research on digital devices and education from across the OECD’s Directorate for Education and Skills to support countries efforts to set policies in this area

Recent global developments, and a number of serious crises, have led to large government interventions in many jurisdictions, driving a debate on whether there is a need to rethink the role of industrial policy in modern economies. This paper explores how to use industrial policy and make it pro-competitive. Competition authorities can play a crucial role in strengthening the impact of industrial policy: by ensuring that competition principles remain a cornerstone of carefully designed industrial policy. Moreover, competition enforcement keeps markets more competitive, laying a good foundation for industrial policy.

Competition authorities have already acquired significant knowledge about the concept of market power and dominance as well as practical experience when assessing anticompetitive practices. However, the introduction of potential new concepts, such as economic moats and entrenchment, may complicate this analysis and further blur the lines between lawful and unlawful practices. This paper discusses the relation between economic moats and entrenchment with market power and calls for further reflections among competition authorities and practitioners on the challenges these concepts may pose. It explores several possible options, including incentivising the use of investigative and analytical techniques, as well as strengthening regulatory tools.

Employment has recovered strongly from the COVID-19 pandemic despite large structural changes in labour markets, such as the widespread adoption of digital business models and remote work. We analyse whether the pandemic has been associated with labour reallocation across occupations and triggered mismatches between occupational labour demand and supply using novel data on employers’ job postings and jobseekers’ clicks across 19 countries from the online job site Indeed. Findings indicate that, on average across countries, the pandemic triggered large and persistent reallocation of postings and clicks across occupations. Occupational mismatch initially increased but was back to pre-pandemic levels at the end of 2022 as employers and workers adjusted to structural changes. The adjustment was substantially slower in countries that resorted to short-time work schemes to preserve employment during the pandemic.

The consumption of products, services and transportation has significant environmental consequences and account for the majority of global greenhouse gas emissions. Meanwhile, demand-side policy measures have the potential to reduce the environmental footprint of these activities by up to 40-70%. This Policy Paper draws on the OECD’s recent household survey on environmental policy and behavioural change to provide insights and policy recommendations for specific measures that can encourage more sustainable household consumption of energy, transport and food as well as more sustainable waste practices. The report was prepared in support of Japan’s 2023 G7 presidency.

The regulation of occupations is widespread, extending beyond the liberal professions, such as lawyers and engineers, to a broader set of other economic activities. Competition authorities have long been active in improving competition in these markets, both through enforcement action and by advocating to make regulation more pro-competitive. This paper aims to support competition authorities’ advocacy efforts. It includes an overview of the literature about the effects of regulation of professional services, which competition authorities can draw on to advocate for the benefits of less restrictive regulation where appropriate. The paper also brings together analytical frameworks developed by the OECD and jurisdictions such as Australia, the US and EU to assess regulatory barriers to competition. The paper further draws on case studies of advocacy efforts from competition authorities across a range of OECD member countries.

This paper explores the state of teenage career development in England. It sets out findings from the 2022 round of the OECD Programme for International Student Assessment (PISA), a comparative international survey of young people in secondary education. PISA 2022 provides considerable data related to young people’s engagement in, and perceptions of, career development, including information on occupational and educational intentions and participation in career development activities. This paper compares student responses in England to OECD averages, disaggregated by a range of student characteristics, including gender, socio-economic background, academic proficiency and school type attended. This comprehensive analysis finds that in many ways student career development in England compares well with many other OECD countries, particularly countries identified as providing most relevant comparisons. However, analysis of longitudinal cohort studies show that students in England and across the OECD fail to engage sufficiently in career development by the age of 15. In England, students from lower socio-economic backgrounds engage less consistently in career development than their more socially advantaged peers. As in many countries, low performing students in England demonstrate forms of career development that raise particular concerns. The career expectations of all students align poorly with patterns of labour market demand.

This report outlines results from the initial pilot-testing of a Scorecard to assess the enabling environment for investment in water security, referred to as "the Scorecard”. Developed in collaboration with the Asian Development Bank and partners, the Scorecard aims to identify conditions for attracting and maintaining investment in water security. The report outlines the Scorecard's rationale, scoring methodology, and presents its main components. It also provides results from seven Asian countries, namely, Bangladesh, Mongolia, Nepal, Pakistan, the Philippines, Uzbekistan, and Sri Lanka. Armenia's findings from a subsequent Eastern European pilot test are also incorporated. This is the first in a sub-set of working papers within the Environment Working Paper series presenting research on the enabling environment for investment in water security. It marks the beginning of a process to apply the tool and support policy reforms. The report refrains from offering policy recommendations, focusing on testing the scorecard's ability to assess conditions to attract and sustain investing in water security. For an illustration of country-specific policy recommendations, please refer to the forthcoming Environment Working Paper “Enabling environment for investment in water security: Pilot test in the EU’s Eastern Partner Countries - Armenia case study”.

On the road to the 10th anniversary of the OECD Principles on Water Governance, the Handbook of What Works aims to further drive their implementation at sub-national level (e.g. municipal, regional and basin) through a compilation and analysis of evolving water governance practices. Building on a compendium of 52 water governance practices, the Handbook illustrates how cities, regions and basins in both OECD member and non-member countries have designed and implemented effective, efficient and inclusive water governance systems. It identifies common pitfalls to be avoided when designing and implementing water policies across levels of government, draws lessons from both successful and challenging implementations of each Principle and highlights the potential for replication of these practices to other contexts.

By 2030, between five and twelve Small Island Developing States (SIDS) could lose eligibility to – i.e. graduate from – official development assistance (ODA) as they reach high-income status. Unless other sources of finance effectively fill the gap left by their high dependence on ODA, those SIDS may suffer socio-economic setbacks and be worse-off after graduation. This may have broad negative consequences, given their geostrategic importance and role in the preservation of oceans and biodiversity. To help SIDS “graduate to success”, donors should use multidimensional vulnerability indices (MVIs) to better tailor their support, and engage with them through new graduation strategies.

This paper details the methodology used to nowcast the growth rate of the information and communication technology (ICT) sector in the "The growth outlook of the ICT sector" chapter of the OECD Digital Economy Outlook 2024, Volume 1. In an era of rapid digital transformation, innovative data sources for economic measurement are crucial. Internet search data have gained prominence for tracking real-time economic activity. This paper details a nowcasting model that leverages Google Trends data to provide policymakers with timely, up-to-date and comparable data on the economic growth of the ICT sector. Having timely data on ICT sector performance is essential to evaluating the effectiveness of sector-related policies. By addressing data challenges and employing a data-driven approach, this paper advances economic measurement of the digitalisation of the economy and provides insights into ICT sector growth dynamics.

In diesem Bericht wird erläutert, warum es erforderlich ist, das Finanzkompetenzniveau der Menschen in Deutschland zu steigern und eine nationale Finanzbildungsstrategie einzuführen. Er geht auf verschiedene Finanzkompetenzniveaus ein und beschreibt die direkt an der Förderung der Finanzkompetenz beteiligten Akteure sowie die derzeit auf Bundes-, Landes- und kommunaler Ebene umgesetzten Finanzbildungsinitiativen. Außerdem enthält er Empfehlungen für die Gestaltung der nationalen Strategie.

The report presents the rationale for increasing the financial literacy levels of individuals in Germany and for the adoption of a National Strategy for Financial Literacy. It describes financial literacy levels, the actors directly involved in promoting financial literacy and the ongoing financial literacy initiatives at the federal, state and local levels. It provides policy recommendations for the design of the National Strategy.

Rural regions across the OECD depend on a wide range of economic engines for growth, as well as the quality of place to attract and retain people. Social innovation seeks new answers to social and environmental problems, using new solutions that improve the quality of life for individuals and communities. Social innovation can be a tool to create vibrancy in rural areas by filling public service gaps, experimenting with new business models, and creating a stronger sense of community. However, not all rural areas are equally equipped to engage in social innovation. This paper provides guidance for policy makers and proposes an approach alongside a dashboard of indicators for measuring readiness and capacity to engage with social innovation in rural areas.

This report addresses the importance of dividend policies for jurisdictions with profitable or potentially profitable state-owned enterprises (SOEs), against the background of current challenges in public finances and increasing pressures on SOEs to contribute revenues to the public purse. It explores how, and subject to what criteria, state-owners decide how much profit to distribute versus retain for future investments in commercially oriented SOEs where the state is a major shareholder. The report further attempts to establish good practices for dividend policies, and offers guidance to support state ownership entities in setting such policies.

Mexico is well integrated into global value chains (GVCs). Its exports as a share of GDP have tripled since 1988. Mexico’s participation in GVCs is mainly driven by backward linkages, i.e. the share of foreign value added in Mexico’s total exports is large, which reflects Mexico’s importance in assembling processes in some manufacturing sectors. Conversely, forward participation, i.e. to what extent trading partners exports incorporate Mexico’s value added, remains low. Ongoing nearshoring trends provide opportunities to strengthen and improve Mexico’s participation in GVCs, and to move up in the value chain and develop stronger forward linkages, which are associated to higher productivity growth. This paper zooms into the most recent developments to assess whether Mexico is already benefiting from these trends. The empirical analysis suggests that Mexico’s wide trade agreements and low tariffs, will help, but improving the business environment and the rule of law, a better educated workforce, or increasing female labour participation would also facilitate deepening forward GVCs linkages.

Switzerland has shown remarkable strength during past economic downturns. A comprehensive risk planning and monitoring system, as well as essential-goods stockpiles has effectively bridged temporary supply disruptions. Yet, rising geopolitical tensions and a global shift towards protectionism pose significant challenges for the Swiss economy. To raise its resilience and productivity, Switzerland should refrain from relying on distortive industrial policies or trade restrictions, and rather continue to commit to international trade and cooperation, strengthen ties with key trading partners and enhance domestic competition. Resuming negotiations with the EU is key to safeguard access to the single market and deepen the economic partnership. Reducing trade barriers and lowering the administrative burden could reduce trade costs, which would allow companies to diversify supply chains while raising productivity.

Climate change mitigation policies affect the allocation of workers on the labor market: jobs in high-polluting industries will contract, while jobs in the “green” sector will grow. A just transition in the labour market requires policies to improve the allocation of workers and their deployability, for instance towards performing green tasks; as well as to manage and minimise scarring effects associated with job losses in polluting industries. Using an econometric analysis, this paper investigates the role of structural and policy factors in shaping a number of relevant labour market transitions, uncovering heterogeneity across different groups of workers. Education is the most important individual-level driver of transitions from non-employment to green jobs, with a particularly strong effect from graduating in scientific fields for young people entering the labour market. Women are significantly less likely than men to move into green jobs out of non-employment. Workers employed in high-polluting occupations face higher displacement risks than other workers, but this does not translate into higher long-term unemployment risks. In terms of policies, the paper finds that the labour market implications of the greening economy can be addressed by general structural policies favouring labour market efficiency in terms of workers’ reallocation, labour market inclusiveness in terms of promoting equality of opportunities and minimising long-term scars. Results also suggest that place-based policies are needed to mitigate scarring effects for displaced workers.

Continuing the recent fall in income inequality and poverty will necessitate stepping up efforts to both address pressing social issues and bolster economic growth. Redoubling efforts to improve education outcomes would help Mexicans gaining the skills needed to participate in an evolving job market and boost Mexico’s growth potential. Mexico has much to gain from closing gender participation gaps, as it would lead to stronger growth overall and to a more equitable distribution of income and opportunities. Reducing informality would not only ensure greater job security and social protection for workers but also stimulate economic growth.