The OECD Employment Outlook provides an annual assessment of key labour market developments and prospects in OECD member countries. Each edition also contains several chapters focusing on specific aspects of how labour markets function and the implications for policy in order to promote more and better jobs. This year’s chapters cover a comparison of labour market performance in different countries in terms of the quantity and quality of job and inclusiveness, the policy determinants of labour market resilience following the 2008 economic crisis, an assessment of how technology and globalisation are transforming the labour market, and a rich description of collective bargaining in OECD countries.

2016 was a paradoxical year for employment policy. While an expanding majority of OECD countries had finally closed the massive jobs gap that opened during the Great Recession and unemployment continued to fall, people in a number of countries expressed increased dissatisfaction with economic performance and, in some of them, clearly indicated they did not believe that policy makers were effectively representing their interests. While the Great Recession left deep scars in many countries, the economic discontent also centres on the perception that deeper international economic integration disadvantages many workers while offering the lion’s share of the benefits to large corporations and a cosmopolitan elite. The perception that the international economic system is “rigged” clearly challenges the democratic legitimacy of current policies and thus needs to be taken seriously. It also challenges the policy advice offered by international organisations like the OECD, which has long emphasised the economic benefits of global integration, but only recently adopted an inclusive growth approach that pays due attention to the distribution of those benefits across the population. In view of the current scepticism about the policy orthodoxy, this editorial begins the process of reassessing which choices labour market policy makers have got more or less right and which they have got wrong and where a change of approach is required. These reflections are intended to contribute to the broader rethinking of the full range of economic policies that is currently underway at the OECD and elsewhere.

While an expanding majority of OECD countries have finally closed the massive jobs gap that opened during the Great Recession of 2008-09, people in a number of countries are expressing rising dissatisfaction with core economic policies, including the promotion of international trade and investment. The populist backlash against globalisation challenges the policy advice offered by international organisations like the OECD, which have long emphasised the benefits of global integration. In view of the growing scepticism about policy orthodoxy, it is important to reassess economic policy stances, including which choices labour market policy makers have got more or less right and which they have got wrong and where a change of approach is required. While a definitive assessment is not yet available, it is already clear that many of the concerns underpinning the backlash against globalisation and trade are real and that they highlight areas where employment, skills and social protection policies need to be reinforced and adapted to a changing economic environment.

This chapter develops a framework for assessing labour market performance and applies it to OECD countries and a number of emerging economies. The framework is multi-dimensional and is intended to help guide the reassessment and updating of the OECD Jobs Strategy. The framework covers not only the quantity and quality of jobs, but also different aspects of labour market inclusiveness, a topic that has received less attention from researchers. After a short review of the key indicators of the quantity and quality of jobs, the chapter analyses the measurement of labour market inclusion in much greater detail. In particular, three complementary indicators of different aspects of inclusiveness are proposed, namely, the low income rate for the working-age population, the gender gap in labour income, and the employment gaps for five disadvantaged groups. The performance of a number of countries shows that it is possible to do well in creating more and better jobs that benefit all segments of society.

The chapter provides an overview of labour market resilience in the wake of the Great Recession of 2008-09 and the role played by macroeconomic and structural policies. The OECD unemployment rate has returned to close to its pre-crisis level, but the unemployment cost of the Great Recession has nonetheless been very large and long-lasting in many countries. Moreover, as the recovery in output has been weak relative to the recovery in employment, labour productivity and wage growth remain low. Labour market resilience depends crucially on macroeconomic and labour market policy settings. Macroeconomic policies are highly effective in limiting employment declines during economic downturns and preventing that cyclical increases in unemployment become structural. Spending on active labour market policies needs to respond strongly to cyclical increases in unemployment to promote a quick return to work in the recovery and preserve the mutual-obligations ethos of activation regimes. Overly strict employment protection for regular workers reduces resilience by promoting the use of temporary contracts and slowing job creation in the recovery. Co‐ordinated collective bargaining systems can promote resilience by facilitating wage and working-time adjustments.

This chapter documents the impact of two megatrends, technological progress and globalisation, on OECD labour markets over the past two decades, with a focus on the process of job polarisation and de-industrialisation. As both of these phenomena are associated with severe disruption in workers’ lives and rising inequality, they have given rise to growing concerns and uncovering their root causes is of fundamental importance for policy. The chapter begins by presenting key indicators of technology diffusion, participation in global value chains and international trade, and up-to-date evidence on job polarisation. It then analyses the relationship between polarisation and de-industrialisation, and employs econometric techniques to assess the impact of technology and globalisation on these phenomena. Technology displays the strongest association with both polarisation and de-industrialisation. The role of globalisation is less clear-cut, but there is some indication that international trade has contributed to de-industrialisation. Based on this evidence, the chapter outlines the key policy tools to help workers to successfully navigate the ongoing transformation of the labour market and reap the benefits of technological progress.

This chapter presents a comprehensive and up-to-date review of collective bargaining systems across OECD and a selected group of emerging economies that are in the process of accession to the OECD. It provides comparable estimates of membership to trade unions and employer organisations as well as collective bargaining coverage by country, sector, and firms’ and workers’ characteristics. The rules and uses of extension devices which allow the reach of collective agreements to extend beyond signing firms and union members are described, as well as those governing the duration of collective agreements. The chapter assesses the degree of centralisation, the articulation between different bargaining levels and how derogations and opt-out clauses are used. The various modes and degrees of bargaining co-ordination are also discussed together with the level of contract enforcement and the quality of labour relations. In addition, the chapter describes the types of worker representation at firm level and compares the various bargaining systems along the key parameters identified.

The statistical annex is available at