Future of work and present-day social protection Trends and challenges in the OECD area

Transcription

1 Queen s International Institute on Social Policy Inclusive economy, inclusive society: Canadian social policy in an age of disruption Kingston, Ontario, Aug 16-18, 217 Future of work and present-day social protection Trends and challenges in the OECD area Herwig Immervoll Senior Economist, Head of Employment-oriented Social Policies Directorate for Employment, Labour and Social Affairs Herwig.immervoll@oecd.org

2 Outline of the talk Future of work Present-day social-protection challenges 1. Redistribution: Income support that benefits families in need 2. Social protection and the cycle: Cushioning income shocks in households and the economy 3. Activation and employment support: Responding to people s employment barriers

3 Non-standard employment is not marginal, new, or a thing of the future OECD Average 215, % of total employment Self-employment Part-time employment Temporary employment (% of total employment) (% of dependent employees)

4 Non-standard employment is not marginal, new, or a thing of the future Part-time employment as a % of total employment Self-employment as a % of total employment Temporary work as a % of employees

5 The platform economy remains small but it may be growing fast New and filled platform vacancies May 216 to May day moving average, May 216=1 3% 5%.5% New Filled 1% May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Source: Kässi, O. & Lehdonvirta, V. (216), Online Labor Index.

6 Workers or widgets? We still know very little about platform work hoice? How long? Primary or supplementary? Earnings? Who? What? Job (task?) quality Rank and yank?

7 Automation: Les robots arrivent! 25 Estimated global provision of new industrial robots 2 ' d unités Source: World Robotics,

8 Technological progress: a force of nature or reflecting social and economic decisions? Adoption of new technology is not inevitable: In which areas is the application of robots most/least acceptable? 6 Areas of robots usage index Source: Eurobarometer.

9 but also long-term rise in employment Évolution du ratio emploi-population Pourcentage de la population en âge de travailler, % Source: Statistiques OCDE. 9

10 Fears about massive technological unemployment may be exaggerated 9% of jobs are at high risk of automation in G2 countries 5% 45% Jobs at high risk of automation Jobs at risk of significant change 4% 35% 3% 25% 2% 15% 1% 5% % Source: Arntz, Gregory and Zierahn, 216. However, many jobs will experience significant change!

11 What policy response? Skills Social dialogue Social protection & employment support

12 What policy response? Skills Social dialogue Social protection & employment support

13 Non-standard workers are more likely to slip through the (social safety) net Self-employed: Statutory access to social protection Finland Sweden Denmark Spain United Kingdom Germany Netherlands France Italy Canada Old age Invalidity Parental benefits Sickness benefits Accidents at work Sources: EU: Spasova et al. (217), Canada: OECD (215), In it together: Why less inequality benefits all. Unempl. benefits

14 Options for improving coverage in the new labour market Fix it? Reduce abuse and misclassification of workers Adapt access rules to changing work patterns: Statutory access Effective access Supplementary measures to limit coverage gaps Replace it? A Basic Income for everyone Simple, no one left behind Less paternalistic, stigma Individual insurance / accounts More individual autonomy in how they are used Is replacing existing social assistance and insurance realistic? Costs Winners & losers

15 Replacing social protection as we know it? Some innovative pilots of different forms of a basic income But, a budget-neutral unconditional BI would likely be well below the poverty line Monthly BI GBP 23 Poverty line for single person GBP 72 Poverty, UK working-age families 2% 1% % With existing benefits With a basic Income and there would be many gainers and losers (here: UK) Percentage losing Percentage winning Income group Source: OECD (217), Basic income as a policy option: Can it add up?

16 Future of social protection: Lessons from the past? Long-term rise in inequality (disposable income) Source: OECD Income Distribution Database, 16

17 Poverty risks tend to be greatest for children and working-age groups Total poverty rate = 1 OECD average Relative poverty rate of the entire population in each year = 1, mid-198s to 214 or latest available year Mid-198s Mid-199s / Total poverty rate = 1 Canada Mid-198s Mid-199s Below Above 75 Below Above 75 Note: OECD average: unweighted for 18 OECD countries: Canada, Denmark, Finland, France, Germany, Greece, Israel, Italy, Japan, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Sweden, Turkey, the United Kingdom, the United States. Source: OECD Income Distribution Database (via * Information on data for Israel:

18 Present-day challenge #1: Cash support can be patchy, weakly targeted to the poor Transfers received by working-age individuals in low and high-income households 213 or latest year available % of average transfer Poorest 2% Richest 2% Notes: Age group 18-65, in France. Public social cash transfers at the household level, adjusted for household size. Income groups refer to disposable incomes. Additional data provided by France show that, without counting old-age and disability pensions, the bottom 2% in France receive about three times as much as the top 2%. Source: OECD (217), Basic income as a policy option: Can it add up?, using OECD Income Distribution Database.

19 Present-day challenge #1: Cash support can be patchy, weakly targeted to the poor Pseudo coverage rates: Benefit recipients relative to no. of unemployed 214 or latest year available 14 Unemployment insurance Unemployment assistance Sources and notes: See OECD Social Benefits Recipients Database (SOCR) via

20 Present-day challenge #2: Crisis proofing Large parts of SP are designed to be responsive to changing social and economic conditions Change in employment and working-age social spending: boom and recession "Post-crisis" change 27/8 to 211/12 5 Change in public social spending, % IRL ESP GRC LVA USA SVN EST DNK SVK OECD FIN FRA CAN HUN Public social spending excluding health, old-age and survivors pensions. Source: OECD Reviews of Labour Market and Social Policies: Latvia 216, dx.doi.org/1.1787/ en using OECD Social Expenditure Database (SOCX) Change in employment rate, %

21 Present-day challenge #2: Crisis proofing Large parts of SP are designed to be responsive to changing social and economic conditions Change in employment and working-age social spending: boom and recession "Post-crisis" change 27/8 to 211/12 "Pre-crisis" change 23/4 to 27/8 5 Change in public social spending, % IRL ESP GRC USA SVK SVN EST DNK OECD FIN FRA LVA CAN HUN USA FIN FRA DNK SVK OECD SVN Public social spending excluding health, old-age and survivors pensions. Source: OECD Reviews of Labour Market and Social Policies: Latvia 216, dx.doi.org/1.1787/ en using OECD Social Expenditure Database (SOCX) Change in employment rate, %

22 Present-day challenge #2: Crisis proofing yet spending is frequently pro-cyclical or does too little to stabilise household incomes or the economy Change in employment and working-age social spending: boom and recession "Post-crisis" change 27/8 to 211/12 "Pre-crisis" change 23/4 to 27/8 5 Change in public social spending, % IRL ESP GRC LVA USA SVN EST DNK IRL SVK ESP HUN GRC SVK OECD FIN OECD FRA CAN CAN USA FIN SVN FRA DNK HUN EST LVA Public social spending excluding health, old-age and survivors pensions. Source: OECD Reviews of Labour Market and Social Policies: Latvia 216, dx.doi.org/1.1787/ en using OECD Social Expenditure Database (SOCX) Change in employment rate, %

23 Present-day challenge #2: Crisis proofing Weak support following downturns may be one factor behind growing inequalities Longer-term trends at different points in the income spectrum Market incomes, working-age households, constant prices, 1979=1 2 United Kingdom 8 th percentile 15 5 th percentile th percentile Source: OECD (214), The crisis and its aftermath: A stress test for societies and for social policies. dx.doi.org/1.1787/soc_glance-214-en.

24 Present-day challenge #3: Employment support. Tailor measures to individual barriers A typology of employment barriers Work-related capabilities Education / skills; Work experience Health problems Care responsibilities Incentives Earnings replacements: out-of-work benefits Tax burdens on inwork earnings Non-labour incomes Incomes of other household members Opportunities Cyclical labourmarket weakness Limited hiring in relevant labourmarket segment (eg, region, education) Source: OECD (217), Faces of Joblessness,

25 Present-day challenge #3: Employment support. Coordinate support within and across institutions Most jobless people face several simultaneous employment barriers 4 or more barriers 3 barriers 2 barriers single barrier No major barrier % of target population GRC POL ROU HRV ITA HUN IRL PRT ESP LTU BGR EST Source: OECD (217), Faces of Joblessness,

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27 Additional material

28 What policy response? Skills Social dialogue Social protection & employment support

29 In most advanced countries, the occupational structure is polarising Labour market polarisation, selected OECD countries, 1995 to 215 Percentage point change in share of total employment 15 High skill Middle skill Low skill France United Kingdom Italy OECD Average Germany United States Canada Japan

30 ICT experts continue to account for relatively small shares of the workforce ICT specialists in OECD economist, share of total employment Electronics and telecom installers and repairers Electrotechnology engineers ICT service managers Many workers lacking ICT skills ICT technicians ICT professionals Few high-skilled workers Source: OECD Digital Economy Outlook, 215 3

31 Many workers do not have the right skills for the new jobs Problem-solving skills in Technology-Rich Environments Percentage of the working-age population (aged 15/16-64) 1 Failed ICT core or had no computer experience Lacks basic skills to fullfill simple tasks (Level 1 or below) Many workers 2 lacking ICT skills Finland Canada United States Few high-skilled workers Germany Average Poland Korea Source: OECD Survey of Adult Skills (PIAAC) 31

32 The least skilled benefit less from training Percentage of adults who participated in adult education and training during year prior to the survey, by level of literacy proficiency % Level 4/5 Below level 1 Source: OECD Survey of Adult Skills (PIAAC)

33 High inequality hinders skills investment by the lower middle class Average years of schooling by parental educational background (PEB) and inequality Average PIAAC numeracy score by parental educational background (PEB) and inequality 14 Low PEB Medium PEB High PEB 3 Low PEB Medium PEB High PEB 29 Years of schooling Numeracy Score Inequality (Gini coefficient) Inequality (Gini coefficient) Source: OECD (215), In It Together Note: Low PEB: neither parent has attained upper secondary education; Medium PEB: at least one parent has attained secondary and postsecondary, non-tertiary education; High PEB: at least one parent has attained tertiary education. The bars indicate 95% confidence intervals.

34 What policy response? Skills Social dialogue Social protection & employment support

35 Giving a voice to workers? Trends in union density, % of employees, A. English-speaking and "firmlevel bargaining" 1 % countries B. Nordic and "Ghent system" countries 1 % C. Northern and central European countries 1 % Australia Ireland Korea United Kingdom OECD Canada Japan New Zealand United States Belgium Finland Norway OECD Denmark Iceland Sweden Austria Luxembourg Switzerland OECD: 35-country weighted average. Sources: OECD (217), "Trade Unions: Trade union density", Employment and Labour Market Statistics, dx.doi.org/1.1787/data-371- en, J. Visser, ICTWSS Data base. version 5.1. Amsterdam Institute for Advanced Labour Studies (AIAS), University of Amsterdam. September 216 and national LFS estimates. Germany Netherlands OECD

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