White Paper

By 2015, there were more than 1.6 billion people in the world who were part of the 50-plus cohort. By 2050, this number is projected to double to nearly 3.2 billion people. Throughout the world the growth of this age group is having a transformative impact, economically and socially. The US alone is home to 111 million in the 50-plus cohort; they represent a powerful force that is driving economic growth and value. The contributions of this age group are collectively known as the Longevity Economy. It is the sum of all economic activity driven by the needs of Americans aged 50 and older, including both the products and services they purchase directly and the further economic activity this spending generates. The difference it makes is substantial; in 2015, the Longevity Economy fostered $7.6 trillion in economic activity.

For decades, income distribution was ignored by a policy consensus that favoured free markets. Research on income inequality is challenging that view.

Throughout history, technological change has helped lift people out of squalor and poverty, raised standards of living and improved well-being. Technological change, however, can also be disruptive – rendering specific occupations and skills obsolete, unsettling economic structures and contributing to unemployment and economic uncertainty. Innovation is a driving factor of productivity and economic growth, but increasing productivity means that fewer people are needed to produce the same amount of goods. The increasing pace of technological change has led some to speculate that, in the digital era, technology might destroy old jobs faster than new ones are created. Job losses can occur, however, only if innovation outstrips growth in demand for new products and services. As well, the potential for automation does not necessarily translate into actual automation: the decision to automate depends on factors such as firm size, competitive pressure and the cost of a machine versus the cost of human labour. This Commentary assesses the impact of technological change on Canada’s labour market over the past 30 years and highlights its implications for the near future. If the past is any guide, a continuation of gradual changes can be expected in the demand for skills in the labour force. This is a natural market reaction to technological change. There is unlikely to be a drastic shift in employment due to automation in the near future, although some industries and types of occupations will be more disrupted than others. Here, public policy could both encourage automation and prepare the workforce for the transition.

Highlights: • Ambitious green policies that improve environmental quality while maintaining economic growth do not have to harm overall employment—if they are well implemented. • Green policies can achieve job creation in a number of ‘green’ economic sectors and through a transition of the economy towards more labour-intensive services sectors, while job destruction especially occurs in ‘brown’ sectors whose activities get replaced by green sectors. The knock-on effects on employment in other sectors can also be significant. • The use of government revenues from environmental tax reform for lowering labour taxes, mitigating undesirable distributional consequences and funding education and training programs can be crucial in achieving positive overall employment outcomes from green policies. • Well-functioning labour markets are important to achieve a smooth transition and reintegrate workers who lose their jobs. • Existing labour market policy tools are largely sufficient but can be applied more effectively. Education and training systems that prepare workers for future labour demand needs are especially important to smooth the transition. Special attention should also be paid to regions with a high share of workers in ‘brown’ sectors. • Further research is required to quantify all employment dimensions of green policies, not least with respect to within-sector firm level effects, circular economy policies and the broad interactions with socioeconomic trends.

This joint OECD-ILO report provides a comparative analysis of case studies focusing on improving skills use in the workplace across eight countries. The examples provide insights into the practical ways in which employers interact with government services and policies at the local level. They highlight the need to build policy coherence across employment, skills, economic development and innovation policies, and underline the importance of ensuring that skills utilisation is built into policy development thinking and implementation. Skills utilisation concerns the extent to which skills are effectively applied in the workplace to maximise workplace and individual performance. It involves a mix of policies including work organisation, job design, technology adaptation, innovation, employee-employer relations, human resource development practices and business-product market strategies. It is often at the local level that the interface of these factors can best be addressed.

Recent labour market trends have prompted countries to reflect on whether existing systems of labour legislation, lifelong learning, social protection, taxation and collective bargaining are still fit for purpose. While in some cases they are, in others, policies may need to be adapted to ensure protection for vulnerable workers and to prevent abuse, and to ensure that firms that comply with the regulations are not unduly disadvantaged. This report provides a snapshot of the policy actions being taken by countries in response to growing diversity in forms of employment, with the aim of encouraging peer learning where countries are facing similar issues. The findings are based on a survey by the OECD and the European Commission of 44 Ministries of Labour (or the ministry with responsibility for labour market policy) in OECD, EU and G20 countries, carried out primarily between June and August in 2018.

The WISE database provides a statistical snapshot of skills development in 214 countries. It contains 64 indicators in five broad areas: contextual factors, skill acquisition, skill requirements, skill mismatch, economic and social outcomes. While not all of these indicators are available for every country, the database can be used to examine the skills challenges and performance of each country from a comparative perspective.

The future of work offers unparalleled opportunities, but also significant challenges. Globalisation, technological progress and demographic change are having a profound impact on society and labour markets. It is crucial that policies help workers and society at large to manage the transition with the least possible disruption, while maximising the potential benefits.

Education at a Glance: OECD Indicators is the authoritative source for information on the state of education around the world. It provides data on the structure, finances and performance of education systems in the 35 OECD and a number of partner countries. With more than 100 charts and tables, Education at a Glance 2018 imparts key information on the output of educational institutions, the impact of learning across countries, and worldwide access, participation and progression in education. It also investigates the financial resources invested in education, as well as teachers, the learning environment and the organisation of schools. The 2018 edition presents a new focus on equity in education, investigating how progress through education and the associated learning and labour market outcomes are impacted by dimensions such as gender, the educational attainment of parents, immigrant background, and regional location. The publication introduces a chapter dedicated to Target 4.5 of Sustainable Development Goal 4 on equity in education, providing an assessment of where OECD and partner countries stand in providing equal access to quality education at all levels. Finally, new indicators are introduced on equity in entry to and graduation from tertiary education, and the levels of decision-making in education systems. New data are also available on the statutory and actual salaries of school heads, as well as trend data on expenditure on early childhood education and care and the enrolment of children in all registered early childhood education and care settings. More data are available on the OECD educational database.