Rich nations fail to boost employment


2006. 03. 13. 16:11

According to the Organisation for Economic Cooperation and Development their policy suggestions a year ago how to increase labour utilisation have in most cases neither taken place nor been planned. Poor economic performance particularly in Europe and Japan has led to a big decline in relative living standards compared with the US. The social costs associated with the failure to converge are plain to see, and will only worsen with demographic ageing. The OECD compared living standards, measured by GDP per capita, of its 30 advanced country-members with the US and calculated whether any shortfall was caused by productivity differences or how much labour was used.

However, Continental Europe economies use reasonably well labour productivity, the productivity growth performance has declined. Japan and countries in Asia and Eastern Europe have lower living standards than the US, primarily because productivity levels are much lower.

On one hand, during last year many countries had taken steps to improve productivity with introducing laws, opening markets to new competitors and with education reforms. On the other hand, acute problems were revealed since only a few moves had been taken to reduce unemployment among young and older workers, boost participaton in the labour force and reduce taxes on work.
The OECD was most concerned that the tax and benefits system of many countries encourage people to retire unnecessarily early. The OECD has shown that increasing the participation of older people in the labour force is the single policy most likely to reduce the cost of pensions.

1. Were the last year suggestions of OECD about increasing proportion of adults in work acted on?
2. According to the OECD how could the current level of living standard be described in Japan?
3. What kind of new drives were launched in the countries examined?
4. Why can the retirement in a relatively early age cause problems?

1. In most cases the last year suggestions neither took place, nor even planned.
2. Compared to the Us the current level of living standard has declined.
3. Many countries have taken steps to improve productivity with introduction of new laws, opening markets to new competitors, and education reforms.
4. Because in the ageing societies the cost of the pension will rise while the productivity will fall.

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