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The Jobs Crisis: What Are the Implications for Employment and Social Policy?

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Abstract:

The world economy is experiencing the worst recession in the post‐war period and governments need to respond vigorously to limit the social and economic costs of the resulting jobs crisis. A first priority is to assure that income support for job losers and other workers who need it is adequate and accessible. Temporary extensions of unemployment benefit duration or the coverage of non‐standard workers may be desirable in some countries, provided incentives to find a new job are not undercut, as may be judicious expansions of in‐work benefits or last‐resort social assistance. A second priority is to scale up effective active labour market policies so as to provide increased numbers of jobseekers with the re‐employment assistance they require and minimise the build‐up of long‐term joblessness. Core job‐search assistance should be maintained through the downturn. However, greater emphasis on training, hiring subsidies and public‐sector job creation (and other forms of subsidised work experience) may be required to shore‐up activation regimes and ensure that more disadvantaged jobseekers do not disconnect from the labour market. It is also important to maintain effective labour supply and thus to resist the temptation to open pathways to early retirement and disability benefits. This proved to be a mistake in the past that was difficult to reverse and should not be repeated. The initial responses of OECD governments to the crisis appear to be largely consistent with these principles, but it is too early to evaluate their ultimate effectiveness in helping workers weather the storm. There is also a question mark over the scale of the expansion of active labour market policies to date in the face of the steep hikes in unemployment.

Document Type: Review Article

Publication date: September 1, 2009

oecd/16080289/2009/00002009/00000014/8109151ec002
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