The economic recovery has been weak or uneven and some countries have fallen back into recession. This chapter examines the implications of the lack of a vigorous recovery for OECD labour markets. Its main findings are threefold. First, almost three years
since the start of the economic recovery, economic growth has not been strong enough to make more than a small dent in the cyclical hike in OECD‐wide unemployment. Second, there has been an increasing marginalisation of the jobless through an increase in the number
of long‐term unemployed and of discouraged workers leaving the labour force. Third, there is a growing risk that at least part of the cyclical increase in unemployment may become structural even if this has only materialised to a limited extent so far. From a policy
perspective, the key priority is to underpin aggregate demand. This requires appropriate macroeconomic policies coupled with structural reforms that promote a prompt and solid recovery in output and job creation. Labour market policies also have a key role to play in helping
unemployed job seekers get back into work and addressing structural obstacles that prevent them from finding jobs.