Title page

Contents

Abstract/Résumé 4

Labour market challenges and opportunities 8

Boosting labour market prospects of women 22

Labour market reforms to create more and better formal jobs 25

Better targeting activation policies to tackle job displacement 36

Aligning the supply of skills with evolving labour market needs 38

References 54

Table 1. Statistics on contributions and disbursements of the unemployment insurance system 33

Table 2. The unemployment benefit system in Chile 35

Figure 1. The demographic window is open 7

Figure 2. Rapid economic catch-up came on the back of growth in productivity and exports 8

Figure 3. Employment in sectors with higher technological sophistication and knowledge intensity increased 9

Figure 4. The share of jobs at high risk of automation is elevated 10

Figure 5. The digital revolution will alter the set of jobs available 11

Figure 6. The employment rate is low 12

Figure 7. Estimated sensitivities of unemployment and employment to GDP growth 14

Figure 8. Labour market dynamics following a shock to aggregate activity 15

Figure 9. Despite trending downwards, informality is high 17

Figure 10. Unemployment has been persistently high, particularly for women 18

Figure 11. Many youths are unemployed or neither in employment, education or training 19

Figure 12. Low employment ratios of older workers reflect past incentives to early retirement 20

Figure 13. Positive net immigration flows increase the size of the population 21

Figure 14. Labour participation is low as few women join the labour force 23

Figure 15. Employment protection regulations are stringent and labour taxation is high 26

Figure 16. Minimum wages are relatively high 28

Figure 17. Income across regions varies with the share of agricultural sectors and the level of educational attainment 29

Figure 18. Severance pay is relatively high while the generosity of unemployment benefits is low 31

Figure 19. Educational attainment has improved but gaps remain 38

Figure 20. The skill mismatch is large and over-qualified workers receive lower wages 39

Figure 21. Study fields of graduates do not match the needs of labour markets 40

Figure 22. Unfilled vacancies increase despite the elevated unemployment rate 41

Figure 23. There is room to improve educational outcomes further 42

Figure 24. Private spending on education is high 43

Figure 25. Education spending is tilted towards tertiary education 43

Figure 26. The unemployment rate of tertiary graduates is elevated 45

Figure 27. There is room to increase the number of graduates from upper secondary education 47

Figure 28. Graduates with work experience do better in the labour market than those without 48

Figure 29. Educational attainment of adults has improved but skills lag behind 49

Figure 30. An innovative digital tool to compare job market prospects of different study fields 50

Figure 31. Participation in lifelong learning is low 51

Boxes

Box 1. Cyclical unemployment and employment sensitivities 13

Box 2. Informality remains high 16

Box 3. Refugees from the Syrian civil war in the Turkish labour market 21

Box 4. Supporting formal employment of mothers: some examples of ongoing projects 24

Box 5. Income per capita varies considerably across regions 28

Box 6. Passive labour market policies in Türkiye 33

Box 7. Combining individual unemployment savings accounts with a collective fund: the case of Chile 34

Box 8. Making severance pay portable: the cases of Austria and Brazil 35

Box 9. Career gate: providing merit-based job and internship opportunities in the public sector 46

Box 10. The UNI-VERI project: Evaluating labour market prospects of tertiary degree programmes 50