LABOR MARKET
Key findings
Do labor market policies minimize unemployment, while expanding
the labor force?
the labor force?
Labor market scores are weighted composites. A qualitative policy assessment [ 
] contributes one-half of this weighting, with five quantitative measures [ 
] each contributing an additional one-tenth.
Scores and methodology
] contributes one-half of this weighting, with five quantitative measures [ ] each contributing an additional one-tenth. Scores and methodology
Labor marketKey findings: Labor market
Each 
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.
Click country name in list or text for details.
represents an individual country and is positioned on a scale from 1 (lowest) to 10 (best). Position cursor over to see scores for individual countries.Click country name in list or text for details.
Score distribution
9.8
1
9.2
2
9.1
3
8.6
4
8.2
5
8.1
6
7.9
7
7.9
7.8
9
7.6
10
Low, relatively stable unemployment rates over a significant period of time are a hallmark of the top group of countries.
The Nordic countries (Iceland, Denmark, Norway, Sweden) have excelled through active labor policies, such as intensive training, flexible labor regulations, and robust social safety nets.
Most of the English-speaking countries (U.S., Canada, UK) have profited from strong economies, flexible labor markets, and macroeconomic policies tied to employment. Their success is particularly impressive given high immigration rates.
Several of these countries (U.S., Switzerland, Ireland, New Zealand) demonstrate that unemployment rates of under 5 percent are attainable.
The Nordic countries (Iceland, Denmark, Norway, Sweden) have excelled through active labor policies, such as intensive training, flexible labor regulations, and robust social safety nets.
Most of the English-speaking countries (U.S., Canada, UK) have profited from strong economies, flexible labor markets, and macroeconomic policies tied to employment. Their success is particularly impressive given high immigration rates.
Several of these countries (U.S., Switzerland, Ireland, New Zealand) demonstrate that unemployment rates of under 5 percent are attainable.
7.4
11
7.3
12
7.0
13
6.9
14
6.7
15
5.7
16
5.6
17
5.3
18
5.2
19
5.2
5.0
21
In the middle group, unemployment rates have been kept under control, but persistent sectoral, regional or demographic difficulties often remain.
Australia and the Netherlands show low nominal unemployment, with some structural issues still being addressed. Globalization has undermined labor policies in Finland and Austria, though Austria, like Spain, has benefited by entry into the EU's single market.
Long-term structural unemployment issues persist in Germany, along with low labor flexibility. Mexico and Spain show relatively low overall employment rates, while unemployment among youth or older workers remains problematic in South Korea, Spain, Japan and the Netherlands.
Despite adopting western European labor regulations, the Czech Republic faces resource constraints on its labor policy.
Australia and the Netherlands show low nominal unemployment, with some structural issues still being addressed. Globalization has undermined labor policies in Finland and Austria, though Austria, like Spain, has benefited by entry into the EU's single market.
Long-term structural unemployment issues persist in Germany, along with low labor flexibility. Mexico and Spain show relatively low overall employment rates, while unemployment among youth or older workers remains problematic in South Korea, Spain, Japan and the Netherlands.
Despite adopting western European labor regulations, the Czech Republic faces resource constraints on its labor policy.
4.3
22
4.2
23
4.2
4.2
3.8
26
3.6
27
3.5
28
2.7
29
2.7
Different mixes of persistently high unemployment rates, labor inflexibility, strong regional disparities and inconsistent policies characterize these countries' labor markets.
Three founding EU members (France, Italy, Belgium) are in this group, evidence of glaring labor market policy deficits. Unskilled, young and migrant labor forces remain a challenge. Overregulation and labor market inflexibility are problems in France and Portugal.
Unemployment rates in Italy and Slovakia have fallen somewhat. Governments in several countries (Greece, Poland, Hungary, Turkey) lack a sustainable labor market strategy, contributing to low overall employment rates.
Belgium, Italy, Slovakia and Greece show strong regional labor disparities.
Three founding EU members (France, Italy, Belgium) are in this group, evidence of glaring labor market policy deficits. Unskilled, young and migrant labor forces remain a challenge. Overregulation and labor market inflexibility are problems in France and Portugal.
Unemployment rates in Italy and Slovakia have fallen somewhat. Governments in several countries (Greece, Poland, Hungary, Turkey) lack a sustainable labor market strategy, contributing to low overall employment rates.
Belgium, Italy, Slovakia and Greece show strong regional labor disparities.
Rationale
Large-scale unemployment represents the most important challenge for economic policy in many OECD countries. While faster economic growth was once correlated with falling unemployment, this causal relationship has been quite weak over the past two decades.
High wages and social insurance costs have led companies to invest in new production technologies instead of creating additional jobs. Labor-intensive industries and service providers that employ low-skilled workers are relocating some operations to low-wage countries. The workers affected face increasing difficulty in finding appropriate jobs, thus reinforcing structural unemployment.
Other groups of workers, such as young people and foreigners, also tend to be disadvantaged in many labor markets.
Performance comparison
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