Navigating the COVID-19 crisis and recovery

Foreword
Editorial: Seizing the moment to build a more inclusive labour market
	There is a real risk that the depth of the COVID-19 crisis will entrench inequality and exclusion unless governments put jobs at the heart of the recovery
		There is light at the end of the tunnel, but it burns brighter for some than others
	The depth of the COVID-19 crisis raises the risk that the recovery will be harder without bold and timely policies
		Promote job creation while providing an effective bridge to the recovery for those still affected by the crisis
		It is time to think big and address the right structural issues affecting the labour market
		Investing in effective skills policies will be essential to reduce inequalities and minimise individual risks
		Effectively helping jobseekers find work will require further investment in the infrastructure of activation systems
		Fostering inclusiveness requires addressing long-standing gaps in social protection
	A transition agenda for a Future that Works for all
Executive summary
	The burden of the COVID-19 crisis has fallen disproportionally on already vulnerable groups
	Soaring long-term unemployment is a tangible risk
	After protecting jobs during the height of the crisis, the design of job retention schemes must be adjusted to support the recovery
	Countries have strengthened employment services and adapted their delivery to cope with increased numbers of jobseekers in the pandemic
	Domestic outsourcing is growing across OECD countries and may bring risks for job quality and inequality
	Working hours have stabilised in recent years, but working time patterns vary significantly across countries and groups of workers
Key facts and figures (infographic)
1 Labour market developments: The unfolding COVID-19 crisis
	Introduction
	1.1. The ongoing development of the crisis
		1.1.1. The evolution of the crisis
		1.1.2. Short-term outlook
	1.2. The evolving impact on the labour market
		1.2.1. A number of countries saw a marked increase in unemployment following the outbreak of the pandemic
		1.2.2. During the COVID-19 crisis, labour market slack has taken various dimensions
		1.2.3. Many have withdrawn from the labour market…
		1.2.4. Of those who remained in employment, many saw their hours significantly reduced
		1.2.5. Thus reduced hours among those in employment absorbed much of the initial impact
		1.2.6. Many currently on temporary layoff, or working reduced hours, may end up in open unemployment…
		1.2.7. For those who have lost their jobs, long-term unemployment and scarring could become a concern
		1.2.8. Much will depend on ability to create new matches
	1.3. Who is bearing the brunt of the impact? Who is recovering?
		1.3.1. Sectoral impact of the crisis
			One of the distinctive features of the COVID-19 induced crisis has been its highly sectoral nature
		1.3.2. Impact of the crisis on socio-demographic groups
			Low paid occupations have been hit hard and much of the impact has translated through job destruction
			…And those with less education are more likely to have lost their jobs
			Unemployment rates among young people have surged…
			…as joblessness has accounted for the lion’s share of the labour market impact on youth
			Inactivity accounted for the majority of the increase in NEET as many young people put their life on hold
			Lack of prior experience makes youth particularly vulnerable to long-term unemployment and scarring
			The disproportionate impact on the labour market attachment of women has dissipated in a number of OECD countries
			Reduced hours enabled women to smooth the employment impact in a number of countries
			Deep and wide government support has protected the income of many households
			But some remain vulnerable, and many challenges remain
	1.4. Looking forward: Evidence on the impact of the pandemic on ongoing megatrends and on the path towards the recovery
		1.4.1. Has the COVID-19 crisis hit workers who were already at high risk of labour market displacement in the near future?
		1.4.2. Retraining pathways in the aftermath of the COVID-19 crisis
	1.5. Concluding remarks
	References
	Annex 1.A. Decomposition of hours worked
	Annex 1.B. Additional material, by country
	Annex 1.C. Further regression analysis of the link between COVID-19 and employment projections
	Annex 1.D. Employment projections and their data sources
	Notes
2 Job retention schemes during the COVID-19 crisis: Promoting job retention while supporting job creation
	Introduction
	2.1. The design of job retention schemes during the COVID-19 crisis
		2.1.1. Almost all OECD countries operated job retention schemes during COVID-19, but with important differences in their design and implementation
		2.1.2. Job retention support has become more generous
		2.1.3. Access to job retention schemes has been eased
		2.1.4. In sum, JR support was easily accessible, widely available and exceptionally generous in the initial phase of the COVID-19 crisis
	2.2. The use of job retention schemes during the COVID-19 crisis
		2.2.1. After reaching an unprecedented peak the use of job retention schemes receded quickly
		2.2.2. Over the first wave of the pandemic, the use of JR schemes closely followed variations in government restrictions and economic activity
		2.2.3. The use of job retention schemes across sectors closely mirrors the impact of economic restrictions
	2.3. The effects of job retention schemes: A preliminary analysis
		2.3.1. Job retention schemes helped to preserve jobs
		2.3.2. It is unlikely that the widespread use of JR schemes had a significant adverse impact on job creation and reallocation so far
	2.4. Policy discussion: Combining job retention policies with job reallocation
		2.4.1. Limiting the maximum duration of support
		2.4.2. Enhancing the targeting of support
			Requiring firms to contribute to the costs of reduced working hours
			Aligning STW and unemployment benefits more closely in countries where the gap is large
			Adapting support over time and differentiating it across industries and firms
		2.4.3. Supporting workers in jobs at risk
			Promoting the mobility of workers from subsidised to unsubsidised jobs
			Promoting training while on reduced working hours
	2.5. Concluding remarks
	References
	Annex 2.A. Additional tables
	Notes
3 Active labour market policies and COVID-19: (Re-)connecting people with jobs
	Introduction
	3.1. How has the COVID-19 crisis changed the composition of PES clients?
	3.2. Contingency plans of ALMP provision
		3.2.1. How the institutional set-ups of ALMP provision can support agile responses during times of crisis
			Organisational set-up of ALMP systems varies across countries more in terms of policy implementation than policy design
			Finer details of specific ALMPs are often set in few flexible regulations
			Capacity of ALMP systems defined through public expenditures on employment services and ALMP measures
			Institutional features that enable effective and agile responses to labour market shocks identified by countries in 2020
		3.2.2. From crisis management to longer term strategies
			Responses in 2020 focused on PES operating models
			Medium- and long-term strategies aim at re-designing ALMPs to meet new needs
	3.3. Increasing ALMP capacity to support a rapid return to work for all jobseekers
		3.3.1. Scaling up resources for ALMPs
			Increasing public expenditure on ALMPs
			Staff reallocations alleviated initial pressures, but additional PES staff is needed in many countries
			Contracting out employment services as an option to increase capacity in the medium- to longer-term
		3.3.2. Harnessing technology to increase ALMP effectiveness and efficiency
			Remote channels have been crucial to maintain services
			Digital channels and automation provide efficient service capacity to PES
			Artificial Intelligence (AI) can enhance service delivery going forwards
	3.4. Ensuring the appropriate ALMPs reach the groups in need
		3.4.1. Supporting reallocation of workers across sectors and occupations through training
			Training will be vital to match workers to jobs
			The current crisis has emphasised the need to boost digital skills
		3.4.2. Measures to increase labour demand
			Stimulating labour demand through hiring subsidies and employment incentives
			Using public works as transitional support to the most vulnerable
			Start-up incentives to support prospective entrepreneurs and keep existing start-ups going
		3.4.3. Addressing the needs of vulnerable groups
			PES need to provide individual comprehensive support to vulnerable groups throughout the labour market integration pathway
			Financial difficulties and mental health problems need particular attention in the aftermath of COVID-19
		3.4.4. Strengthening evaluation of programmes
	3.5. Concluding remarks
	References
	Annex 3.A. Additional information on the institutional set-up of ALMP provision
	Notes
4 The rise of domestic outsourcing and its implications for low-pay occupations
	Introduction
	4.1. Domestic outsourcing: What and why?
		4.1.1. Defining domestic outsourcing
			Firm-to-firm outsourcing of services
			Most temporary agency work fits the definition of outsourcing
			Own-account work often falls into a grey area
		4.1.2. Why do firms outsource work?
			Productivity, flexibility, and employer learning
			Reducing labour costs
		4.1.3. The rise of domestic outsourcing
			Domestic outsourcing and firm-to-firm contracting of services is on the rise
			Employment in Temporary Work Agencies has risen slightly over the past decade
			Own-account work is falling slightly
	4.2. Domestic outsourcing and COVID-19
	4.3. Domestic outsourcing may provide opportunities for OECD economies but its effects on job quality are mixed
		4.3.1. Outsourcing may improve productivity
		4.3.2. Outsourced jobs pay less in low-pay occupations
		4.3.3. The effects of outsourcing on other dimensions of job quality are mixed
			Outsourced cleaners are more likely to involuntarily work part-time
			Outsourced workers are less likely to participate in training
			In European OECD countries, outsourced workers are more likely to be on an open-ended contract
		4.3.4. Outsourcing, and the dual employers it often entails, may harm health, safety and labour standards compliance
	4.4. Concluding remarks
	References
	Annex 4.A. Additional figures
	Annex 4.B. Details on regression results
		Discussion and robustness of distribution regressions for earnings
		Details on the regression results for working time, training and contract type
	Notes
5 Working time and its regulation in OECD countries: How much do we work and how?
	Introduction
	5.1. How do OECD countries regulate working time? A focus on working hours, paid leave and teleworking
		5.1.1. Weekly working hours
			Regulatory settings of weekly working hours across OECD countries
				Normal weekly hours
				Maximum weekly hours and overtime
				Patterns of working hours governance across OECD countries
			Working hours regulation and hours worked
		5.1.2. Annual paid leave and public holiday
			Regulatory settings of paid leave and public holidays across OECD countries
			Paid leave regulation and leave actually taken
		5.1.3. Teleworking
			Regulatory settings of teleworking across OECD countries
			Teleworking regulation and the use of teleworking before the COVID-19 crisis
		5.1.4. Recent adjustments following the COVID-19 crisis
			Changes in working hours regulation
			Changes in paid leave regulation
			Changes in teleworking regulation
	5.2. Trends in working time and leisure across OECD countries
		5.2.1. Do employees still work less than their parents?
		5.2.2. Time for what? Time use patterns across OECD countries
	5.3. Working time across groups: Mind the gap?
		5.3.1. Changes in the distribution of weekly working hours across groups
		5.3.2. Who is flexible? Changes in the distribution of working arrangements
		5.3.3. Work-leisure balance and time poverty across groups
		5.3.4. Mismatches between reality and preferences across groups
	5.4. Concluding remarks
	References
	Annex 5.A. Additional graphs and tables
	Notes
Annex A. Statistical annex
	Sources and definitions