Oecd Economic Surveys 2004: Netherlands

Table of contents......Page 4
Basic statistics of the Netherlands (2002)......Page 8
Executive summary......Page 10
Assessment and recommendations......Page 12
Economic growth has slumped, sharply reducing the output gap......Page 26
Figure 1.2. Estimated output gap in the Netherlands and the euro area......Page 27
Table 1.1. Real house price increases......Page 28
Table 1.2. Real stock price increases per year......Page 29
Table 1.3. Simulated effect of a 20 per cent fall in real share prices......Page 30
Table 1.5. Growth in the volume of business investment......Page 31
Figure 1.4. Short-term interest rate and Taylor rates for the Netherlands and euro area......Page 32
Figure 1.5. Monetary and financial conditions......Page 33
Figure 1.6. Unemployment, labour costs and core inflation......Page 34
Economic recovery should build over 2004-05......Page 35
Table 1.8. Short-term projections......Page 36
Trend growth in GDP per capita has slowed owing to lower growth in labour inputs and productivity......Page 37
Figure 1.9. Contributions to hourly labour productivity growth......Page 38
There remains scope to raise labour inputs......Page 39
Figure 1.11. Contributions to growth in trend hourly labour productivity in selected countries1......Page 40
Figure 1.12. Benchmarking labour inputs......Page 41
Putting public finances on a sustainable path......Page 42
Increasing productivity growth......Page 43
Making better use of economic policy instruments to reduce the cost to the economy of achieving sustainable development objectives......Page 44
Notes......Page 45
Bibliography......Page 46
Housing price increases have been high owing to weak supply responses......Page 48
Table 2.1. Real increases in house prices, construction costs and household disposable income......Page 49
Table 2.2. An error correction model of real house prices......Page 51
Volatility in wealth effects from housing has also been high owing to price inelastic housing supply and tax subsidies for owner-occupied housing......Page 50
Table 2.3. Volatility in growth in real house prices......Page 52
Figure 2.1. The impact of taxation on housing cost......Page 54
Housing subsidies reduce economic efficiency and are not well adapted to achieving their social objectives......Page 55
Table 2.4. Housing subsidisation, 2001......Page 56
Assessment......Page 57
The pension fund solvency crisis......Page 58
Measures to restore pension-fund solvency......Page 59
The government has tightened the regulatory framework for the supervision of pension funds......Page 61
The Pensions and Insurance Supervisory Authority is developing a new supervisory framework......Page 62
Assessment......Page 63
Notes......Page 65
Bibliography......Page 68
The budgetary position has deteriorated markedly, pushing public finances away from a sustainable path......Page 70
The cyclical downturn was unexpectedly severe, while recent new measures had reduced available budgetary margins......Page 71
Table 3.1. Impact of consolidation packages on budget balance......Page 73
Box 3.1. Reforms to increase the cost effectiveness of public spending......Page 74
Box 3.2. Healthcare reforms to increase competition amongst insurers and encourage them to be more active healthcare purchasers......Page 77
And the medium-term budgetary framework has been tightened......Page 78
The government considers that the consolidation packages are sufficient to put public finances on a sustainable path…......Page 79
… but this may be more demanding than envisaged......Page 80
Assessment......Page 81
Notes......Page 82
Bibliography......Page 83
Three decades of huge inflows and recent signs of improvement......Page 84
Figure 4.2. Disability numbers from an historical perspective......Page 85
Current comprehensive reform proposals and the position of the social partners......Page 86
Figure 4.3. Partial disability has kept growing......Page 87
Figure 4.4. Coverage and generosity determine benefit recipiency levels......Page 88
Table 4.1. Projected inflows into full disability under the SER proposal......Page 90
Table 4.2. Partial disability benefit entitlements under the planned WGA......Page 91
Assessment......Page 92
Incentives for a swifter return to work would help to limit structural unemployment…......Page 93
… and smaller poverty traps......Page 94
Closing the tax-subsidised route to early retirement......Page 95
Figure 4.5. Unemployment benefit duration in selected OECD countries......Page 96
Figure 4.6. Disincentives from routes to early retirement and the participation decision......Page 98
Facilitating higher labour force participation of women......Page 97
Notes......Page 100
Bibliography......Page 103
Figure 4.A1.1. Stock of beneficiaries and cost of work injury schemes in OECD countries......Page 105
Table 4.A1.1. Work injury programmes in selected OECD countries, 1999......Page 107
Annex 4.A2. The market for placement services......Page 113
Figure 4.A2.1. Work record required for access to unemployment benefits......Page 114
Figure 4.A2.2. Net replacement rates for long-term benefit recipients......Page 115
Table 4.A2.1. Evolution of the poverty trap......Page 116
Annex 4.A3. The Dutch dismissal system and effects of EPL on (un)employment......Page 117
Figure 4.A4.1. Female labour force participation will grow at a slower pace......Page 119
Table 4.A4.1. Predicted labour force participation of women aged 25-54 and share of full time, 2025......Page 120
Overview......Page 122
Indicators of the intensity of product market competition......Page 123
Table 5.1. Output, employment and productivity......Page 124
Figure 5.1. Labour productivity growth per employee in manufacturing and services......Page 125
Figure 5.2. Indicators of product market regulation......Page 127
Figure 5.3. Average mark-ups in manufacturing by market structure......Page 128
Table 5.2. Import penetration by manufacturing industry Latest available year......Page 129
Potential macroeconomic effects from regulatory reform......Page 131
Figure 5.5. Foreign direct investment outflows and inflows......Page 132
Figure 5.7. ICT and productivity growth......Page 133
Box 5.1. Economy-wide effects of regulatory reforms......Page 134
Competition legislation and enforcement......Page 135
Box 5.2. Cartels in construction......Page 136
Scope and objectives of competition law in the Netherlands......Page 137
Regulatory policies......Page 138
Figure 5.8. Administrative burden on business start-ups......Page 139
Box 5.3. Reducing administrative burdens on firms......Page 140
Retail distribution......Page 141
Figure 5.9. Summary indicators of regulation in retail distribution......Page 142
Table 5.4. Key structural features of the retail distribution sector......Page 143
Figure 5.10. Five-firm market concentration in food retailing in EU countries......Page 144
Figure 5.11. Mark-ups in wholesale and retail distribution in selected OECD countries......Page 145
Professional services......Page 146
Table 5.5. Regulation indices in professional services......Page 147
Network industries......Page 148
Figure 5.12. Estimates of incumbent operators’ market share......Page 150
Table 5.7. Prices for unbundled local loop......Page 151
Figure 5.13. Cost of internet access......Page 152
Figure 5.14. Average monthly telephone charges......Page 153
Table 5.8. Competencies and resources of energy sector regulators......Page 154
Table 5.9. Electricity market indicators and implementation of the EU Directive......Page 156
Table 5.10. Gas market indicators and implementation of the EU Directive......Page 157
Table 5.11. Electricity and gas retail prices......Page 159
Figure 5.15. Spot market prices on the Amsterdam Power Exchange......Page 160
Box 5.4. Regulatory failure: an example from the California electricity market......Page 162
Summary and recommendations......Page 161
Box 5.5. Recommendations for increasing product market competition......Page 164
Notes......Page 166
Bibliography......Page 170
Business sector R&D spending is low......Page 172
Figure 6.1. Business R&D is low, reflecting a low number of researchers......Page 173
Figure 6.2. Low R&D investment in SMEs in spite of large tax incentives......Page 174
Strengthening the interfaces in the national innovation system......Page 175
Figure 6.3. International aspects of innovative activity......Page 179
Strengthening entrepreneurship......Page 178
Furthering the quality of tertiary education......Page 181
Figure 6.4. Expenditure on tertiary education institutions......Page 182
Box 6.1. University fees and student loans in selected OECD countries......Page 184
Box 6.2. Effects of a social student loan system for the Netherlands......Page 187
The functioning of vocational training has improved......Page 186
Corporate governance practices in the Netherlands were well below international standards......Page 188
Corporate governance reforms should restore investors’ confidence......Page 190
Notes......Page 193
Bibliography......Page 195
Performance......Page 198
Box 7.1. The integration of policies across sustainable development areas......Page 199
Policies......Page 200
Table 7.1. Main indicators: climate change......Page 201
Table 7.2. GHG emissions and sector indicators......Page 202
Table 7.3. The regulatory energy tax......Page 204
Figure 7.2. The estimated recipients of Dutch renewable energy subsidies in 2002......Page 206
Conclusions......Page 208
Policies......Page 209
Table 7.4. Performance indicators: water pollution......Page 210
Table 7.5. Nitrogen and phosphorus pollution and targets......Page 211
Table 7.6. Dairy farm nutrient balances......Page 212
Performance......Page 213
Table 7.7. Main indicators: water withdrawal and land degradation......Page 214
Policies......Page 215
Conclusions......Page 217
Notes......Page 218
Bibliography......Page 220
Glossary of acronyms......Page 222
Annex A. Follow-up on OECD recommendations for structural reform since 2002......Page 224