Oecd Economic Surveys: Luxembourg 2012: Edition 2012: Volume 2012

Table of contents
Basic statistics of Luxembourg, 2011
Executive summary
	Box 1. Key Recommendations
Assessment and recommendations
	The economy has slowed and faces a number of risks
		Table 1. Key macroeconomic developments
	The financial sector is weathering the crisis
		Table 2. Key financial developments
	Changes in international regulation will shape the development of the financial sector
	Government expenditure is not on a sustainable path
		Figure 1. The fiscal deficit reflects a high level of public spending
		Figure 2. The demographic structure of the workforce implies rapid aging
		Figure 3. Pension expenditures projections are large (2010­60)
	Enhancing the efficiency of public spending would improve the sustainability of the social system
		Box 2. Main recommendations on fiscal sustainability and financial regulation
	Better structural policies to sustain living standards, growth and sectoral diversification
		Competition can be strengthened further, although competition oversight is improving
			Figure 4. Product market regulation remains restrictive despite reforms (2008)
		A more adaptable and competitive labour market
			Figure 5. The minimum wage as a percentage of average monthly earnings
			Box 3. Main recommendations on raising productivity, labour market performance, and social cohesion
	Reforming education for those who need it most is central to maintaining high living standards and improving social cohesion
		Figure 6. Educational achievement
		Figure 7. Socio­economically advantaged students attend schools with higher level teachers
		Box 4. Main recommendations to improve social cohesion with education outcomes
	Social outcomes could be improved by tackling unemployment traps and better targeting of social support
		Figure 8. Relative poverty is drifting up
		Figure 9. Total public social expenditures and inequality reduction
		Box 5. Main recommendations on social cohesion and the transfer system
	More sustainable and greener growth
		Figure 10. Population and employment developments
		Figure 11. Greenhouse gas emissions
		Figure 12. Sealed surface area and population density across different countries
		Box 6. Main recommendations on green growth and environmental sustainability
	Bibliography
	Annex A.1. Progress in structural reform
Chapter 1. Strengthening social cohesion: Making efficiency and equity go hand in hand
	Inequality has risen despite high taxes and transfers
		Figure 1.1. Employees in the economy by origins
		The gap between the top and lower decile of disposable income has increased
			Box 1.1. Indicators to measure inequality and poverty in Luxembourg
			Figure 1.2. The gap between top and low incomes is widening
		Relative poverty is also increasing
			Figure 1.3. Relative poverty has been rising
			Figure 1.4. Relative poverty rates depend on citizenship
		Both market income inequality and its redistribution are high by OECD standards
			Figure 1.5. An increase of the size of the financial sector increases inequality
			Figure 1.6. The minimum wage as a percentage of average monthly earnings
			Figure 1.7. Redistribution substantially reduces income inequalities
			Figure 1.8. Relative poverty rate is close to the European Union average
	The large transfer system is poorly targeted
		Most of transfers and tax rebates could be better targeted
			Table 1.1. Cash transfers
			Figure 1.9. The progressivity index of cash transfers is low
			Box 1.2. Overview of the welfare system
				Figure 1.10. The RMG reduces the incentive to work
			Figure 1.11. Large family allowances have a weak correlation with fertility
			Figure 1.12. Property wealth and disposable income
		Housing policy does little to reduce housing shortage as the supply side is rigid
			Box 1.3. Social housing: attribution and rent computation
		Public higher education spending is not targeted to disadvantaged families
		Insufficient work incentives within the minimum income scheme
			Figure 1.13. Income levels provided by cash minimum­income benefits
			Box 1.4. What can be learnt from the introduction of the RSA in France?
			Figure 1.14. Smoothing the RMG scheme
			Figure 1.15. Participation rates are low for the youngest and the oldest
			Figure 1.16. Incapacity related benefits are high
	The underperforming education system does little to address inequality
		Figure 1.17. Socio­economic background and education performance
		Figure 1.18. Disadvantaged students are particularly vulnerable in Luxembourg
		The large immigrant community tends to fall behind
		The trilingual system does not provide enough language support for vulnerable groups
		Remedial classes are too few
			Figure 1.19. Average reading performance across mother’s education
		Resources are not targeted to more socio­economically disadvantaged school
			Figure 1.20. Socio­economically advantaged students attend schools with more resources
			Figure 1.21. The performance of schools in more advantaged areas tends to be better
		Early tracking exacerbates inequality
			Figure 1.22. First age of selection in the education system
		Low graduation rates affect more the disadvantaged
			Figure 1.23. Time to complete upper secondary programmes and graduation rates
		Uneven educational outcomes also affect transition to the labour market
			Figure 1.24. Percentage­point difference between youth and overall unemployment rates
			Box 1.5. Recommendations on social inclusion and inequality
	Bibliography
Chapter 2. Greening growth
	Luxembourg has rapidly reinforced in its position as an economic centre
		Figure 2.1. Employment developments: residents and cross­border workers
		Figure 2.2. GHG emissions per capita, OECD countries 2000 and 2010
		Figure 2.3. Greenhouse gas emissions
		Figure 2.4. Sealed surface area and population density across different countries
	Transport investment and pricing
		Fuel taxes are among lowest in Europe generating high fuel sales to non­residents
			Figure 2.5. Diesel and petrol prices and taxes across OECD countries
			Figure 2.6. NO2 and ground­level ozone concentrations in Luxembourg
			Figure 2.7. Cars per person across OECD countries
			Figure 2.8. Modal split of trips to work – different economic centres
		Fuel taxes do not cover environmental costs
			Figure 2.9. Implicit diesel and petrol prices after adjusting for externalities
			Table 2.1. Implicit carbon prices across different fuels
		The share of public transport remains modest
		Congestion pricing is not used
	Urban planning and housing policies to control urban sprawl
		Figure 2.10. Population density per km2 in 1981 and population growth between 1981 and 2011
		Figure 2.11. Housing area available per person across different countries
		Figure 2.12. Share of home ownership across different countries (2009)
		Figure 2.13. Population growth in priority areas for urban development and elsewhere (2000­12)
		Plans to reduce urban sprawl are behind target
			Box 2.1. Spatial Planning Reforms
			Figure 2.14. Map of Luxembourg with neighbouring regions indicating average prices
			Table 2.2. Average price for an apartment per m2 (2007­09)
			Figure 2.15. Residential property prices in Luxembourg and other countries
		The housing market is affected by inflexible supply
			Figure 2.16. Share of social housing across OECD countries (2009)
	Water infrastructure and management
		Box 2.2. Recommendations to promote greener growth
	Bibliography