Going for Growth: OECD structural surveillance Growth Strategies Czech ambition and OECD experience OECD, 11th January 2006 Going for Growth: OECD structural surveillance Jean-Philippe Cotis OECD, Chief Economist

Graph 1: In the large euro area countries, per capita GDP relative to the US has receded

Graph 2: What’s been driving the gap in per capita incomes?

Graph 3: Product market regulation restrictiveness is converging towards a more liberal stance in all OECD countries

Graph 4: …but no progress has been made in reforming employment protection legislation

Graph 5: There is a wide dispersion in older worker employment rates…

Graph 6: …which is largely explained by disincentives in old age pension systems…

Graph 7: ...and in social transfer programmes The first point to note is that the UK made progress catching up with the US level of output per capita in the post war years. But this stalled in the 1960s and continued through the 1970s. Since the 1980s catch-up has restarted, though its pace is slow. In fact, after 20 years of catch-up, the level of UK output per capita is at around the same level it was in 1970. It is also noteworthy that, unlike the euro area, the UK has succeeded to reverse the trend of relatively slower growth in GDP per capita with the US. The findings of OECD and other analytical work suggest the improvement in the UK’s long term growth performance is linked to structural reforms in labour, product and financial markets.

Graph 8: Labour force participation rates of population aged 55-64 and the implicit tax on continued work1

Graph 9: Suppressing various policy distortions would have a large positive impact on the labour force participation of older workers

Graph 10: Geographic mobility, unemployment rates and unemployment insurance in selected OECD countries

Graph 10: Geographic mobility, unemployment rates and unemployment insurance in selected OECD countries, continued

Graph 11: Lower producer support to agriculture would improve market access for non-EU countries1

Graph 12: In the EU, electricity prices for industry competition1