OECD-OCDE Working Party on Employment, Paris March 2007 Pascal Marianna ELS/Employment Analysis & Policies Division Labour markets in BRICs and OECD countries: How do they compare?

OECD-OCDE Working Party on Employment, Paris March 2007Presentation Main results and issues Employment performances Wage trends Labour supply developments Statistical issues Employment and unemployment Informal employment Wage estimates

OECD-OCDE Working Party on Employment, Paris March 2007 Interest in the BRICs: Brazil, China, India and Russia

OECD-OCDE Working Party on Employment, Paris March 2007 Employment: significant gains since 2000 led by strong economic growth 21 million net new jobs per year in the BRICs vs 4 million jobs in OECD countries -- China tops the league of high employment rates Unemployment reached high levels – 8-9% -- in the late 90s in Brazil and Russia and is currently falling slightly lower levels in China and India 4-5%, but masks vast underemployment in rural areas – informal employment, seasonal employment, etc.

OECD-OCDE Working Party on Employment, Paris March 2007 Adult and female employment rates above OECD average in China and Russia… … more older workers in the workforce in China and India than in an average OECD country high youth unemployment: a common concern with some OECD countries underutilisation of female labour in Brazil (despite rise in female participation since the 90s) and in India…and of older workers in Russia

OECD-OCDE Working Party on Employment, Paris March 2007 Informal employment is pervasive in Brazil and India, but also in China, and is on the rise It is mainly located in informal sectors (see: Box 1.1)

OECD-OCDE Working Party on Employment, Paris March 2007 Wage developments Remarkable rise in manufacturing wages in China over the past 15 years – 3 times its 1990 level in 2005…. … and more recently in Russia High employment growth and wider wage inequalities in China and India and persistently high wage inequalities in Russia and Brazil. This suggests that unskilled workers wages have not increased in Brazil, China and India, which contradicts traditional trade theory

OECD-OCDE Working Party on Employment, Paris March 2007 Poverty reduction in the 1990s are more pronounced in Brazil, China and Russia, and less so in India: Small increase in GDP per capita associated with greater poverty reduction in Brazil and Russia, while greater rise in GDP per capita associated with greater poverty reduction (Figure 1.5) But, reduction of extreme poverty seems to be not significant

OECD-OCDE Working Party on Employment, Paris March 2007 Labour supply changes: In 2005, 42% of world population and 45% of world labour force are located in the BRICs… Old-age dependency ratio are expected to grow in the next 25 years in China and Russia, while they could reach current OECD level by 2030 Labour supply growth could slow down in India, cut by half in Brazil, stagnate in China and could even contract in Russia

OECD-OCDE Working Party on Employment, Paris March 2007 Educational attainment in the BRICs: Current levels are low in Brazil, China and India, but… Educational attainment is improving in all three countries, especially in China

OECD-OCDE Working Party on Employment, Paris March 2007 Statistical issues (cont.) Extensive use of International data sources: WDI, ILO, WEI National sources: Brazil: IBGE website ( Russia: Federal State Statistics portal ( India: NSS large survey results -- statistical compendium China: China Statistical Yearbook – 2005 and 2006 Issues: Employment and Unemployment (Box 1.1) Informal employment (Box 1.1 and Table 1.1) Wages

OECD-OCDE Working Party on Employment, Paris March 2007 Statistical issues (cont.) Comparability of employment and unemployment statistics Box 1.1 is starting pint, but more work needed to assess the conformity with ILO guidelines. China: 2000 population census based estimates are getting obsolete. Need for a regular labour force survey covering the whole country Informal (sector) employment Resolution on informal sector adopted by 15th ICLS (1993): Informal-sector employment refers to own-account workers and employers and employees in firms with fewer than 5 (or 10) employees including (unpaid) family workers and domestic workers since the 17th ICLS. Informal employment refer to employed not contributing to social security (health & pension) Wages India: change in question wording in NSS large survey in 1999/2000 China: US BLS MLR article on Manufacturing wages in China – much lower estimates when including rural TVE manufacturing

OECD-OCDE Working Party on Employment, Paris March 2007 Some key challenges l How to absorb surplus of rural and unskilled labour (Brazil, China, India)? l How to reduce youth unemployment rates including among graduates? l How to promote transitions to formal employment l Facing population ageing especially in China and Russia l Implementing survey instruments to better monitor labour market performance

OECD-OCDE Working Party on Employment, Paris March 2007 THANK YOU