Country Strategies for Jobs and Growth: Gaps, Opportunities and Spillovers June 5th, 2014 Joint Session: G20 Task Force on Employment and Framework Working Group International Labour Office (ILO)

Aspiration and Reality Jobs gaps in G20 compared to pre-2007 Trend

Aspiration and Reality Jobs gaps in G20 compared to pre-2007 Trend

Potential future sources of growth in jobs and the overall economy Demand—addressing the deficit of aggregate demand through labour market and social policies Supply—increased labour market participation of under-represented groups, including women Infrastructure and other investment Demographic transitions

Aspiration and Reality Demand: Productivity growth compared to wage growth G20 Advanced economies,

Demand: Public social protection expenditure and household consumption

Positive social protection policies —> demand feedback loop Serve as automatic stabilizers Limit precautionary saving Avoid shifting excessive economic risk to households Address inequality Better job search and matching

Aspiration and Reality Long run decline in investment Gross fixed capital formation (% of GDP)

Aspiration and Reality Supply: Participation rates by age and gender 2013 or most recent year available

Increased employment participation: skill development, gender equality and active labour market policies Increased gender equality Improving skill development to meet demand Supporting worker mobility to ensure better job search and matching Tackling marginalization

Employment Action Plans and Growth Strategies Labour market policies affect both growth and employment—goal is to create a virtuous circle. At the current conjuncture, stronger growth depends on increasing demand, with more and better paid employment a critical component. Social protection also buttresses demand and makes workers, households and economies more resilient. Investment recovery requires both access to finance and expectation of expanding demand. Labour supply and demand side measures should be balanced.