Transcript Speech in Stockholm

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
Trend indices, based on 2000 PPPs and 2000 prices
1
Index US GDP per capita = 100
85
Euro-3
Japan
United Kingdom
80
75
70
65
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
1. The trend is calculated using a Hodrick-Prescott filter (smoothing parameter set to 100) over a period
which includes projections through 2010.
Note: Euro-3 refers to Germany, France and Italy.
Source: OECD Annual National Accounts.
2000
2003
Graph 2: What’s been driving the gap
in per capita incomes?
Percentage point difference in PPP-based GDP per capita with respect to the Untied States, 2002
Percentage gap with respect to US GDP
per capita1
Effect of employment3
Effect of labour productivity 2
Effect of hours worked4
Norway
Ireland
Switzerland
Canada
Austria
Denmark
Iceland
Australia
Sweden
Netherlands
France
United Kingdom
Belgium
Finland
Japan
Italy
Germany
European Union5
New Zealand
Spain
Korea
Portugal
Greece
Czech Republic
Hungary
Slovak Republic
Poland
Mexico
Turkey
-80
-60
-40
-20
0
20
40
-80
-60
-40
-20
0
20
40 -80
-60
-40
-20
0
20
40
-80
-60
-40
-20
0
20
40
1. Based on the identity decomposing real GDP per capita into labour input variables and labour productivity. The labour input variables are the employment rate and the average number of hours worked by persons in employment.
2. GDP per hour worked.
3. Total employment as a percentage of total population.
4. Average hours worked by persons in employment.
5. European Union excluding the central and eastern European accession countries, Austria and Luxembourg.
Source: OECD.
Graph 3: Product market regulation restrictiveness
is converging towards a more liberal stance
in all OECD countries
State control
Barriers to entrepreneurship
Barriers to trade and investment
3.5
OECD average 2003
OECD average 1998
3.0
2.5
2.0
1.5
1.0
0.5
Aus, NZ 2003
Aus, NZ 1998
UK 2003
UK 1998
Japan 2003
Japan 1998
USA 2003
USA 1998
CEECs 2003
CEECs 1998
Euro area 2003
Euro area 1998
EU 2003
EU 1998
0.0
Graph 4: …but no progress has been made in
reforming employment protection legislation
Restrictiveness of protection legislation on regular employment
Index scale of 0-6 from least to most restrictive
1
2003
6
OECD average
5
PRT
4
CZE
3
SWE
DEU
FRA JPN TUR
GRC
KOR
POL
EU15
HUN
MEX FIN
BEL
NOR
NZL
ITA
IRL
DNK AUS
CAN
CHE
2
GBR
1
NLD
ESP
AUT
OECD average
SVK
USA
0
0
1
2
1. EU15, excluding Luxembourg.
Source: OECD Employment Outlook , 2004
3
4
5
1998
6
el a
No n d
rw
Sw ay
Sw ed
e
Ne it ze n
r
w lan
Ze d
ala
n
Un Ja d
p
i te
d an
St
ate
Ko s
Un De rea
i te nm
d
Ki ark
ng
d
M om
ex
Po ico
rtu
Ca gal
n
Au ada
str
al
Ire ia
la
Fi nd
N
n
Cz ethe land
ec rla
h R nd
ep s
ub
lic
Sp
a
Fr in
an
Gr ce
e
Ge ece
rm
an
Tu y
rk
ey
Ita
ly
Lu Pol
a
xe
m nd
bo
Be urg
lgi
u
Sl
ov Hun m
ak
ga
Re ry
pu
bl
ic
Ic
Graph 5: There is a wide dispersion in older worker
employment rates…
Employment of men and women age 55-64 as a percentage of the population age 55-64, 2002
% of population age 55-64
100
90
80
70
60
50
40
30
20
10
0
Source: OECD.
Graph 6: …which is largely explained by
disincentives in old age pension systems…
Implicit tax rates on continued work over next 5 years in current old-age pension systems 1
At age 60
In per cent
100
90
80
70
60
50
40
30
20
10
0
n
ala
w
Ne
Ze
d
Ic
n
ela
d
l
a
y
tes dom uga land ada
tri
an
a
s
t
n
t
e
m
u
g
r
a
S
r
r
I
A
C
in
d
Po
Ge
K
ite
d
n
U
ite
Un
1. Single worker with average earnings.
Source: OECD.
ly
Ita
d
m
rg
in
ea
ce
ds
ay
en pan
nd
lia
CD lan
or lgiu
pa
ou rlan
an
ed
a
rw erla stra
E
r
n
b
S
J
K
o
i
F
O
F
Sw
N
Be
itz
em ethe
Au
x
w
u
S
N
L
Graph 7: ...and in social transfer programmes
Implicit tax rates on continued work over next 5 years in current social transfer programmes
In per cent
1
At age 55
100
90
80
70
60
50
40
30
20
10
0
w
Ne
Ze
n
ala
d
Ita
ly
l
s
a
e
s
a
y
y
d
n
d
rg
nd pan
da
nd stria ium
re tate
ain uga and
om ECD lan
nc
an
de rwa trali rlan
a
a
a
o
l
l
p
d
a
ou
e
a
n
t
g
l
e
e
r
m
u
n
g
b
J
S
l
r
a
K
S
r
s
o
r
e
r
i
w
c
F
O
I
e
z
I
A
C
in
F
m
S
d
N
Po
Be
th
Au wit
Ge
K
xe
e
ite
u
d
n
S
N
L
U
ite
Un
1. Single worker with average earnings.
Source: OECD.
Graph 8: Labour force participation rates of population
aged 55-64 and the implicit tax on continued work1
Percentage points gap vis-à-vis OECD average
Gap in participation rates
40
ISL
30
20
SWE
10
NOR
CHE
NZL
JPN
USA
CAN
0
KOR
GBR
FIN
AUS
PRT
IRL
-10
ESP
DEU
FRA
-20
AUT
ITA
BEL
LUX
-30
-40
-30
-20
-10
0
10
20
30
40
Gap in implicit tax
1. Average of implicit tax on continued work in early retirement route, for 55 and 60 years old.
Source: OECD Labour Force Statistics , 2004; OECD Economic Policy Reforms: Going for Growth 2005.
50
Graph 9: Suppressing various policy distortions would
have a large positive impact on the labour force
participation of older workers
(projected labour force participation rates of the 55-64 age group in 2025 under different scenarios)
90
Projection assuming a total suppression of current policy distorsions
85
Baseline projection taking into account the potential impact of recent reforms
80
75
70
65
60
55
50
45
40
35
A
us
tri
Be a
Lu lgiu
xe
m
m
bo
ur
g
Fr
an
A ce
us
tra
lia
K
or
N
et
e
he a
rla
nd
Fi s
nl
an
d
Ita
ly
G
er
m
an
y
U
C
ni
an
te
a
d
K da
in
gd
om
Sp
a
Po in
r
U
ni tuga
te
l
d
St
N
ew ate
Ze s
al
an
Sw d
Sw ede
itz n
er
la
nd
Ire
la
nd
Ja
pa
N n
or
w
ay
Ic
el
an
d
30
Source : OECD.
Graph 10: Geographic mobility, unemployment rates and
unemployment insurance in selected OECD countries
Unemployment rate
25
ESP95
ESP85
20
ESP90
15
FRA95
ITA95
ESP80
10
FIN95
ITA85
FRA85
BEL85
BEL95
FRA90
DEU95
ITA80
BEL80 DEU85
BEL90
FIN85
FIN80
FIN90
5
CAN95
GBR95
CAN90
NLD85
NLD95
FRA80
NLD90
DEU90
NLD80
DEU80
USA80USA85
USA90
USA95
JPN95
JPN85
JPN90
JPN80
0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Mobility rate 1
1. Ratio of the total number of persons who changed region of residence over one year to the total population.
Source : OECD (2002), Employment Outlook ; OECD (2002), Benefits and Wages.
3.5
Graph 10: Geographic mobility, unemployment rates and
unemployment insurance in selected OECD countries,
continued
Mobility rate 1
3.5
USA90
3.0
JPN80
USA80
JPN85
JPN95
JPN90
2.5
USA85
USA95
CAN90
GBR95
CAN95
2.0
NLD95
1.5
FIN80
1.0
FRA80
FRA95
FRA90
FRA85
DEU90
DEU80
FIN85
FIN90
BEL95
DEU95
DEU85
NLD80
FIN95
0.5
ESP90
ESP95
ITA95
NLD90
NLD85
BEL80
BEL85
BEL90
ESP85
ESP80
0.0
5
10
15
20
25
30
35
40
45
50
55
Net replacement rate
1. Ratio of the total number of persons who changed region of residence over one year to the total population.
Source : OECD (2002), Employment Outlook ; OECD (2002), Benefits and Wages.
Graph 11: Lower producer support to agriculture
would improve market access for non-EU countries1
Percentage of total value of agricultural production, 2003
80
70
60
50
40
30
20
10
Note: The dotted line represents the simple average for the OECD.
1. A single producer support estimate is calculated for EU countries.
Source : OECD Producer and consumer support estimates database.
Switzerland
Norway
Iceland
Korea
Japan
EU15 average
Hungary
Czech republic
Turkey
Slovak
Republic
Canada
Mexico
United States
Poland
Australia
New Zealand
0
Graph 12: In the EU, electricity prices for industry
competition1
Index EU15=100
200
150
100
50
1. 2000 for Austria and Belgium, 2001 for Italy and the Netherlands, 2002 for Germany and Spain.
EU15 excluding Luxmebourg and Sweden.
Source: OECD Energy Prices and Taxes , 2004.
Italy
Ireland
Denmark
Portugal
Finland
EU15
Netherlands
Greece
United Kingdom
Germany
Spain
Belgium
France
Austria
0