Demographic Change in the Netherlands: Strategies for resilient labour markets | 2 Demographic change in the Netherlands: Strategies for labour markets in transition © OECD 2013 | 3 GENERAL DISCLAIMER This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Ce document et toute carte qu’il peut comprendre sont sans préjudice du statut de tout territoire, de la souveraineté s’exerçant sur ce dernier, du tracé des frontières et limites internationales, et du nom de tout territoire, ville ou région. The views expressed in this paper do not necessarily reflect the official views of the OECD nor of the governments of its member countries nor those of the European Union. ISSN 2079-4797 (PDF) OECD Local Economic and Employment Development (LEED) Working Paper Series. This report is part of a series of working papers from the OECD Local Economic and Employment Development (LEED) Programme. The LEED Programme identifies, analyses and disseminates innovative ideas for local development, governance and the social economy. Governments from OECD member and non-member economies look to LEED and work through it to generate innovative guidance on policies to support employment creation and economic development through locally based initiatives. Demographic change in the Netherlands: Strategies for labour markets in transition © OECD 2013 FOREWORD | 5 FOREWORD Together with the provinces of Groningen, Drenthe, Limburg and Zeeland, the Dutch Ministry of the Interior and Kingdom Relations sought the assistance of the Organisation for Economic Co-operation and Development (OECD) regarding the labour market situation in areas affected by population decline. The OECD LEED Programme, in collaboration with local, national and international experts, carried out preliminary studies to this end. Many suggestions and ideas were also obtained during workshops and regional field visits held with local employers, trade unions, educational institutions and other public authorities. This report presents the results of these studies. Europe is on the verge of major demographic change, and those countries impacted will have to respond to the challenges associated with these changes. The Netherlands is also predicted to undergo extensive population ageing and population decline during the coming decades, with some regions already experiencing population shrinkage. In 2009, this awareness resulted in the creation of an ‘Intergovernmental Action Programme on Population Decline’. The central government, provinces and municipalities in areas experiencing population decline are working together as part of this programme to address the consequences of demographic transition. In 2011, 'predicted regions', or areas in which a decline in population is expected within a decade, were also included in the programme. The effects of population decline are most visible in the housing and facilities sectors and therefore additional attention has been paid to these areas. Urbanisation plans have been reduced, residential development plans have been tailored towards a smaller and older population, and plans have been formulated to adapt facilities such as schools, shopping centres and care services in order to ensure quality services remain readily accessible to all ages. The question, however, is how a regional economy can develop under the influence of an ageing and declining population, and a dwindling working population. There appears to be an unfortunate self- reinforcing effect. Talented young people in particular are moving away from areas affected by population decline, due to the lack of labour market prospects. A large part of the population, however, remains - even though they may be lacking the knowledge and skills needed by local businesses, which puts the viability of these businesses under pressure. Such a situation is referred to as a ‘labour market mismatch’. This report indicates that there is no single solution to this mismatch, but rather that simultaneous attention must be paid to: the needs of older workers in the labour market; provision of knowledge and skills necessary to the labour force; the formation of partnerships between businesses, government and knowledge institutes; and specific regional aspects that can impact on local labour markets. I am certain that this report, particularly the regional workshops and their resulting initiatives, will contribute to a healthy labour market and a vital economy in areas that are both currently and predicted to be affected by population decline in the Netherlands. Mark Frequin Director-General for Housing and Building Ministry of the Interior and Kingdom Relations, the Netherlands Demographic change in the Netherlands: Strategies for labour markets in transition © OECD 2013 ACKNOWLEDGEMENTS | 6 ACKNOWLEDGEMENTS This report is the result of an international project of the OECD LEED Committee on ‘Local scenarios of demographic change: The impact on labour markets’. The report is the result of combined efforts and strong co-operation between the Netherlands’ national and regional authorities, and local and international experts. Aldert de Vries and Roxana Chandali from the Ministry of the Interior and Kingdom Relations, representatives from the regional Provinces: Inge Monteyne, Margriet Groeningen, Peter Michielsen and Lonne van Liere (Zeeland Province); Ingrid Wildhagen (Limburg Province); Mirjam Punter (Groningen Province); and Tanja Kliene Sextro (Drenthe Province); and the participants that attended the 3 workshops held in the Netherlands. The country delegates to the OECD LEED Committee provided valuable insights for this project, particularly those who participated in the analysis: Aldert de Vries of the Ministry of Interior and Kingdom Relations; and Robert Strauss of the European Commission, Directorate General for Employment, Social Affairs and Inclusion. The experts participating in the OECD mission to the Netherlands have provided valuable input to this report and we are grateful for the revisions received on different parts of the document from: David Bartinlini (OECD); Michael Foerschner (Centre for Social Innovation, ZSI, Austria); Karin Jacobs (Benelux Union); Philip Talyor (Monash University, Australia); Jasper van Loo (CEDEFOP); Femke Verwest and Andries de Jong (PBL); Jennyfer Imperator (Ministry of Foreign Affairs in the Netherlands and The Netherlands Delegation to the OECD); Silas Olsson (Health Access); Graeme Henderson (IPPR); Michal Sulkowski (Ministry of Regional Development, Poland). Thank you also to Edward Blakely (Sydney University) and Paul Elhorst (University of Groningen) for their review of the report, and Wido Scholte from Public Result B.V. for his assistance with the policy indexes questionnaires data collection. The report has been prepared by Cristina Martinez (OECD LEED Programme), supervised by Sylvain Giguère, Head of the LEED Division and Sergio Arzeni, Director of the Centre for Entrepreneurship, SMEs and Local Development. Tamara Weyman provided research and editorial assistance. Femke Verwest of PBL, Philip Taylor of Monash University, Australia and Leo van Wissen contributed to the first chapter. Femke Verwest of PBL prepared the second chapter. Jouke van Dijk, Arjen Edzes and Marije Hamersma of the University of Groningen prepared the third chapter. Andries de Grip and Jesper van Thor of Maastricht University prepared the fourth chapter. Frank Cörvers of Maastricht University prepared the fifth chapter. Maarten Vijncke (ABF Research) under the direction of Aldert de Vries provided statistical collection to support the regional chapters and cross-regional analysis. Melissa Telford proofread and copy-edited the report. Elisa Campestrin, Francois Iglesias, Debra Binks and Emma Mooney provided technical and administrative support. Demographic change in the Netherlands: Strategies for labour markets in transition © OECD 2013 TABLE OF CONTENTS | 7 TABLE OF CONTENTS EXECUTIVE SUMMARY ......................................................................................................... 11 CHAPTER 1 ............................................................................................................................... 17 ADDRESSING DEMOGRAPHIC TRANSITION AND AGEING LABOUR MARKETS IN THE NETHERLANDS .......................................................................................................... 17 1.1 Introduction ........................................................................................................................ 18 1.2 The social and economic effects of demographic transition .............................................. 19 1.3 International responses to demographic transition ............................................................. 24 1.4 The Netherlands labour market .......................................................................................... 30 References ................................................................................................................................ 44 CHAPTER 2 ............................................................................................................................... 49 NATIONAL POLICES FOR DEMOGRAGHIC CHANGE AND SHRINKAGE .................... 49 2.1 Key demographic trends and causes .................................................................................. 50 2.2 The consequences