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A REVIEW of LABOUR MARKETS in the 1980S

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A REVIEW of LABOUR MARKETS in the 1980S Chapter 2 A REVIEW OF LABOUR MARKETS IN THE 1980s A. INTRODUCTION in Ireland and Turkey, the two OECD countries where birth rates had remained high into the 1970s [OECD ( 1990a, Chapter 1)I. Beginning and ending in recession, the 1980s were The peaking of the youth population warned that characterised, from 1983 to 1989, by a sustained future decades would see older working populations increase in employment and by wage moderation, and higher ald-age dependency rates. This long-term Huwever, this was accompanied by continuing high trend will normally only be be reversed when the num- levels of unemployment and record levels of long-term bers of young people rise again, which in turn can only unemployment, There was an increase in the preva- happen many years after a recovery in birth rates. lence of non-standard forms of employment and a slowing growth of government employment. During +..birth rules remained low, excepf in u Jew the decade, the number of young people reaching cuu n tries working age attained its peak and most OECD coun- Until recently, there seemed ta be no sign of recov- tries entered the 1990s with the prospect of diminish- ery in birth rates in OECD countries - rather the ing numbers of younger workers for years to some reverse. The formerly high-fertility countries of Italy come. and Spain became those with the lowest levels in The chapter treats the developments in OECD Europe (1.3 children per wornan in 1989). Even in labour markets in the 198Os, with the aim of highlight- Ireland the fertility level fell rapidly over the 1980s, to ing some of the implications for policy in the 1990s. It begins with population trends and proceeds to changes no more than replacement level (2.1) in 1989 [Monnier (‘ 19!9O)], in employment, unemployment and wages. Special However, since 1983 there have been new develop- emphasis is given to developments in migration, to ments in a number of Member countries, Sweden’s “non-standard’’ forms of employment and to trends in total fertility rate rose sharply from 1.6 children earnings. Policy implications are discussed in the con- per woman in 1983 to 2 in 1989, the fastest rise seen in cluding section. OECD countries for at least twenty years. It may have risen further in 1990, and similar though smaller rises have occurred in some of the other Nordic countries. Even in western Germany, the fertility rate climbed 3. MEDIUM-TERM POPULATION from a record low of 1.3 in 1985 tu 1.4 in 1989’. AND LABOUR FORCE Meanwhile, total fertility in the United States rose DEVELOPMENTS from 1.8, its level over much of the decade, to 2 in 1989. To some extent these rises are considered to be 1. Medium-term trends in population due to women “catching up” on births they had post- poned, a phenomenon which can be seen to a lesser The youth populution reached its peak daring the extent in some other countries. decade... Fureign p~pukti~mgrew a litlie faster, as numbers Almost all Member countries entered the 1980s with of refugees and asylum-seekem ruse record numbers of young people aged 15-24, newly- arrived into the warking-age range. The main excep- From the beginning of the 1980~~the growth rate af tions were Finland and Japan (and, less notably, the total foreign (non-national) population in Europe Switzerland and Sweden) where the peak in the youth began to increase, after two decades of general slow- population had come earlier. However, by the begin- ing, even of absolute decline. Zn 1989, the maximum ning of the 1990~~the upward trend was at or beyond proportion of foreigners in the total population was its peak almost everywhere. It continued upward only 27 per cent in Luxembourg and 15 per cent in 29 Table 2.1. Net migration rates Average rates of net migration (entries minus exits) per thousand population for the periods shown 1963-72 1973-78 1979-82 1983-87 1988 1989 Australia 7.8 3.3 6.7 5.6 9.3 9.1 Austria 2.2 0.2 0.1 0.9 1.7 4.1 Belgium 0.9 1.2 -0.4 0.0 2.2 2.2 Canada 3.1 4.2 ’ 2.7 0.8 4.5 5,3 Denmark 1.o 0.3 0.1 1.3 1.C 0.6” Finland -3.7 -1 .o 0.2 0.7 0.2 0.2 France 2.7 0.9 0.8 0.46 0.6 Germany 7,2 0.7 2.6 03 5.7 11.8 Greece -4.F 3.3 2.8 0.P 1.5’ 2.5 Tmland -2.9 -2.7 -0.3 -0.1 4.4 0.6 Ireland -0-4 4.5 -1,l -6.2 -10.0 -10.9 Italy -0.8 0.v 0.4 1.6 1.3 0.9 Japan -0.1 4.1 0.0 -0.1 4.2 4.1 Luxembourg 6.9 7.4 1.7 2.9 53 6.9 Netherlands 1.6 2.4 2.0 1.6 2.7 2.1 New Zealand 2.0 1 *!I -2.7 -0.2 -3.0 -3.9 Norway 0.7 1.1 1.1 1.7 2.7 0.8 Portugal -12.8 6.7 -2.7 2.3 1.1 1.0 Spain -0.7 0.4 0.4 -0.2 -0.6 Sweden 2.4 1.5 0.8 1.4 3.0 4.4 Switzerland 2.0 -3.5 2.6 2.5 4.6 5.1 Turkey 0.1 1.1 0.1 United Kingdom -0s -0.6 -0.4 0.6 0.3 4.1 United States 1.5, 1.8 3.0 2.7 2.7 2.6 a) Figures exclude 1988. b) Figures exclude 1987. c) Figures exclude 1972. dJ Figures exclude 1977. Smme I OECD Labour Force Statisth, I959-J989, Paris, 1991. Switzerland, while remaining under 10 per cent else- theoretical analysis of the impact of migration trends where in Europe [OECD (1989)]+Over the last twenty on population ageing. The conclusion is that it is highly years, migrants have tended to come from higher fer- unlikely that migration could be used to prevent a tility countries. However, once settled in their new long-term decline in population, nor even its progres- countries, they are strongly influenced by indigenous sive ageing. Both would requite the admission of new national behavlour and fertility differentials tend to migrants at a very much higher rate than seen over decline? Indeed, the fertility of the foreign population recent decades. drapped under replacement level in several countries, Very broadly, while in the 1960s migration could be primarily chamterised as a search for empioyment and, in the 1970~~as, family reunion, in the 1980~~a 2. Medium-term trends in the labour farce and in continued increase in the flow attributable to family participation reunions was accompanied a rapid growth in the by Labour force gruwlh S~QW~X~in North America ,. numbers of refugees and asylum-seekers and, from the middle of the decade onwards, a significant spurt in the Labour force growth over the period 1980-88 was, at numbers of new immigrant workers. Remarkably, over 1.3 per cent, only slightly lower than the annual aver- the decade, virtually all QECD countries became age of 1-4 per cent recorded in the 1970s. The differ- countries of net immigration (Table 2.1). The southern ence was almost entirely due to the sharp decline in the European countries (notably Greece, Italy, Portugal growth rate in North America, from 2.6 to 1.6 per and Spain) received major flaws of migrants from cent. For the QECD region as a whole, at least three developing countries, from the middle of the decade quarters of the increase in the labour force could be on wards. attributed to the growth in the population of working While migration added to the total populations of age, the rest to changes in participation rates [UECD Member countries, it remained too low ts “rejuvenate” ( I. 990t.1, Table 1.1 )I. In some countries, migration them by lowering the average age, especially given the played an important role. The female labour force tendency for migrants’ fertility rates to approach the grew about 50 per cent faster than the total overall average? OECD (1991, Chapter V) gives a (Table 2.2). 30 . :.a,> , i . L. ,I _. ..., , 1 Table 2-2. hbur force grawth, 1960-1989” Annual average growth rates in percentages Females 1950-70 1970-880 1980-89 1960-70 1970-80 1980-89 Nortb America 1.8 2.6 1.6 3.2 3.9 2.4 Canada 2.6 3.2 1.7 4.9 5.1 2.9 United States 1.7 2.5 1.6 3.1 3.7 2.3 1.3 0.9 1.2 1.0 0.8 1.7 Centrat and Western Europe 0.4 0.6 0.7 0.7 1.5 1.6 Austria -0.6 0.1 1.1 -0.7 0.1 1.7 &lgiurn 0.5 0.8 0.2 1.1 2.2 1.4 France 0.7 0.9 0.4 1.4 2.0 1.3 Germany 0.1 0.4 0,7 -0.3 0.9 1.2 Ireland 0.0 1.1 0.4 0..1 2.2 1*2 Luxemburg 0.6 1.3 z,5 0.8 2.6 3.0 Netherlands 1.1 1.1 2.4 2.0 3.8 5*1 Switzerland 1.5 0.1 1.2 1.4 0.7 1.7 United Kingdom a3 0,6 0.7 1.1 1.6 1.7 SoutBern Europe 0.2 0.8 1.3 -0.0 1.8 3.2 Gtm -1.o 0.5 1.6 -2.4 1.2 3.9 Italy -0.5 023 0.8 -1.2 2.3 1*9 Portugal 0.5 2.0 0.8 4.2 6.6 1.5 Spain 03 0.4 1.3 1.s 2.3 3.4 Turkey 1.0 0.8 1.9 0.4 0.2 1.7 0.7 13 0.7 1.9 2.7 1.3 1.3 1.1 0.9 3.6 2.5 1.3 0.2 1.2 0,s 0.2 1.8 0.7 2.0 2.5 3.3 3+6 4.0 4.8 0.7 2.2 1.2 1.3 5.4 2.1 0.7 1.Q 0.3 2.3 2.4 1.2 && 2.7 1*9 2*3 5.1 3.3 3.8 Australia 2.8 13 2.4 5.4 3.2 3.6 New Zealand 2.2 1.3 2.1 3.8 3.5 4.8 0.3 0.7 0.9 0.5 1.7 1.8 Q.3 0.7 0.8 0.5 1.9 1.8 1.0 1.4 1.3 1.5 2.3 2.0 among mothers with young children, For example, the Canadian participation rate of mothers with children under 3 rose from 32 per cent in 1976 to 56 per cent in 1986.
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