Pascal Marianna ELSEmployment Analysis

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Pascal MariannaELS/Employment Analysis
Policies Division

• Labour markets in BRICs and OECD countries How
  do they compare?

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Presentation

• Main results and issues
• Employment performances
• Wage trends
• Labour supply developments
• Statistical issues
• Employment and unemployment
• Informal employment
• Wage estimates

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Interest in the BRICs Brazil, China, India and
Russia
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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.

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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 Indiaand of older workers in Russia

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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)

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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

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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

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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

10
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

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Statistical issues (cont.)

• Extensive use of International data sources WDI,
  ILO, WEI
• National sources
• Brazil IBGE website (http//www.ibge.gov.br/home/
  )
• Russia Federal State Statistics portal
  (http//www.fsgs.ru/wps/portal/english)
• 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

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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

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Some key challenges

• How to absorb surplus of rural and unskilled
  labour (Brazil, China, India)?
• How to reduce youth unemployment rates including
  among graduates?
• How to promote transitions to formal employment
• Facing population ageing especially in China and
  Russia
• Implementing survey instruments to better monitor
  labour market performance

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• THANK YOU