1 Every Hand is Needed: Making the Benefit System Employment Friendly Mark Pearson, Head of Social Policy, OECD

2 The projected increase in the dependency ratio is among the highest in the OECD

3 Population ageing will have a significant impact on labour force growth Average annual growth (%) assuming unchanged participation rates

4 Tackling benefit dependency We know what works 1.Focus attention on marginal groups 2.Mutual obligations 3.Make Work Pay 4.Get the institutional structure right This approach has worked in Canada, Denmark, Finland, the Netherlands, the UK, the US

5 Big cuts in benefit dependency are possible Trends in receipt of social assistance

6 Tackling sickness and disability Exit rate from disability benefit into employment is only 1% across OECD 1/3 of those who need help don’t get it; 1/3 of those who get help don’t need it. New approaches: –Single benefit approach of New Zealand –Changing the assumptions about the links between work and sickness in the UK –Early interventions in Switzerland –Watch Luxembourg as a good example

7 Overall female employment is relatively high Employment rates, women aged years

8 But where there are young children, it is low Employment rates, women with a youngest child under 6

9 Increase in female employment can help prevent shrinking of the labour force Total labour force (15-64) from 1980 to 2000, and projections a from 2005 to 2030, in millions Constant ratesFemale workers Czech Republic

10 What helps mothers work? Reforms in most countries have focussed on expanding childcare provision, leave arrangements Evidence suggests that need a more coherent approach Affordable quality childcare that follows on from leave Out of school hours care Low effective tax rates on second earners Availability of part-time work and flexibility in the labour market Long periods of leave are very counter-productive