Promoting growth and employment

Minister of Local Government and Labour Affairs Gunnar Berge

Ministry of local government and labour

Promoting growth and employment

Statement at the meeting of the OECD council at ministerial level in Paris 21. May 1996

Thank you Mr. Chairman,

The OECD Jobs Strategy underlines the need for structural reforms in order to make the OECD countries more flexible and able to adapt.

It is necessary to employ a short term strategy for reduced unemployment as well as a long term strategy for increasing employment.

The short term strategy for reduction in unemployment is closely linked to how you treat the unemployed. There is a general agreement on the need to shift policies from passive income support to more active measures. But changes are in many cases going too slow. In this context, the OECD plays an important role in pointing out the obstacles for shifts, and alleviate the process form recommendations to implementations.

One of the main elements in a short term strategy is active labour market policy that transforms redundant workers into employable workers, combined with a social security system that provides a necessary level of protection. The secretariats review of the effects of active labour market policy shows that the return vary for different groups and programmes. This illustrates the need and room for improvements. But the reviews show that the beneficial effects of active labour market policy - when careful implemented in interaction with passive support - clearly outweight the negative impacts.

One of the key elements in a long term strategy for improving job prospects concerns how you train the future work force. A policy directed towards raising the quality of human capital is necessary in order to enhance the adaptive capacity of the work force. In addition, improving the quality of labour through education, is the most important instrument in order to avoid the dilemma between unemployment and increasing income differentials.