OECD reports record workforce participation rates

Record highs have been recorded for the employment and workforce participation rates of the 38 Organisation for Economic Co-operation and Development countries, but the UK is among countries that has still to achieve the same rates as before the pandemic.

For the fourth quarter of 2022 the employment rate across the 38 countries was 69.6% and the workforce participation rate 73.3%. This marked new record highs for the series that began in 2005 and 2008, respectively.

In the fourth quarter of 2022, the employment rate returned to its record high of close to 70% in the euro area, and the European Union, its highest level since 2005. By contrast, it declined by more than one percentage point in Colombia and Lithuania.

In 2022, the number of men and women in employment increased across all age groups and reached its record high for both prime-age (aged 25-54) and older workers (aged 55-64). Despite a recent increase, the number of young men and women in employment in 2022 remained below its 2007 peak.

The OECD employment rate edged up to a record high of 62.5% for women, while it was stable for the third consecutive month at its highest level of 76.7% for men. The OECD workforce participation rate also reached its highest level of 66% for women and remained stable for men at its pre-pandemic level of 80.6%.

In February 2023, the unemployment rate remained at its record low in the OECD (4.8%) and in the euro area (6.6%). The unemployment rate was stable or decreased in more than 70% of OECD countries, but close to its lowest level in only seven countries, including Canada, France, and Germany. It remained stable in Canada at 5% in March 2023 for the fifth consecutive month, while it fell slightly to 3.5% in the US.

In the UK, workforce participation, defined as the percentage of working-age adults in work or job hunting, was at 78.6% in the final three months of 2022. This was down from 79.5% in the same period at the end of 2019.

The US also experienced a decline in the numbers working or looking for work – a 0.3 percentage point drop from 2019 to a rate of 74.1%. This was one percentage point higher than the figure at the height of Covid in 2020, however.

France and Germany saw an increase of more than a percentage point in 2022, while Italy’s rate increased by 0.4 points and Japan’s by 0.7 points.

The average workforce participation level has risen to 73.3% across the 38 OECD countries, which include all the major European economies plus Asian, and North and South American countries. Only seven of these had lower participation rates than before Covid: the US, Chile, Colombia, Costa Rica, Latvia, Lithuania, Switzerland and the UK.

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The UK government has taken measures aimed at increasing labour force participation, with chancellor Jeremy Hunt in last month’s budget proposing tax cuts on pension pots and introducing funding for childcare to encourage more people to enter the jobs market.

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