Long abstract

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This chapter discusses developments in the labour market, which have been quite unusual in the current business cycle. While movements in unemployment have not been out of line with traditional patterns, this has resulted from a combination of both abnormally weak job creation and labour force participation. Possible explanations for these trends are considered. These include higher trend productivity growth and offshore outsourcing on the one hand and demographic factors and rising school enrolment on the other. The issue of job quality – both in terms of earnings and working conditions – is also addressed. Finally, after a brief review of labour market policies, some areas are identified where reforms or initiatives would be desirable.