By date

Mass lay-offs from firms and plant restructuring occur regularly and can have potentially large consequences on places and communities. Policy makers may consider supporting firms, in order to prevent mass lay-offs but at the risk of interfering with economic dynamism, or targeting affected workers, to help them transition to new employment. Which strategy (firms versus workers) is the most appropriate and under which circumstances can be informed by better understanding the nature of the economic impact from mass lay-offs. This paper estimates the impact of mass lay-offs between 2008-18 across small regions (TL3) in Europe on regional employment and productivity. It finds there are persistent negative employment effects of mass lay-offs, and rural regions are more negatively affected on average. In part because of differences in the nature of the firm in the region, its relationship with nearby suppliers and clients, and the broader economic context of the region, productivity effects can be both positive and negative over the longer term.

This paper offers an overview of recent trends in regional employment and productivity, and describes the characteristics and geographic distribution of migrants in Australia. Additionally, it provides insights on the relationship between migration, employment, and productivity at the regional level in Australia as well as in other OECD regions. It shows that migrants in Australia are more likely to live in metropolitan regions and have much higher average education relative to native-born than in other OECD countries. Yet, despite their higher level of education, migrants have lower employment rates, mainly arising from a low labour market participation of foreign-born women. It also documents that regions with a higher share of migrants also have higher native employment rates and higher levels of labour productivity.

Labour markets across the Netherlands recovered quickly from the COVID-19 shock and Dutch cities are now facing an unprecedented level of labour market tightness. The high demand for workers presents a unique opportunity for Dutch municipalities to find pathways into employment for those with the lowest labour market attachment and alleviate the pressure faced by local employers that struggle to find suitable workers. Supporting the diverse population in Dutch cities in finding their way into the labour market requires the efficient use of existing labour market instruments, advancing innovative methods of skills-based job matching and improving the cooperation between national, regional and local labour market institutions. This OECD report analyses current and future bottlenecks that could hamper the effective provision of local labour market services. It highlights policy options for strengthening the capacity of municipalities to support different population groups in making the transition from social welfare recipients to workers.

Less than two years after the start of the COVID-19 pandemic, Russia’s illegal, unprovoked and unjustifiable war of aggression against Ukraine has triggered the biggest military confrontation in Europe since World War II. Many OECD countries have reacted to Russia’s aggression by providing military and humanitarian aid to Ukraine and by imposing economic sanctions on Russia, which has accentuated supply chain disruptions, especially in the energy sector. A combination of these supply shocks with a demand shock caused by expansionary fiscal and monetary policies to tackle the pandemic has created inflationary pressures on a scale not seen in decades. Central banks around the world are acting to fulfil their price stability mandates by increasing interest rates and by engaging in quantitative tightening (primarily the selling of government bonds to reduce central bank balance sheets), all of which put pressure on borrowing costs at a time when governments are engaging in expansionary fiscal policy to alleviate the impact of inflation. The objective of this policy note is to examine the main consequences of this challenging environment for the fiscal stance of different levels of governments. These include the weakening outlook for government revenues in times of high expenditure pressures from a more rapid energy transition as well as high borrowing costs.

In recent decades, federal and unitary countries have increasingly adopted or deepened regional governance reforms, especially in the OECD and Europe, but also in Asia, America and to a lesser extent Africa. Approximately two-thirds of countries around the world have increased the power of regions over the last 50 years. This trend has happened in parallel with countries increasingly embedding a territorial approach into policy-making at the national and subnational levels. This process, however, does not follow a linear path. The rationale behind regional governance reforms differs from country to country, and over time, leading to a broad spectrum of governance models with varying institutional and financing arrangements. Taking stock of these trends, this report provides key data on regional governance reforms and their drivers, with a focus on the role of regions in the COVID-19 crisis response. The report also presents an innovative typology of regional governance models across OECD countries and the multi-level governance instruments that enable sound regional governance and help ensure these arrangements effectively serve their purpose.

Better understanding multi-level governance frameworks and the scale of subnational government fiscal space can help countries cope with the different crisis and shocks, including the COVID-19 pandemic and Russia's aggression against Ukraine, but also address megatrends and persistent and long-standing spatial disparities. Increasing the knowledge on multi-level governance and subnational finance is also key to implement and monitor the Sustainable Development Goals. After two previous editions in 2016 and 2019, the OECD-UCLG World Observatory on Subnational Government Finance and Investment (SNG-WOFI) has become the largest international knowledge repository on subnational government structure and finance ever produced. It provides reliable and comparable information on multi-level governance frameworks, decentralisation and territorial reforms, subnational government responsibilities, fiscal decentralisation, and covers dozens of indicators on subnational expenditure, investment, revenue and debt. The 2022 synthesis report presents internationally comparable data and analysis for 135 countries and provides insights into ways to strengthen the resilience of subnational public finance. It also offers a specific focus on the impact of the pandemic on subnational governments, the territorial dimension of recovery plans, property taxation systems, innovative subnational budgeting practices, subnational public-private partnerships, and a special chapter dedicated to 31 Least Developed Countries.

This report assesses the linkages between foreign direct investment (FDI) and domestic small and medium-sized enterprises (SMEs) in the Slovak Republic. It provides policy recommendations to national and subnational governments on how to foster productivity and innovation spillovers from FDI to the local economy. The report looks at the quality of investment the country attracts, the absorptive capacity of Slovak SMEs, and a broad range of economic, business and policy conditions that can strengthen knowledge and technology diffusion from FDI to domestic SMEs. It also provides a diagnostic assessment of the core FDI-SME spillover diffusion channels, namely value chain linkages, strategic partnerships, labour mobility, and competition and imitation effects. The report provides an overview of the Slovak policy arrangements for promoting international investment, SME performance and innovation, and regional development. It does so by taking a close look at multi-level coordination, stakeholder consultation and impact evaluation. It then reviews the policy mix in support FDI-SME linkages and spillovers and proposes concrete areas for further policy reforms. The last chapter introduces a regional lens, focusing on the regions of Banská Bystrica and Košice. This report is part of a multi-year European Commission-OECD project on strengthening FDI-SME ecosystems and is the second pilot review for future country assessments.

Addressing the climate crisis requires the net zero transition of millions of SMEs globally. SMEs have a significant aggregate environmental footprint and need to adopt cleaner business models. As eco-entrepreneurs and eco-innovators, they also have a key role to play in devising innovative climate solutions. Access to finance is essential for SME investments in net zero, but small businesses face considerable challenges in tapping into the growing pool of sustainable finance. This challenge is likely to grow as financial institutions seek to comply with mandatory environmental reporting requirements. This policy paper examines the sustainable finance landscape for SMEs, the various actors in the ecosystem and the key drivers and barriers affecting the supply of and demand for sustainable finance. It provides an overview of the key policies and instruments in place to support SME access to sustainable finance and identifies considerations for future public support and policy making.