Society at a Glance 2016 - Highlights & Key Figures

Society at a Glance 2016 Highlights & key figures

There has been a gradual shift in the age profile of poverty over the last decades, with young people replacing the elderly as the group most at risk of poverty.

The elements in this brochure are extracted from the OECD report Society at a Glance 2016.

Visit the website at: http://oe.cd/sag The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

OECD HIGHLIGHTS SOCIETY AT A

15% of the OECD youth population were not in employment, education or training (NEET) in 2015 – the equivalent of about 40 million young people.

GLANCE 2016 - 1

SOCIETY AT A GLANCE

Contents • Introduction: Entering the labour market • Not in employment, education or training (NEETs) • Staying NEET long term • The cost of NEETs • Income inequality • Poverty • Life satisfaction • Confidence in national government • Alcohol • Smoking • Living arrangements • Social support networks

OECD HIGHLIGHTS SOCIETY AT A GLANCE 2016 - 1

© OECD 2016

Introduction The Great Recession caused sweeping job losses across the OECD. Young people were hit particularly hard as they often lack work experience and were more likely to work in atypical contracts that are easier to terminate.

But the Great Recession also affected schoolleavers – while entering the labour market might be difficult during the best of times, it is especially hard during a recession, when fewer jobs are available and competition is intense.

Young people who entered the labour market at the height of the crisis in 2009 were substantially less likely to be employed over the first five years of their careers than the 2004 cohort of labour market entrants (left-hand panel below).

Five years after entering the labour market, the employment rate of the “crisis cohort” was 6 percentage points lower than that of their “precrisis” peers.

Experience from previous recessions shows that even those who manage to secure employment have fewer opportunities for promotion and

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Young people entering the labour market in 2004 saw their real earnings grow by a quarter within 5 years. Those entering in 2009 only experienced a real earnings growth of 2% in 5 years. training, and therefore tend to suffer from persistently depressed earnings. The real earnings of 2009 labour market entrants plummeted by 6% in the first year of their careers, and only barely recovered by 2013. Their pre-crisis peers, in contrast, enjoyed solid earnings growth of about 6% per year over the first five years of their careers (right-hand panel below).

Young people who entered the labour market during the crisis had lower employment & earnings growth 2004 labour market entrants

90%

2009 labour market entrants

140%

Percentage of employed youth

Real earnings development

130% 120%

80%

110% 70%

100% 90%

60%

1

2

3

4

5

Years following labour market entry

80%

1

2

3

4

5

Years following labour market entry

Source: Based on the EU-SILC and the Mexican National Occupation and Employment Survey (ENOE). OECD averages shown are for all countries with available data. http://dx.doi.org/10.1787/888933405393

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Not in employment, education or training (NEETs)

Eight years after the beginning of the financial crisis, across the OECD, still about 40 million young people are neither employed nor in education or training (NEET) – 14.6% of all young people aged 15-29 in 2015. This share is strikingly high in the countries hit hardest by the recession – between one-quarter and one-fifth in Greece, Italy, and Spain.

Low education is the main risk factor for becoming NEET – about 40% of NEETs only have lower secondary education. Reducing the number of early school leavers and promoting vocational education and apprenticeship programmes are essential policies for helping young people into employment.

About two-thirds of NEETs are inactive, that is they are not actively looking for work. In some countries –

such as Turkey, Mexico, and Chile – low female labour force participation leads to high inactive NEET rates among young people. Many of these young women would work if they had access to affordable child care services. On average in the OECD, young women are 1.4 times more likely to be NEET than young men.

While many countries have experienced bouts of recovery, they have generally been too weak to bring NEET rates back to their pre-crisis level. Indeed, the Southern European countries that have been severely affected by the crisis – such as Spain, Italy and Greece – experienced a second recession in 2011-12, and youth employment is only just levelling out. Other countries – such as Estonia, Hungary and Iceland – have already recovered, or are on their way to recovering, their pre-crisis NEET rates.

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The share of NEETs as percentage of all young people, 2015 Turkey Italy Greece Spain Mexico Chile Korea Slovak Republic Ireland France Hungary Belgium Portugal Poland Canada Latvia OECD United States Israel Finland United Kingdom New Zealand Slovenia Estonia Czech Republic Australia Austria Denmark Japan Sweden Germany Norway Switzerland Luxembourg Netherlands Iceland

18.8% 18.% 17.3% 17.1% 16.6% 15.8% 15.2% 15.1% 14.9% 14.8% 14.7% 14.6% 14.4% 13.8% 13.7% 13.6% 13.3% 13.% 12.9% 12.1% 11.8% 10.5% 10.4% 10.1% 9.5% 8.8% 8.6% 8.6% 8.4% 7.8% 6.2%

26.9% 24.7% 22.7% 22.1%

29.8%

Inactive NEETs Unemployed NEETs

Did you know?

15% of the OECD youth population were not in employment, education or training (NEET) in 2015 – the equivalent of about 40 million young people.

Note: 2015 or nearest year, http://dx.doi.org/10.1787/888933404842 Source: OECD calculations based on national labour force surveys except OECD Education Database for Australia, Israel, Korea and New Zealand.

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Staying NEET long term

Short NEET periods are not automatically a cause for concern. A young person may take some time off after finishing their education. Many young people go through short bouts of unemployment after leaving school, as it can take time to find work, and jobs tend to be more unstable at the

beginning of a career. Longer stretches out of employment or education are, however, more problematic and may negatively affect future employment opportunities and income.

On average, nearly half of all young people spent time outside of employment, education or training over a four-year period. The picture ranges widely – from Norway, where around one-quarter of young people were NEET between 2009 and 2012, to Greece, where a majority, 59%, spent time as a NEET.

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Nearly half of all young people become NEET at some point in time, and about one fifth remains NEET for a year or more.

One in five young people (or half of all NEETs) were unemployed or inactive for a year or more. Young women are especially at risk of becoming long-term NEETs, often because of care responsibilities. Young people who did not complete upper-secondary school are also more likely to be long-term NEETs as are those with poor health.

Total length of time as NEETs (six month periods, percentages of all youth) No NEET months

1-6 NEET months

0

20

7-12 NEET months

More than 12 NEET months (↘)

OECD Greece Italy Spain Hungary Austria Czech Republic Estonia France Portugal Slovak Republic Belgium Luxembourg Australia Slovenia Norway Iceland 10

30

40

50

60

70

80

90

100

Note: OECD average based on countries where data are available and is unweighted. http://dx.doi.org/10.1787/888933404979 Source: OECD calculations based on longitudinal 2012 European Union Statistics on Income and Living Conditions (EU-SILC) and the Household, Income and Labour Dynamics in Australia (HILDA) Survey, 2009-12.

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The economic cost of NEETs

The high number of NEETs generates opportunity costs for OECD economies, as young people’s time and skills go unused. Society at a Glance 2016 provides an estimate for the forgone productivity of NEETs, defined as the gross labour income NEETs could command if they were employed. This estimate is purely based on the foregone earnings of these young people– and does not take into account that some NEETs might prefer not to work and that their families and wider communities might also benefit from them not working. It also ignores the cost of benefits and the potentially negative consequences of joblessness for some youth on health and criminality.

Under the assumption that NEETs could command a “low wage” (i.e. two-thirds of the median wage of young people of the same gender and similar age), this exercise puts the gross labour income that could have been generated by NEETs in the OECD in 2014 at USD 360 billion. This corresponds to 0.9% of the OECD GDP (see below). The total “costs” of NEETs are a function of both NEET rates and wage levels. While countries with the highest NEET rates suffer the highest costs, relatively high wage levels can cause significant costs for countries with moderate NEET rates.

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Estimation of the cost of NEETs as a percentage of GDP, 2014

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The NEET problem costs OECD economies about 1% of GDP in forgone income – and this does not even include the cost of social support these young people receive.

OECD Average = 0.9%

<0.5%

0.5-0.9%

1.0-1.5%

2.0-4.0%

Denmark Germany Iceland Luxembourg Netherlands Norway Sweden Switzerland

Austria Canada Czech Republic Estonia Finland France Ireland Mexico Poland Slovenia Spain United Kingdom United States

Australia Belgium Chile Hungary Italy Latvia Portugal Slovak Republic

Greece Turkey

Note: 2014 or nearest year, http://dx.doi.org/10.1787/888933404877 Source: OECD calculations based on EU-SILC, HILDA (Australia), SLID (Canada), CASEN (Chile), SOEP (Germany), ENIGH (Mexico), SILC (Turkey) and the CPS (United States).

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Income inequality

There is no consensus about the optimal level of income inequality – some inequality may be desirable to incentivise people to invest in education, apply themselves at work and start innovative businesses. But at excessive levels, income inequality is perceived by some as morally reprehensible and may endanger social cohesion, long-term growth and opportunities.

Income inequality varied considerably across the OECD countries in 2014. On average, the gap between the average income of the richest and the poorest 10% of the population was 9.4 to 1, ranging

from 5 to 1 in Denmark, Finland and Iceland to 21 to 1 in Chile and Mexico. Alternative indicators of income inequality suggest similar rankings.

Income inequality remains at record-high levels.

The distribution of income that households “take home” (disposable income, post-taxes and transfers) remained broadly stable in most OECD countries between 2007 and 2014, due to the effect of cash public transfers and direct taxes. Inequality fell the most in Iceland, Latvia and Portugal, and increased the most in Estonia, Slovak Republic and Sweden.

Ratio of average income of the richest 10% compared to the poorest 10% (S90/S10), 2014 Mexico Chile United States Israel Turkey Spain Greece Italy Estonia Latvia Portugal United Kingdom Japan Korea Australia OECD Canada New Zealand Ireland Poland Hungary Switzerland France Netherlands Germany Austria Slovak Republic Sweden Luxembourg Norway Belgium Slovenia Czech Republic Finland Denmark Iceland

8.2 7.8 7.5 7.2 7.0 6.9 6.9 6.8 6.8 6.6 6.5 6.4 6.1 5.8 5.7 5.6 5.3 5.3 5.0

13.3 13.1 12.7 11.4 11.4 11.3 10.9 10.7 10.6 10.4 9.9 9.4 9.4 9.3

Note: 2014 or nearest year, http://dx.doi.org/10.1787/888933405418 Source: OECD Income Distribution Database (http://oe.cd/idd)

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18.8

20.9 20.6

Did you know?

On average, the richest 10% of the population in the OECD earn almost 10 times as much as the poorest 10%, up from 7 in the 1980s and 9 in the 2000s.

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Poverty

The poverty rate is a headcount of how many people fall below the poverty line. People are classified as poor when their equivalised disposable household income is less than 50% of the median prevailing in each country. The relative poverty rate in 2014 was 11% of the total population for the OECD average.

With an average poverty rate of almost 14% in 2014, youth (18-25 years old) have a higher poverty risk than any other broad age group. Poverty rates amongst youth were particularly high in Denmark, the Netherlands and Norway, countries where young people leave their parents’ home

and become economically independent at earlier ages. But rates were also high in Greece and to a lesser extent in Spain where youth unemployment ballooned during the crisis.

Poverty among the elderly (over 65 years old) was less prevalent than among youth in two-thirds of all OECD countries. In some countries, however, a large share of the elderly population is poor, which is often related to the country’s pension system.

For instance, elderly poverty rates were highest in Korea, where the recently introduced pension system has not fully matured.

Percentage of persons living with less than 50% of median equivalised disposable income, in 2014 Norway Netherlands Greece Denmark Finland Spain United States Japan Israel Portugal Canada Sweden Ireland Italy Chile Turkey OECD Germany Estonia France Poland Mexico Hungary Belgium United Kingdom Austria New Zealand Korea Latvia Luxembourg Slovak Republic Australia Slovenia Switzerland Iceland Czech Republic

Did you know?

There has been a gradual shift in the age profile of poverty over the last decades, with young people replacing the elderly as the group most at risk of poverty.

Youth (18-25) Elderly (over 65) 0%

10%

20%

30%

40%

50%

60%

Note: 2014 or nearest year, http://dx.doi.org/10.1787/888933405464 Source: Provisional data from OECD Income Distribution Database (http://oe.cd/idd)

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Life satisfaction with the highest life satisfaction are Nordic.

Continental Western, Eastern European and Asian OECD members are less satisfied with their lives, with the notable exceptions of Switzerland and, to a lesser extent, Austria and the Netherlands. Predominantly Anglophone OECD countries are all in the top half of the list when measuring life satisfaction, and follow in a tight group after the predominately Nordic top cluster.

Life satisfaction is determined not only by economic development, but also by peopleâ&#x20AC;&#x2122;s diverse experiences and living conditions. People in Switzerland, Denmark, Iceland and Norway are most satisfied with their lives. The average level of life satisfaction in these countries was about 50% higher than in Greece or Portugal, the countries at the bottom of the 11step ladder in 2014/15. Life satisfaction deteriorated during the crisis, particularly in Mediterranean European countries. Countries which experienced the greatest deterioration in incomes and labourmarket prospects are more likely to have low levels of subjective well-being.

Life satisfaction is usually higher among people who are satisfied with their work-life balance. Policies aimed at enhancing the combination of work and private life are therefore important for improving quality of life.

There are broad regional or cultural country groupings of life satisfaction. Four of the countries

Life Satisfaction (average points of life satisfaction on an 11-step ladder from 0-10, 2014/15 and 2007/08) Switzerland Norway Switzerland Iceland Norway Denmark Iceland Israel Denmark Finland Israel New Zealand Finland Netherlands New Zealand Canada Netherlands Australia Canada Sweden Australia United States Sweden Germany United States Austria Germany Ireland Austria Belgium Ireland Luxembourg Belgium Chile Luxembourg United Kingdom Chile United Kingdom OECD OECD Czech Republic Czech Republic Spain Spain Mexico Mexico France France Slovak Republic Slovak Republic Poland Poland Japan Japan Italy Italy Latvia Latvia Korea Korea Slovenia Slovenia Estonia Estonia Turkey Turkey Hungary Hungary Greece Greece Portugal Portugal

2014/15 2007/08

Did you know?

2

3

4

5

6

7

Source: Gallup World Poll (www.gallup.com), http://dx.doi.org/10.1787/888933405682

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About two thirds of OECD countries reported a decline in life satisfaction since the beginning of the crisis.

Confidence in national government

Trust in public institutions is essential for public support of and compliance with government policies and regulations. On average across the OECD, about 42% of respondents report to have confidence in the national government.

Confidence is highest in Norway, Switzerland, Luxembourg and New Zealand, and lowest in the Southern European countries as well as in Slovenia, and Poland, with large differences across countries.

Trust in others is also necessary for a cohesive society, and can affect economic performance and well-being. On average, about 36% of respondents report to generally trust others; this share ranges from over 60% in Nordic countries to below 13% in Chile, Mexico and Turkey.

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Percentage of people reporting to have confidence in national government (average 2014/ 2015) Switzerland Luxembourg Norway New Zealand Germany Netherlands Turkey Sweden Ireland Finland Denmark Canada Belgium Australia United Kingdom Israel Austria OECD Chile Czech Republic Estonia Japan United States Greece Slovak Republic Mexico Hungary France Italy Korea Latvia Spain Portugal Poland Slovenia

77% 68% 65% 63% 62% 56% 53% 53% 52% 52% 52% 52% 47% 47% 44% 44% 43% 42% 40% 39% 38% 38% 35% 32% 30% 30% 30% 30% 29% 28% 27% 25% 23% 23% 19%

Note: Data refer to the average 2014/2015, or to 2014 only. Due to small sample size, data for Iceland are not available.

Source: Gallup World Poll (www.gallup.com), http://dx.doi.org/10.1787/888933405726

Did you know?

Fewer than half of all citizens of OECD countries report to have confidence in national government.

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Alcohol

Alcohol use is associated with numerous harmful health and social consequences. It increases the risk of a range of cancers, strokes, and liver cirrhosis. The use of alcohol also has broader societal consequences, accounting for large losses in work productivity through absenteeism and premature mortality, as well as injuries and death among non-drinkers (e.g. because of traffic accidents caused by drivers under the influence of alcohol).

Alcohol consumption, as measured by recorded data on annual sales, stands at 8.9 litres per adult on average across OECD countries (based on the most recent data available). Austria, Estonia, France and the Czech Republic reported the highest consumption of alcohol with 11.5 litres or more per adult per year. Low alcohol consumption was recorded in Turkey and Israel, as well as in

Indonesia and India, where religious and cultural traditions restrict the use of alcohol in some population groups.

Although average alcohol consumption has gradually fallen in many OECD countries since 2000 â&#x20AC;&#x201C; by about two-thirds of a litre per adult, it has risen by one litre or more in Chile, Latvia, Poland and Sweden, as well as in key partner countries such as China, Lithuania and the Russian Federation. OECD analysis based on individual-level data shows that men of low socioeconomic status are more likely to drink heavily than those of a higher socio-economic status, while the opposite is observed in women.

Data are also available for adolescents, where on average one in five 15-year-olds reported having been drunk at least twice in their life.

Alcohol consumption among adults, 2014 (litres) Austria Czech Republic Estonia France Luxembourg Ireland Germany Slovenia Hungary Poland Portugal Latvia Slovak Republic Spain Belgium Australia Switzerland United Kingdom Denmark New Zealand Korea United States OECD Finland Netherlands Canada Chile Greece Sweden Japan Iceland Norway Italy Mexico Israel Turkey

12.2 11.9 11.7 11.5 11.0 11.0 10.9 10.9 10.6 10.5 10.3 10.2 10.1 9.8 9.8 9.7 9.5 9.4 9.4 9.1 9.0 8.9 8.9 8.8 8.4 8.0 7.9

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1.5

2.6

5.5

6.3 6.1 6.1

7.4 7.2 7.1

Note: 2014 or nearest year Source: OECD Health Statistics 2016, http://dx.doi.org/10.1787/888933405654

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On average across OECD countries, the annual alcohol consumption per adult has decreased by about two-thirds of a litre since 2000, from 9.5 litres in 2000 to 8.9 litres in 2014.

Smoking

Tobacco is a major risk factor for at least two of the leading causes of premature mortality â&#x20AC;&#x201C; cardiovascular diseases and cancer. It increases the risk of heart attacks, strokes, lung cancer, cancers of the larynx and mouth, and pancreatic cancer.

Smoking remains the largest avoidable risk factor for good health in OECD countries and worldwide.

On average in 2014, about 19% of the adult population (15 years and over) smoked daily, but this proportion varies greatly across the OECD. Rates were lowest in Mexico and Sweden (below 12%), but remain high in Latvia (36%) and

Chile (30%). Smoking is more prevalent among men than women in all OECD countries except Sweden and Iceland. Smoking rates across most OECD countries have declined markedly. On average, smoking rates have decreased by about a quarter since 2000, from 26% in 2000 to 19% in 2014. Large reductions occurred in Denmark, Luxembourg and Norway, and smoking rates only increased in Latvia and the Slovak Republic.

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Data for adolescents also show that on average one in eight 15-year-olds reported smoking at least once a week.

Daily smoking among adults, 2014 Latvia Chile Greece Hungary Austria Turkey Spain Slovak Republic Poland Czech Republic Estonia Germany Switzerland France Korea Italy Japan OECD Netherlands United Kingdom Ireland Belgium Israel Denmark Portugal New Zealand Finland Luxembourg Canada Iceland Norway Australia United States Sweden Mexico

36% 30% 27% 26% 24% 24% 23% 23% 23% 22% 22% 21% 20% 20% 20% 20% 20% 19% 19% 19% 19% 19% 17% 17% 17% 16% 15% 15% 14% 14% 13% 13% 13% 12% 8%

Note: 2014 or nearest year Source: OECD Health Statistics 2016, http://dx.doi.org/10.1787/888933405648

Did you know?

On average across OECD countries, smoking rates have decreased by about a quarter since 2000, from 26% in 2000 to 19% of adults in 2014.

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Living arrangements

Moving out of the parental home is an important step on the way to adulthood. The living arrangements of youth can also influence their

Did you know?

Nearly 60% of all young people (15-29) live with their parents across the OECD. This share increased slightly over the recession.

welfare – those living with their parents may have a lower risk of poverty as they can depend more on their parents financially. Living arrangements of youth (15-29) vary greatly across the OECD. In countries such as Italy, Slovenia and Greece, over three-quarters of young people live with their parents. In Nordic countries, young people are more likely to live alone. Between 2007 and 2014, there was an increase of 1% in the proportion of youth living with their parents and a decline of 4% living with partners or spouses across the OECD. The average change masks larger changes in some countries. In France, for example, the share of youth living with their parents rose by 31% while in Hungary and Canada it rose by 14%. This seems to suggest that the recession may have lengthened the time young people live at home and delayed the formation of their own families.

Composition of household types amongst 15-29s in 2014, percentage

With parents (↘) 0%

10%

20%

Alone 30%

Single parent 40%

50%

Partnered 60%

With other youth/adults 70%

80%

90%

100%

Italy Slovenia Greece Slovak Republic Portugal Spain Hungary Czech Republic Poland Luxembourg Ireland United States Switzerland Latvia Belgium Chile Turkey Austria OECD Germany Estonia Australia Mexico France United Kingdom Iceland Netherlands Norway Finland Sweden Denmark Canada

Note: 2014 or nearest year, http://dx.doi.org/10.1787/888933405203 Source: OECD calculations based on EU-SILC, HILDA (Australia), SLID (Canada), CASEN (Chile), HLFS (New Zealand) and CPS (U.S).

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Social support networks

Social networks and strong connections with others have been shown to be important for a variety of outcomes. Loneliness in particular can be detrimental to health and increases mortality

Did you know?

Over 95% of young people (15-29) across the OECD feel they have relatives or friends they can rely on. Among the over 50s, this is only the case for 87%.

rates, especially for older people. Across the OECD, young people tend to have stronger social ties than older age groups. On average, 93% of 15-29 year-olds report having a relative or friend they can count on to help them if they were in trouble, compared to 89% of those aged 30-49, and only 87% of those over 50.

In a majority of OECD countries at least 90% of youth report having family or friends to turn to, only Turkey and Mexico fall below this level (83% and 84% respectively). Turkey and Korea both have relatively low levels of social connectedness among older age groups, with only 61% of Korean and 68% of Turkish respondents over 50 reporting to have someone to turn to in times of need.

Iceland, Ireland and Denmark have the strongest social ties across the different age groups.

Percentage of people who report having relatives or friends they can count on by age, pooled results 2006-2014 Iceland Finland Slovenia Spain Germany Switzerland Denmark Sweden Australia Netherlands Ireland Norway United Kingdom Belgium Canada New Zealand Austria France Poland Portugal United States OECD Hungary Luxembourg Italy Japan Slovak Republic Estonia Korea Chile Czech Republic Israel Greece Mexico Turkey 65%

15-29 years old 50+ years old

70%

75%

80%

85%

90%

95%

100%

Source: OECD (2015) Howâ&#x20AC;&#x2122;s Life 2015 - Measuring Well-being based on Gallup World Poll, www.gallup.com/services/170945/world-poll.aspx, http://dx.doi.org/10.1787/888933405801

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