Key Lessons for Labour Market Reforms : Evidence from OECD Countries' Experience

The purpose of this paper is to distill the lessons for labour market reforms from the ?successes? and ?failures?. It begins by discussing the structural unemployment indicator which the OECD has used to identify the successful countries. This is followed by a review of the cross-country determinants of structural unemployment which focuses on the role of labour market policies and certain institutional factors. One novelty is the specific attention paid to potential interactions between labour market policies and institutional features of the collective bargaining system. The paper also highlights several key lessons for labour market reforms drawing on recent OECD research. In particular, it discusses the role played by labour market insiders in the process of reform. It considers the way in which concerns about the equity effects of labour market reforms have played a role in shaping policies. Finally, it discusses the role of crises as a potential catalyst for needed reforms