Labour markets in BRICs and
OECD countries: How do they
compare?
Pascal Marianna
ELS/Employment Analysis & Policies Division
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Presentation

Main results and issues
 Employment performances
 Wage trends
 Labour supply developments

Statistical issues
 Employment and unemployment
 Informal employment
 Wage estimates
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Interest in the BRICs: Brazil, China, India and
Russia
Panel A - BRICs represent a growing share of world GDP
% 65
65
60
60
OECD
55
35
55
35
30
30
BRICs
25
20
EU-15
15
China
10
25
20
15
10
India
5
Brazil
0
1975
1980
Russian Federation
1990
2000
5
0
2005
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Employment: significant gains since 2000 led by strong
economic growth
 21 million net new jobs per year in the BRICs vs 4 million jobs in OECD
countries -- China tops the league of high employment rates
 Unemployment reached high levels – 8-9% -- in the late 90s in Brazil and
Russia and is currently falling slightly
 lower levels in China and India 4-5%, but masks vast underemployment in
rural areas – informal employment, seasonal employment, etc.
Employment rates
Unemployment rates
2005
1994
2000
2005
90
1994
2000
12
80
10
70
8
60
6
50
40
4
30
2
20
0
India
EU-15
Russia
Brazil
OECD
China
India
China
OECD
Russia
EU-15
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Brazil
Adult and female employment rates above OECD
average in China and Russia…
 … more older workers in the workforce in China and India than in an
average OECD country
 high youth unemployment: a common concern with some OECD countries
 underutilisation of female labour in Brazil (despite rise in female
participation since the 90s) and in India…and of older workers in Russia
Unemployment rates
Employment rates
OECD
Russian Federation
Brazil
China
India
OECD
Russian Federation
Brazil
China
India
20
18
16
14
12
10
8
6
4
2
0
90
80
70
60
50
40
30
Adult (25-54)
Women
Youth (15-24)
Older workers
(55-64)
Adult (25-54)
Women
Youth (15-24)
Older workers
(55-64)
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Informal employment is pervasive in Brazil and
India, but also in China, and is on the rise
 It is mainly located in informal sectors (see: Box 1.1)
Table 1.1. Informal employment and employment in the informal sector
Percentage of total employment
Brazil (urban)
China
India
Russian Federation
1990
2003
1990
2005
1993/94
2004/05
2001
Total
Rural
Urban
Informal sector employment
26.0
30.8
12.9
13.5
86.3
85.6
13.0
..
..
9.3
0.5
73.1
72.2
5.6
..
..
3.6
13.0
13.2
13.4
6.9
40.6
44.6
51.0
52.8
92.7
94.1
..
.. Data not available.
Source: See Box 1.2 and Table 1.A.3.
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Wage developments
 Remarkable rise in manufacturing wages in China over the past 15 years –
3 times its 1990 level in 2005….
 … and more recently in Russia
 High employment growth and wider wage inequalities in China and India
and persistently high wage inequalities in Russia and Brazil.
 This suggests that unskilled workers’ wages have not increased in Brazil,
China and India, which contradicts traditional trade theory
Figure 1.3. Real wages growth in manufacturing industries in BRICs
1990 constant prices
Brazil
Russian Federation
China (Urban)
India Production
India Non-production
300
300
250
250
200
200
150
150
100
100
05
2
0
04
2
0
03
2
0
02
2
0
01
2
0
00
2
0
99
1
9
98
1
9
97
1
9
96
1
9
95
1
9
94
1
9
93
1
9
92
9
1
9
1
9
1
91
50
90
50
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Poverty reduction in the 1990s are more
pronounced in Brazil, China and Russia, and less
so in India:
 Small increase in GDP per capita associated with greater
poverty reduction in Brazil and Russia, while greater rise in GDP
per capita associated with greater poverty reduction (Figure 1.5)
 But, reduction of extreme poverty seems to be not significant
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
80
70
Labour
supply changes:
60
50
40
30  In 2005, 42% of world population and 45% of world labour force are located
20 in the BRICs…
10  Old-age dependency ratio are expected to grow in the next 25 years in China
0 and Russia, while they could reach current OECD level by 2030
India
RussianslowJapan
United
OECD
 Brazil
LabourChina
supply growth
could
down inMexico
India, cut
by halfEU-15
in Brazil,
stagnate
Federation
States
in China and could even contract in Russia

Panel C - Old-age dependancy ratio - ratio of older persons (65 years or more) to the working-age population
60
1990
2005
2030
50
40
30
20
10
0
Brazil
China
India
Russian
Federation
Japan
Mexico
United
States
EU-15
OECD
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Educational attainment in the BRICs:
 Current levels are low in Brazil, China and India, but…
 Educational attainment is improving in all three countries,
especially in China
%
Brazil
Russian Federation
China
India
OECD average
100 %
100
Upper secondary
Tertiary
90
90
80
80
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
20-24
25-34
35-44
45-54
55-64
20-24
25-34
35-44
45-54
55-64
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Statistical issues (cont.)


Extensive use of International data sources: WDI, ILO, WEI
National sources:
 Brazil: IBGE website (http://www.ibge.gov.br/home/)
 Russia: Federal State Statistics portal
(http://www.fsgs.ru/wps/portal/english)
 India: NSS large survey results -- statistical compendium
 China: China Statistical Yearbook – 2005 and 2006

Issues:
 Employment and Unemployment (Box 1.1)
 Informal employment (Box 1.1 and Table 1.1)
 Wages
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Statistical issues (cont.)

Comparability of employment and unemployment statistics
 Box 1.1 is starting pint, but more work needed to assess the
conformity with ILO guidelines.
 China: 2000 population census based estimates are getting
obsolete. Need for a regular labour force survey covering the whole
country

Informal (sector) employment
Resolution on informal sector adopted by 15th ICLS (1993):
Informal-sector employment refers to own-account workers and
employers and employees in firms with fewer than 5 (or 10)
employees including (unpaid) family workers and domestic workers
since the 17th ICLS.
Informal employment refer to employed not contributing to social
security (health & pension)

Wages
India: change in question wording in NSS large survey in 1999/2000
China: US BLS MLR article on Manufacturing wages in China –
much lower estimates when including rural TVE manufacturing
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
Some key challenges





How to absorb surplus of rural and unskilled
labour (Brazil, China, India)?
How to reduce youth unemployment rates
including among graduates?
How to promote transitions to formal
employment
Facing population ageing especially in China
and Russia
Implementing survey instruments to better
monitor labour market performance
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE
THANK YOU
Working Party on Employment, Paris 29-30 March 2007
OECD-OCDE