www.oecd.org/eco/surveys/economic-survey-netherlands.htm

2016 OECD ECONOMIC SURVEY OF THE NETHERLANDS

@OECD@OECDeconomy

Unleashing productivity

The Hague, 3 March 2016

2

The context

3

Well-being is high

Source: OECD (2015), OECD Better Life Index.

0

2

4

6

8

10Income and wealth

Jobs and earnings

Housing

Work and life balance

Health status

Education and skillsSocial connections

Civic engagement and governance

Environmental quality

Personal security

Subjective well-being

Well-being outcomesBetter Life Index, 2015

NetherlandsOECD

4

Growth has picked up

Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database), February.

94

96

98

100

102

104

106

108

110

94

96

98

100

102

104

106

108

110

2008 2009 2010 2011 2012 2013 2014 2015

Real GDPIndex 2008 Q1 = 100

Netherlands OECD Euro area

5

Unemployment is decreasing

Source: Eurostat (2016), Employment and unemployment (Labour Force Survey) (database), January.

0

1

2

3

4

5

6

7

8

9

0

1

2

3

4

5

6

7

8

9

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

UnemploymentAs a percentage of the labour force

Unemployment Long-term unemployment

6

Fiscal sustainability is healthy

Source: Calculations based on OECD (2016), OECD Economic Outlook: Statistics and Projections (database), February and European Commission (2015), "The 2015 Ageing Report: Economic and budgetary projections for the 28 EU Member States (2013-2060)", Directorate-General for Economic and Financial Affairs.

0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040

Public debt simulationGeneral government gross debt, Maastricht definition, as a percentage of GDP

Baseline

No productivity growth

Without offsetting rising ageing-related costs

7

House prices are rising

Source: Statistics Netherlands (2016), "House Price Index; existing, Netherlands", in Construction and housing, Statline, January.

80

85

90

95

100

105

110

80

85

90

95

100

105

110

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

House pricesIndex 2007 = 100

Netherlands Big cities

8

Productivity has been flat

80

85

90

95

100

105

110

80

85

90

95

100

105

110

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Labour productivityReal GDP (USD 2010 PPPs) per total hours worked, index 2007 = 100

Netherlands OECD Euro area

Source: OECD (2016), OECD Productivity Statistics (database), February.

9

Fiscal policies

10

Budget deficit is low

-6

-5

-4

-3

-2

-1

0

1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Budget deficitAs a percentage of GDP

Overall deficit

Structural deficit

Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database), February.

11

Tax reform was not adopted

Increase tax efficiency, notably by accelerating the reduction of mortgage interest rate relief and phasing out lower VAT rate, while keeping the tax reform fiscally neutral.

Source: OECD (2014), Consumption Tax Trends 2014: VAT/GST and Excise Rates, Trends and Policy Issues.

0

20

40

60

80

100

120

0

20

40

60

80

100

120

MEX

GRC IT

ATU

RES

PPO

LSV

KG

BR IRL

ISL

PRT

AUS

BEL

FRA

CAN

HUN

NLD

DEU

OEC

DFI

NSW

ENO

RCZ

ESV

NDN

KAU

TCH

LIS

RKO

RJP

NES

TCH

ENZ

LLU

X

Value-added tax revenue ratioAs a percentage, 2012

12

Self-employment is expanding rapidly

Reconsider the degree of tax incentives for self-employed, and explore alternatives for ensuring they build adequate savings for disability, and ageing risks if needed.

-200

-100

0

100

200

300

400

500

600

-200

-100

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Self-employmentContributions to the change in total employment since 2003 Q1, thousand

Employees Self-employed

Source: Statistics Netherlands (2016), "Employment, quarterly", in Labour and social security, Statline, February.

13

Bolstering private investment

14

Total investment is recovering from a low level

Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database), February.

16

18

20

22

24

26

16

18

20

22

24

26

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Total investmentAs percentage of GDP, 4-quarter cumulative

Netherlands OECD Euro area

15

Low housing investment risks creating shortages

Support the supply of rental housing by further limiting strict rent regulation in the private market.

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Residential investmentAs a percentage of GDP, 4-quarter cumulative

Source: OECD (2016), OECD Economic Outlook: Statistics and Projections (database), February.

16

Private R&D spending is low

Step up efforts to strengthen innovation performance by increasing direct public support for R&D

Source: OECD (2015), OECD Science, Technology and Industry Scoreboard 2015: Innovation for growth and society.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

CHL

MEX

GRC PO

LSV

KTU

RNZ

LPR

TIT

AES

PCA

NES

TNO

RHU

NG

BR CZE

NLD

IRL

AUS

ISL

FRA

BEL

USA

DEU

SVN

DNK

AUT

CHE

SWE

FIN

JPN

KOR

ISR

Business R&D intensityAs a percentage of GDP, 2013 or latest year available

17

Renewable energy is below target

Ensure stronger investment in renewables and energy efficiency by improving cost-effectiveness of existing instruments and possibly increasing their scale.

Source: Eurostat (2016), "Climate change and energy", in Europe 2020 Indicators, February.

0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

LUX

NLD

GBR BE

L

IRL

HUN

POL

SVK

CZE

DEU

FRA

GRC

EU28

ESP

ITA

SVN

EST

PRT

DNK

AUT

FIN

SWE

NOR ISL

Renewable energyShare of renewable energy in gross final energy consumption, percentage

2014 2020 Target

18

Credit for SMEs is tight

Increase competition in the market for SME loans by considering the creation of a credit register for companies, based on standard reporting data if possible.

Source: ECB (2016), "Survey on Access to Finance of Enterprises", Statistical Data Warehouse, European Central Bank, January.

0

5

10

15

20

25

30

0

5

10

15

20

25

30

FIN DEU AUT BEL ITA EMU ESP FRA PRT GRC IRL NLD

Rejection rates of credits to SMEsAs a percentage of respondents of SMEs applying for a loan, April to September 2015

19

Boosting skills for all

20

Skills are strong

230

240

250

260

270

280

290

300

230

240

250

260

270

280

290

300

ITA

ESP

FRA

IRL

POL

AUT

USA

DEU

DNK

GBR

KOR

OEC

D PI

AAC

CAN

SVK

CZE

BEL

EST

NOR

SWE

AUS

NLD

FIN

JPN

PIAAC literacy proficiencyLiteracy score point

Source: OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills.

21

Skills of some groups, mainly migrants, lag behind

Raise the quality of early childhood education and care further and foster generic skills in vocational education and training. Further raise teachers’ qualification, in particular in disadvantaged schools, and subsequently their wages.

Source: OECD (2013), OECD Skills Outlook 2013: First Results from the Survey of Adult Skills.

200

220

240

260

280

300

320

200

220

240

260

280

300

320

Firstgenerationimmigrants

Lesseducated

Secondgenerationimmigrants

Old Lesseducatedparents

Natives Youth Moreeducatedparents

Moreeducated

PIAAC literacy proficiency by socio-demographic groupsLiteracy score point

Netherlands OECD PIAAC average

22

Job market polarisation requires adaptability

Enhance entrepreneurial skills by evaluating the effectiveness of programmes in formal education, developing online stand-alone training programmes, and promoting peer-to-peer learning.

-80

-60

-40

-20

0

20

40

60

80

100

-80

-60

-40

-20

0

20

40

60

80

100

1996-2008 2009-10 2012-14

Average annual change in total employment in the Netherlands by occupation categories requiring different tasks

Thousand employed persons

Non-routine manual Routine manual Abstract

Source: Eurostat (2015), Employment and unemployment (Labour Force Survey) (database), October.

23

Immigrants are less active on the labour market than natives

Strengthen the provision of public employment services, and create programmes combining work experience and on-the-job training as well as language courses for immigrants.

Source: OECD (2015), "Employment, unemployment and participation rates by sex and place of birth", OECD International Migration Statistics (database), October.

-15

-12

-9

-6

-3

0

3

6

9

12

15

18

-15

-12

-9

-6

-3

0

3

6

9

12

15

18

SWE

NLD

BEL

DNK

FRA

FIN

AUT

MEX

DEU

NOR

SVN

CHE

ESP

NZL

AUS

GBR CA

NO

ECD

EST

ISL

IRL

GRC PO

LUS

ACZ

EIT

APR

TTU

RSV

KIS

RHU

NLU

XCH

L

Differences in employment rates between foreign-born and native-bornWorking-age population, percentage points, 2014

24

Temporary employment is high

Further reduce the cap on severance payments to make permanent contracts more attractive to employers.

Source: OECD (2015), OECD Employment and Labour Market Statistics (database), November.

0

5

10

15

20

25

30

0

5

10

15

20

25

30

EST

GBR AU

TJP

NAU

SNO

RLU

XDN

KIR

LCH

EBE

LSV

KCZ

EO

ECD

DEU

HUN

CAN

ISL

TUR

GRC FR

ASW

EIT

AFI

NSV

NNL

DKO

RPR

TES

PPO

LCH

L

Temporary employmentPrime-age workers (25-54 year-olds), as a percentage of total employment, 2014

25

More Information…

www.oecd.org/eco/surveys/economic-survey-netherlands.htm

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