OECD Economic Surveys : Luxembourg 2017

112 Pages·2017·3.322 MB·English

by  OECD

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OECD Economic Surveys:
Luxembourg
2017
This document and any map included herein are without prejudice to the status of or
sovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundaries
andtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2017),OECDEconomicSurveys:Luxembourg2017,OECDPublishing,Paris.
http://dx.doi.org/10.1787/eco_surveys-lux-2017-en
ISBN978-92-64-27695-6(print)
ISBN978-92-64-27698-7(PDF)
ISBN978-92-64-27705-2(epub)
Series:OECDEconomicSurveys
ISSN0376-6438(print)
ISSN1609-7513(online)
OECDEconomicSurveys:Luxembourg
ISSN1995-3720(print)
ISSN1999-0782(online)
ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.Theuse
ofsuchdatabytheOECDiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraeli
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TABLEOFCONTENTS
Table of contents
BasicstatisticsofLuxembourg,2016.......................................... 7
Executivesummary......................................................... 9
Assessmentandrecommendations........................................... 13
Macroeconomicdevelopments............................................ 15
Greengrowthrequiresfurtherinvestment.................................. 28
Betterskillsformoreinclusivegrowth ..................................... 31
Makingbetteruseofexistingskills ........................................ 40
Improvingthelabourmarketandsocialintegrationofimmigrants............. 44
Bibliography............................................................ 49
Annex.Progressinstructuralreform........................................... 53
Thematic chapters
Chapter1.Harnessingskillsformoreinclusivegrowth .......................... 57
Theimportanceofskillsandmainchallenges .............................. 58
Policiesensuringflexibleandcontinuouslyimprovingsupplyofskills.......... 65
Policiesensuringbetteruseofexistingskills................................ 74
Recommendationstoimproveskillsformoreinclusivegrowth.................... 80
Bibliography............................................................ 81
Chapter2.Reapingthebenefitsofadiversesocietythroughbetterintegration
ofimmigrants.......................................................... 85
Luxembourgbenefitsalotfromthelargeimmigrantpopulation,butintegration
couldimprove.......................................................... 86
Policiesforbetterlabourmarketandsocialintegration....................... 90
Improvingtheeducationaloutcomesofthechildrenofimmigrants............ 99
Recommendationstoimprovetheintegrationofimmigrants ..................... 105
Bibliography............................................................ 106
Boxes
1. Medium-termvulnerabilitiesoftheLuxembourg’seconomy............... 19
2. ThirdindustrialrevolutionistakingoffinLuxembourg ................... 32
1.1. TherestructuringofLuxembourg’ssteelindustry,1975-1987............... 61
2.1. Luxembourg’sdiversitycharter........................................ 91
OECDECONOMICSURVEYS:LUXEMBOURG©OECD2017 3
TABLEOFCONTENTS
Tables
1. Macroeconomicindicatorsandprojections.............................. 16
2. ImplementationofOECDrecommendationsonthefinancialsector ........ 20
3. ImplementationofOECDrecommendationsonfiscalandtaxpolicies
andonage-relatedspending .......................................... 27
4. Comparisonofinstalledcapacityforrenewableenergygeneration ......... 30
5. ImplementationofOECDrecommendationsongreengrowth.............. 31
6. ImplementationofOECDrecommendationsoneducationsystem.......... 49
Figures
1. LifeisgoodinLuxembourg............................................ 14
2. Macroeconomicdevelopmentsarehealthy.............................. 17
3. Evolutionofmacro-financialvulnerabilitiessince2007 ................... 18
4. FinancialservicescontributestronglytoGDPgrowth ..................... 19
5. Assetsundermanagementareatarecordhigh.......................... 20
6. Taxrevenuesfromthefinancialsectorarevolatile ....................... 21
7. Realhousepricesaregrowingstrongly ................................. 21
8. Increasingpricetorentratiopointstoovervaluation ..................... 22
9. Householdindebtednessisincreasing.................................. 22
10. Thereisamplefiscalspace............................................ 24
11. Publicdebtislowandsustainable...................................... 25
12. Taxrevenuesrelyoncorporateincometaxes............................ 25
13. Ageingcostsareprojectedtorise ...................................... 26
14. Netpensionreplacementratesarehigh ................................ 26
15. Averageeffectiveageoflabour-marketexitislow........................ 27
16. Greengrowthindicators.............................................. 29
17. CongestiontimesareamongthehighestinEurope....................... 30
18. Labourmarketpolarisationischangingthedemandforskills ............. 32
19. Somemeasuresofskillmismatcharehigh.............................. 34
20. Unemploymentratesarehigherforlow-skilledworkers .................. 35
21. GraderepetitionrateisamongthehighestintheOECD................... 35
22. Bettereducatedadultsparticipatemoreinlifelonglearning............... 37
23. Thenumberofstart-upsislaggingthebestEUperformers ................ 38
24. Obstaclestodoingbusinessstillexistinsomeareas...................... 38
25. Insolvencycostsarehigh ............................................. 39
26. Gendergapinperceptiononaccesstoentrepreneurialtraining
ispronounced....................................................... 40
27. Shareoftraininginactivelabourmarketpolicyspendingislow............ 41
28. Youngworkersoftenworkontemporarycontracts....................... 42
29. EmploymentprotectionforpermanentworkersisabovetheOECDaverage... 42
30. Mostpart-timeworkersarewomen.................................... 43
31. Thelargeimmigrantpopulationhasahighemploymentrate.............. 45
32. Luxembourghaslongattractedimmigrants............................. 45
33. Non-EUimmigrantsfacehigherunemployment ......................... 46
34. Childrenofimmigrantsunderperformbyawidemargin.................. 46
35. Performanceandimmigrantbackgroundofstudentsdifferbysecondary
educationtracks..................................................... 49
4 OECDECONOMICSURVEYS:LUXEMBOURG©OECD2017
TABLEOFCONTENTS
1.1. Highlabourproductivityreflectshighlevelofskills ...................... 58
1.2. Languageandcomputerskillsareaboveaverage......................... 59
1.3. Labourmarketpolarisationischangingthedemandforskills ............. 60
1.4. Somemeasuresofskillmismatcharehigh.............................. 62
1.5. TheoverallPISAresultsshowapersistentgap........................... 63
1.6. Thereisroomforfurtherimprovementofskills.......................... 63
1.7. Upskillingofthelabourforceislaggingbehindthebestperformers ........ 64
1.8. Participationratesarelowfortheyoungestandtheoldest ................ 64
1.9. Femaleunemploymentrateexceedsmale .............................. 65
1.10. Successfulcompletionratesinsecondaryeducationarelow............... 67
1.11. EnrolmentinVocationalEducationandTrainingishigh................... 68
1.12. Perceivedvocationaleducationandtrainingimageandqualityaremodest... 69
1.13. Theshareoftertiary-educatedpopulationishigh........................ 70
1.14. Studentsarenotinterestedinscienceandengineeringcareers ............ 71
1.15. Careerguidanceiswidespread ........................................ 71
1.16. Forolderworkersstudyingismorecostlythanworkplacetraining ......... 72
1.17. Youngworkersoftenworkontemporarycontracts....................... 75
1.18. Highmarginaltaxratescreateaninactivitytrap......................... 77
1.19. Highparticipationtaxratescreateanunemploymenttrap ................ 77
1.20. Workdisincentivesforsecondearnersarehigh.......................... 78
2.1. Migrationflowshavelongbeensubstantial,leadingtoalargeforeign-born
population.......................................................... 86
2.2. ImmigrantshavemainlycomefromEurope............................. 87
2.3. Immigrantshaveahighoverallemploymentrate ........................ 87
2.4. Immigrantshaveahigherproportionofprime-ageworkers ............... 88
2.5. Non-EUprime-ageimmigrantshaveanemploymentratedisadvantage..... 89
2.6. Theriskofpovertyishighamongnon-EUimmigrants.................... 90
2.7. Immigrantsarestronglyunder-representedinpublicsectorjobs........... 94
2.8. VeryfewimmigrantstakeLuxembourgishcitizenship .................... 96
2.9. Citizenshipindicators,2016........................................... 97
2.10. Theprocessingtimeforimmigrationofhighly-skilledworkersishigh ...... 98
2.11. Childrenofimmigrantsunderperformbyawidemargin.................. 99
2.12. Socio-economicstatushasalargeimpactonstudentperformance......... 100
2.13. Performanceandimmigrantbackgroundofstudentsdifferbysecondary
educationtracks..................................................... 102
2.14. Graderepetitionishigh,especiallyamongimmigrantstudents ............ 103
2.15. Disadvantagedschoolsfacegreatershortagesofeducationalresources ..... 104
OECDECONOMICSURVEYS:LUXEMBOURG©OECD2017 5
ThisSurveyispublishedontheresponsibilityoftheEconomicandDevelopment
Review Committee of the OECD, which is charged with the examination of the
economicsituationofmembercountries.
The economic situation and policies of Luxembourg were reviewed by the
Committee on 2 May2017. The draft report was then revised in the light of the
discussionsandgivenfinalapprovalastheagreedreportofthewholeCommitteeon
17 May2017. The Secretariat’s draft report was prepared for the Committee by
JanStráský and ÁlvaroPina under the supervision of PierreBeynet. Research
assistance was provided by Corinne Chanteloup and editorial assistance was
providedbyClaude-AnnieManga-Collard.
ThepreviousSurveyofLuxembourgwasissuedinMarch2015.
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BASICSTATISTICSOFLUXEMBOURG,2016
(NumbersinparenthesesrefertotheOECDaverage)*
LAND,PEOPLEANDELECTORALCYCLE
Population(million) 0.5 Populationdensityperkm2 222.8 (37.2)
Under15(%) 17.0 (17.9) Lifeexpectancy(years,2014) 82.3 (80.6)
Over65(%) 15.7 (16.6) Men 79.4 (77.9)
Foreign-born(%,2010) 40.5 Women 85.2 (83.3)
Latest5-yearaveragegrowth(%) -0.5 (0.6) Latestgeneralelection October2013
ECONOMY
Grossdomesticproduct(GDP) Valueaddedshares(%)
Incurrentprices(billionUSD) 59.9 Primarysector 0.2 (2.5)
Incurrentprices(billionEUR) 54.2 Industryincludingconstruction 12.3 (26.8)
Latest5-yearaveragerealgrowth(%) 3.5 (1.8) Services 87.4 (70.8)
Percapita(000USDPPP) 108.3 (41.0)
GENERALGOVERNMENT
PercentofGDP
Expenditure 41.2 (40.9) Grossfinancialdebt 27.6 (111.8)
Revenue 42.7 (38.9) Netfinancialdebt -50.4 (72.8)
EXTERNALACCOUNTS
Exchangerate(EURperUSD) 0.904 Mainexports(%oftotalmerchandiseexports)
PPPexchangerate(USA=1) 0.858 Manufacturedgoods 37.8
InpercentofGDP Machineryandtransportequipment 27.0
Exportsofgoodsandservices 228.1 (53.9) Chemicalsandrelatedproducts,n.e.s. 10.4
Importsofgoodsandservices 191.5 (49.3) Mainimports(%oftotalmerchandiseimports)
Currentaccountbalance 4.7 (0.3) Machineryandtransportequipment 34.2
Netinternationalinvestmentposition(2014) 32.6 Manufacturedgoods 15.7
Chemicalsandrelatedproducts,n.e.s. 11.4
LABOURMARKET,SKILLSANDINNOVATION
Employmentratefor15-64year-olds(%) 65.6 (67.0) Unemploymentrate,LabourForceSurvey(age15andover)(%) 6.3 (6.3)
Men 70.5 (74.7) Youth(age15-24,%) 18.7 (13.0)
Women 60.4 (59.3) Long-termunemployed(1yearandover,%) 1.9 (2.2)
Participationratefor15-64year-olds(%,2015) 70.9 (71.3) Tertiaryeducationalattainment25-64year-olds(%,2015) 39.8 (35.0)
Averagehoursworkedperyear(2015) 1507 (1766) GrossdomesticexpenditureonR&D(%ofGDP,2015) 1.3 (2.4)
ENVIRONMENT
Totalprimaryenergysupplypercapita(toe,2015) 7.4 (4.1) CO2emissionsfromfuelcombustionpercapita(tonnes,2014) 18.6 (9.4)
Renewables(%,2014) 5.2 (9.6) Waterabstractionspercapita(1000m3,2014) 0.1
Exposuretoairpollution(morethan10µg/m3ofPM2.5, 99.4 (75.2) Municipalwastepercapita(tonnes,2015) 0.7 (0.5)
%ofpopulation,2015)
SOCIETY
Incomeinequality(Ginicoefficient,2013) 0.281 (0.311) Educationoutcomes(PISAscore,2015)
Relativepovertyrate(%,2013) 8.4 (11.1) Reading 481 (493)
Mediandisposablehouseholdincome(000USDPPP,2013) 38.5 (22.0) Mathematics 486 (490)
Publicandprivatespending(%ofGDP) Science 483 (493)
Healthcare(2015) 7.2 (9.0) Shareofwomeninparliament(%) 28.3 (28.7)
Pensions(2013) 8.5 (9.1) Netofficialdevelopmentassistance(%ofGNI) 1.00 (0.39)
Education(primary,secondary,postsec.nontertiary,2013) 2.9 (3.7)
Betterlifeindex:www.oecdbetterlifeindex.org
* WheretheOECDaggregateisnotprovidedinthesourcedatabase,asimpleOECDaverageoflatestavailabledataiscalculatedwhere
dataexistforatleast29membercountries.
Source: Calculationsbasedondataextractedfromthedatabasesofthefollowingorganisations:OECD,InternationalEnergyAgency,
WorldBank,InternationalMonetaryFundandInter-ParliamentaryUnion.