Understanding Labor Market Trends

The relocation decisions of male-female couples are predominantly determined by what's best for the man's career: 1. Couples are more likely to relocate when a man is laid off than after a woman is. 2. Men's earnings increase following a couple's move to a new commuting zone, while women's earnings stay the same or decline. This in part because women spend less time working, particularly in the first year after the move when they are more likely than men to be job hunting. The gender gap persists for at least five years and is largest among couples who are in their 20s. The researchers study Germany and Sweden, and attribute the results to relocation decisions being driven by antiquated gender norms. They conclude that "households in both countries place less weight on income earned by a woman compared to a man, particularly in Germany." By Seema Jayachandran, Lea Nassal, Matthew J. Notowidigdo, Marie Paul, Heather Sarsons, and Elin Sundberg. https://lnkd.in/eHSXi5Mj

This is not your usual report! The World Bank is publishing today its fourth “Country Climate and Development Report” summary, now covering 93 economies, with a deep dive on the implications of jobs and employment. This report is unique in that it is not based on a global model, like most other global publications, but on the combination of many individual-country reports, each prepared by a separate country team and reviewed by the government of the country, local research centers, universities, and key CSOs and private sector actors. While it makes the aggregation more challenging, the level of granularity this approach offers is unparalleled. Key highlights include that climate adaptation could yield labor income benefits equivalent to 150 million jobs by 2050, a combination of new jobs created by investments in infrastructure or nature-based solution and jobs that are protected from negative shocks and impacts. At the same time, the shift to low-emission development pathways, with emissions reduced by 71 percent by 2050, would have a small and most of the time positive impacts on GDP and labor income. However, while the effect on aggregate employment is expected to be small, countries need to prepare for significant sectoral and regional shifts, with some sectors creating new opportunities, while other sectors will decline. Looking at climate impacts and policies in the context of many other megatrends – like demographic change, digitalization and AI – the report highlights concrete measures to reduce five frictions that prevent workers to adjust to a rapidly changing labor market: skills, space, time, norms, and wages. The report is in English, but we have two-page summaries in English, Chinese, Spanish, French, and Portuguese. All the CCDRs are still available on the CCDR page. https://lnkd.in/g3GqkuhH

Did you know Australian women just set a record?🏅 Women's labour force participation rate reached a new high of 63.5% in January 2025. That's a half-percentage-point jump from the previous month. Which is big in labour statistics land. It's this rise in women's labour force participation that drove the overall increase in the national rate (as men's participation rate fell slightly). Proof why it's important to always add a gender lens. January is the month where many new jobseekers and new hires are joining the labour market. As well as mothers who have been juggling summer holiday demands, and whose children will now be starting childcare or school, changing their working availability and preferences. Some will still be in the process of looking for opportunities and yet to be matched to a suitable job. This start-of-year job searching can help explain why the unemployment rate ticked up very slightly to 4.1% (again it was women's unemployment rate that drove the overall change, as men's rate was unchanged). Also today we found out Australia's latest gender pay gap, reported for November 2024. Men are earning on average $2073 in full-time weekly wages, compared to $1826 for women. That's a gap of $247 a week, tallying to around $12,800 a year. It equates to women earning 11.9% less than men on average, a gap which has widened since the last calculation (11.5% in May 2024). Men's earnings surged more rapidly than women's during this six-month period, particularly in sectors such as the Real Estate where jobs growth is strong. And partly the gender earnings gap reflects compositional changes. For example, between May and Nov 2024, we saw a notable expansion in women's employment in the Preschool and School Education sector. But because that's not a high-paying sector, it can dampen the calculation of women's overall average earnings. The Australian Government's legislated pay rise for Early Childhood Education and Care Workers came into effect in Dec 2024, so will be reflected in the next gender pay gap calculation. These numbers come fresh from the Australian Bureau of Statistics' Labour Force and Average Weekly Earnings datasets released yesterday. The takeaway from these numbers is that women's opportunities to join and stay in the paid workforce – and gain economic independence – continue to grow. Government policies, company initiatives, working-from-home and hybrid work, as well as the financial necessity of cost of living pressures, are all likely factors contributing to this record-breaking rise in women's workforce participation. But, we still need sustained and strengthened efforts to undo patterns of gender concentration, rectify the undervaluation of female-concentrated sectors, and unravel the biases and barriers that still underpin the gender pay gap. There are still more records to be broken. #genderpaygap #gendergap #genderlens #womenintheworkforce #genderequality #economics #labourmarket #ausecon

US Job Openings Jump to Nearly Two-Year High as Hiring Slows The U.S. Bureau of Labor Statistics reported that job openings increased to 7.618 million in April, well above expectations for 6.860 million and up from 6.887 million in March. At the same time, hires fell to 5.116 million from 5.535 million, while quits declined to 2.977 million from 3.160 million. Layoffs and discharges edged lower to 1.692 million. The Job Openings and Labor Turnover Survey, better known as JOLTS, is one of the Federal Reserve's preferred measures of labor demand. Job openings measure positions employers are actively trying to fill, while hires measure jobs actually being filled and quits are often viewed as a measure of worker confidence. At first glance, today's report looks exceptionally strong and will likely be interpreted as a positive surprise for the labor market. Job openings surged by more than 700,000 in a single month and came in far above economist expectations. Not surprisingly, economists will likely spend the coming days debating exactly what to make of such a large increase, particularly given the outsized contribution from Professional and Business Services. Whether that reflects a genuine acceleration in labor demand, seasonal effects, timing issues, or something that is revised later remains to be seen. But the broader report tells a more nuanced story than the headline alone. Hiring declined. Quits declined. Workers became slightly less likely to voluntarily leave their jobs. In other words, employers are reporting more open positions, but workers are not behaving as though opportunities have suddenly become easier to find. That disconnect matters because many Americans are still experiencing a labor market that feels far more challenging than the aggregate statistics suggest. Workers in healthcare, skilled trades, and many service industries may continue to see plentiful opportunities. Workers in many white-collar professions often describe a very different reality where job searches take longer, competition is more intense, and open positions attract hundreds of applicants. Both experiences can be true at the same time. This helps explain why labor market sentiment and labor market data have often appeared disconnected over the past year. A labor market can remain healthy overall while still feeling difficult for specific groups of workers. Consumers do not make spending decisions based solely on unemployment rates. They make decisions based on how secure they feel in their jobs and how confident they are that they could find another one if necessary. A labor market where employers are posting jobs but workers remain hesitant to leave their current positions can still produce a cautious consumer, even when the headline data appears strong. At Havas Edge, we closely monitor labor market data because shifts in employment confidence often influence consumer behavior long before they appear in broader economic indicators.

The Labor Market is not getting looser, yet. Although payroll gains have downshifted, the labor market has yet to exhibit the typical signs of easing. Our Labor Market Tightness Index remains stuck in a narrow band, and the unemployment rate is treading water rather than drifting higher. In other words, the mechanical link between slower hiring and greater slack has not asserted itself, at least not so far. Immigration policy is a central reason. A pullback in net inflows is already damping overall population growth and therefore consumer demand, but the larger effect shows up on the supply side. Undocumented immigrants are disproportionately of prime working age, and stepped-up deportation efforts have pushed many to stay in the country yet avoid formal employment. This hidden labor supply, once a buffer for employers, has receded sharply. Meanwhile, the sources of weaker labor demand and weaker labor supply are misaligned. Artificial-intelligence adoption is trimming hiring plans mostly in office and other white-collar occupations, whereas the supply squeeze is concentrated in blue-collar and manual-service roles where undocumented workers have long been over-represented. Those cross-currents are unlikely to resolve quickly. The most plausible near-term outcome is a bifurcated market: looser conditions and softer wage pressure for knowledge workers, alongside persistent, or even intensifying, tightness for employers seeking construction crews, warehouse staff, and other hands-on talent. #labormarkets #laborshortages #recruitment #immigration

Demographic change is becoming one of Europe's defining workforce challenges. This week, the European Commission published its latest report on demographic transformation, highlighting long-term trends that will shape Europe's economy and workforce. The figures are significant. By 2050, almost one in three people in the EU will be aged 65 or over, compared with around one in five today. The report also highlights growing labour shortages, pressure on education and training systems, widening regional workforce challenges, and the fact that around 20% of working-age people remain outside the labour market. Approximately 8 million young people are also not in education, employment or training (NEET). For business leaders, these trends raise important questions. Skills shortages remain a challenge, but demographic change adds another layer of complexity. As the workforce evolves, organisations will need to think carefully about how they attract, develop and retain specialist talent. Across the STEM markets we support at SThree, we see increasing focus on building capability for the future, not simply responding to today's hiring needs. The Commission highlights several priorities, including increasing labour market participation, investing in skills, supporting lifelong learning and unlocking untapped talent across Europe. No single organisation can solve demographic change, but workforce decisions made today will help determine how well businesses adapt over the coming decade. How is your organisation preparing for the demographic changes shaping Europe's workforce?

We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: We’ve wrapped up the holiday season and stepped into 2025, what does the data tell us about where we’re headed? Our December SmartMatch Employment Report shows that while overall employment was up 7.6% YoY, we saw a slight dip of -0.1% MoM, the first in over a year. Median hourly wages continued their steady climb, reaching $42.20 (+4.5% YoY), but not all sectors felt the same momentum. Winners: Tech: Median hourly rate hit $63.50/hour (+3.7% MoM). Demand for skilled talent shows no signs of slowing. Construction: Annual wage growth of +6.9% YoY highlights the resilience of this sector. Lagging sectors: Retail & Hospitality: A soft holiday season with just +3.8% YoY employment growth and wages dipping -0.1% MoM—proof that consumer confidence impacts business decisions. Casual workforce: Employment rose +13.3% YoY, but average hours dropped significantly (-10.7% QoQ), showing more shifts, but fewer hours. What stands out to me? Workers aged 45–54 saw the highest wage growth (+5.5% YoY), but younger employees (18–24) saw reduced hours (-1.3% YoY), indicating that employers may be opting for experience and stability in uncertain times. This data shows that while optimism remains, businesses are still navigating increased costs, compliance pressures, and shifting workforce expectations. The question for 2025 is: how do we build resilience and growth? Check out our full report here: https://lnkd.in/gwMTKbSf

India’s Economy Has a Missing Engine: Women Especially women from lower-income backgrounds. A McKinsey study estimated that India could add $770 billion to GDP by 2025 by simply advancing gender parity in work. But instead, female labor force participation fell from 32% (2005) to ~20% (2020). https://lnkd.in/dvys4E6f Despite progress in some areas, female labor force participation in India is among the lowest in the world, even lower than some Sub-Saharan African countries. Why Are So Many Poor Women Underemployed or Not Properly Utilized? 1. Social and Cultural Barriers • Deep-rooted patriarchy restricts women’s mobility, especially in rural or conservative areas. • Girls are often seen as temporary earners, their “real role” is expected to be at home. 2. Safety and Mobility • Public transport is unsafe or unavailable, making it harder for women to travel to work. • Fear of harassment, especially in cities or during night shifts, keeps families from letting women work. 3. Unpaid Labor at Home • Women spend hours daily doing unpaid work: cooking, cleaning, child care, elder care. • This invisible labor is neither recognized nor redistributed. • Poor women, in particular, bear the double burden of poverty and gendered expectation. 4. Lack of Suitable Jobs - There is no structured pathway from informal to formal employment. 5. Policy & Structural Failure • Skill development programs often don’t reach women or are too generic and disconnected from market realities. • No large-scale, nationwide push for rural women entrepreneurship, decentralized production, or employment guarantees for women. • Schemes exist, but access is broken due to middlemen, corruption, or lack of information. Poor women: • Walk miles for water • Raise children with limited resources • Cook without clean fuel • Manage micro-budgets like CFOs of households Yet the system never sees them as ‘employable’ or ‘productive’. What Can Change This? 1. Localized employment: Bring dignified work to villages (e.g., food processing, crafts, decentralised manufacturing). 2. Safe, affordable transport: So women can commute without fear. 3. Women-led cooperatives and micro-enterprises: Let women own their work, not just participate. 4. Recognition of unpaid work: Design policies around time poverty, not just joblessness. 5. Mindset shift: From “allowing” women to work to realizing they hold the key to national growth. We talk of “demographic dividend” but leave half the population on the sidelines. A country that sidelines its women isn’t just unjust, it is chronically underperforming.

Surveys suggest that fathers fear disadvantages in the labor market, which prevents them from taking parental leave. But is this fear justified? Find out in our new discussion paper "Parental Leave and Discrimination in the Labour Market" (joint with Julia S., Clara Welteke, and Doris Weichselbaumer): https://lnkd.in/ejBRKC7G Based on a large-scale field experiment, we analyze whether fathers and mothers face #discrimination in the hiring process based on their #parental leave in three different occupations. We find that: --> Fathers who took parental leave in a female-dominated or gender-neutral occupation are not less likely to be invited to a job interview compared to fathers who did not take leave. However, in the male-dominated occupation, fathers who have taken long (not short!) parental leave are penalized. --> There is clear evidence for strong #gender discrimination in hiring, irrespective of parental leave: Fathers are treated less favorably than mothers in the female-dominated and the gender-neutral occupation, while the opposite is true for the male-dominated occupation. --> This suggests the presence of strong gender norms concerning the perception of ideal employees in different occupations. Thus, although we find evidence of discrimination due to parental leave for fathers, discrimination due to gender is considerably higher and present in all three occupation types. Since gender discrimination often arises from social norms about gender roles in the family and the labor market, encouraging more fathers to take parental leave - and thereby "normalizing" their involvement in family care - could help reduce both discrimination against fathers who share caregiving responsibilities with their partners and gender discrimination in general. DIW Berlin - German Institute for Economic Research Berlin School of Economics University of Potsdam Johannes Kepler Universität Linz

Demographics are destiny. Again. A strong piece in the Financial Times lays out five ways demographic shifts are already transforming the global economy — from labour shortages to the redesign of pensions and healthcare systems. The core reality is simple: the world is getting older and, in many places, smaller. Fewer young workers. More people living longer. And a growing gap between the institutions we built for 20th-century life courses and the realities of 21st-century longevity. Some of the consequences highlighted in the article: • Labour shortages pushing companies toward automation and AI • Ageing societies reshaping growth prospects and public finances • Immigration becoming economically essential (even when politically difficult) • Pension and healthcare systems under structural strain • Longer working lives becoming the norm rather than the exception In other words, demographics are no longer a background trend. They are becoming the central organising force of the global economy. For business leaders, policymakers and investors alike, demographic literacy is quickly becoming a strategic advantage. Those who understand the longevity shift — and redesign work, careers and institutions accordingly — will have the edge. Well worth the read. (Great graphs)