HOW GOOD IS YOUR JOB?
MEASURING AND ASSESSING JOB QUALITY
What makes a good job?
Job quality
Most people spend a substantial amount of time at work, and work
for a significant part of their life. The jobs people hold are therefore
one of the most important determinants of their well-being. But what
are the features of job quality that affect well-being? The OECD
framework for measuring and assessing job quality considers three
objective and measurable dimensions of job quality that are both
important for worker well-being and relevant for policy. Together,
they provide a comprehensive assessment of job quality.
Earnings quality refers to the extent to which the earnings received by workers in their jobs contribute
to their well-being. While the level of earnings provides a key benchmark for assessing their contribution
to material living standards, the way earnings are distributed across the workforce also matters for
well-being. Therefore, the OECD measures earnings quality by an index that accounts for both the
level of earnings and their distribution across the workforce (Figure 1).
Labour market security captures those aspects of economic security that are related to the probability
of job loss and its economic cost for workers. This is measured by the risk of unemployment which
encompasses both the risk of becoming unemployed and the expected duration of unemployment.
It is measured by the degree of public unemployment insurance, which takes into account both the
coverage of the benefits and their generosity (Figure 2).
Quality of the working environment captures non-economic aspects of job quality and includes
factors that relate to the nature and content of work performed, working-time arrangements and
workplace relationships. Jobs that are characterised by a high level of job demands such as time
pressure or physical health risk factors, combined with insufficient job resources to accomplish the
required job duties, such as work autonomy and social support at work, constitute a major health risk
factor for workers. Therefore, the quality of the working environment is measured by the incidence
of job strain, which is a combination of high job demands and limited job resources (Figure 3).
Job quality across OECD countries
Figure 1. Earnings quality
PPP-adjusted gross hourly earnings in USD, 2013 or the latest year available
Earnings quality
Average earnings
Earnings inequality (right axis)
USD, PPPs
%
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
40
35
30
25
20
15
10
5
0
Note: The data refer to 2012 for France, Italy, Poland, Spain, Sweden and Switzerland; 2011 for Israel and 2010 for Estonia, Luxembourg, Netherlands, Slovenia and
Turkey. Generalized means approach is used as an aggregation tool to compute earnings quality measures, assuming a high inequality aversion.
Source: OECD Job Quality database (2016).
Figure 2. Labour market insecurity
Risk of becoming unemployed and its expected cost as a share of previous earnings, 2013
%
Labour market insecurity
Unemployment risk
Unemployment insurance (right axis)
40
%
100
35
90
80
30
70
25
60
20
50
15
40
30
10
20
5
10
0
0
Note: The data for Chile refer to 2011 instead of 2013.
Source: OECD Job Quality database (2016).
Figure 3. Job strain
Incidence of job strain, 2015
%
80
70
Job strain
Excessive demands
Insufficient resources
Other OECD countries (2005)
EU countries
60
50
40
30
20
10
0
Note: The data on Turkey are based on results of the 2005 European Working Conditions Surveys (EWCS).
Source: OECD Job Quality database (2016) based on the 6th European Working Conditions Survey (www.eurofound.europa.eu/surveys/2015/sixth-europeanworking-conditions-survey-2015) for 2015 and International Social Survey Program Work Orientations Module III for 2005.
2
How do OECD countries compare?
Overall, job quality outcomes vary substantially across OECD countries along each of the three dimensions:
•• Australia, Austria, Denmark, Finland, Germany, Luxembourg, Norway, and Switzerland are among
the best performers. These countries do relatively well in at least two of the three dimensions of job
quality, without any outcomes in the bottom-10 of the ranking.
•• Belgium, Canada, the Czech Republic, France, Ireland, Israel, Japan, Korea, Mexico, the Netherlands,
New Zealand, Slovenia, Sweden, the United Kingdom, and the United States display average
performance. Over the three dimensions of job quality, most of these countries display no more than
one outcome in the top-10 or the bottom-10 of the ranking.
•• Estonia, Greece, Hungary, Italy, Poland, Portugal, the Slovak Republic, Spain and Turkey do relatively
badly in two or all of the three dimensions of job quality. In addition, none of these countries performs
very well in at least one of these dimensions.
How do workers compare?
Looking at job quality outcomes across socio-economic groups provides new insights into labour market
inequalities by shedding further light on the nature and depth of the disadvantages faced by some population
groups.
•• The worst off are youth and low-skilled workers. Not only do they have the poorest performance in
terms of employment and unemployment rates but they also have the worst outcomes with respect
to job quality: lower earnings quality, considerably higher labour market insecurity and higher job
strain (especially for low skilled).
•• By contrast, high-skilled workers perform well on all dimensions. Returns to skills not only show up
in the form of higher employment but also of better jobs in terms of higher earnings quality, lower job
insecurity and lower job strain.
•• For women, the picture is mixed: their employment rates are still substantially lower than those for
men, and women suffer from a large gap in earnings quality. However, women do not differ much
from men with respect to labour market security and are less likely than men to experience job strain.
Figure 4. Job quality outcomes by socio-demographic group
Cross-country averages
Panel A. Earnings quality
PPP-adjusted gross hourly earnings in
USD, 2013
Earnings quality
USD, PPPs
30
Average earnings
20
5
%
%
0.5
14
50
70
0.4
0.35
12
40
10
60
50
30
8
40
0.25
0.15
0.1
0.05
0
Job strain
%
0.2
10
Panel C. Job strain
Incidence of job strain, 2015
Index
0.3
15
Labour market insecurity (left scale)
Unemployment risk
Unemployment insurance
Inequality (right scale)
0.45
25
Panel B. Labour market insecurity
Risk of becoming unemployed and its expected
cost as a share of previous earnings, 2013
0
6
20
4
30
20
10
2
10
0
0
Note: In Panel A, earnings quality is based on national-level average inequality.
Source: OECD Job Quality database (2016).
3
0
Excessive demands
Insufficient resources
Job quality over the recent crisis and recovery
The deep and often prolonged economic crisis has taken a toll on the labour markets of most OECD
countries, with often dramatic increases in unemployment and its duration. The crisis has also affected
those who remained in employment, changing remarkably the quality of existing jobs. Overall, the evidence
suggests:
•• Earnings quality was heavily affected by the fact that the jobs lost during the crisis were predominantly
low-paid. This led to an apparent increase in earnings quality on average (Figure 5). However, if one
keeps the employment structure constant, two thirds of the countries experienced a deterioration of
the earning quality.
Figure 5. Changes in earnings quality
Percentage change, 2007-2013
Earnings quality
%
Average earnings
Earnings inequality
60
50
40
30
20
10
0
-10
-20
-30
Note. The data refer to changes between: 2006 and 2012 for Italy and Switzerland; 2006 and 2013 for Chile; 2008 and 2013 for Denmark; 2007 and 2012 for France,
Poland, Spain and Sweden; 2006 and 2010 for Estonia and the Netherlands; and 2008 and 2011 for Israel. Earnings quality and average earnings in real USD;
Source: OECD Job Quality database (2016).
•• Labour market security worsened in most OECD, reflecting the combination of a substantially
higher risk of unemployment with lower unemployment insurance. The fall was most noticeable in
Spain and Greece.
Figure 6. Changes in labour market security
Percentage change, 2007-2013
%
Labour market security (inverted)
Unemployment risk
Unemployement insurance
400
300
200
100
0
-100
-200
-300
-400
-500
Source: OECD Job Quality database (2016).
•• Quality of the working environment changed differently across the OECD. While some countries
experienced a worsening in working conditions as a result of the crisis, in some other countries workers
who managed to keep their job saw their working conditions improve. Overall, changes were limited.
4
Figure 7. Changes in the quality of the working environment
Percentage change, 2005-2015
Quality of the working environment
%
Excessive demands
Insufficient resources
80
60
40
20
0
-20
-40
-60
-80
Source: OECD Job Quality database (2016), based on the 4th European Working Conditions Survey for 2005 and the 6th European Working Conditions Survey
(Forthcoming) for 2015.
For a comprehensive assessment of how the crisis affected job quality, all three dimensions need to be
considered jointly. Germany, for instance, not only experienced an increase in the employment rates,
but also an improvement in all aspects of job quality. On the contrary, Greece experienced both a sharp
rise in unemployment and a fall in earnings quality and labour market security (while the incidence of job
strain remained stable). In the United Kingdom, where employment after the initial dip in the early years
of the crisis is now almost back to pre-crisis levels, earnings quality decreased over the period but labour
market security fell only slightly, while the quality of the working environment was unaffected. In other
OECD countries, the effects of the crisis were much more mixed. In Portugal, for example, earnings quality
stagnated and labour market security fell considerably because of the upsurge in unemployment that is
still far from being reabsorbed, while quality of the working environment improved for those people still
employed. Conversely, in Sweden earnings quality improved but labour market security decreased and
the quality of the working environment worsened (albeit from a relatively high level).
Is there a trade-off between job quantity and job quality?
Does improving job quality go at the expense of higher employment rates? If one analyses the relationship
between job quantity and quality across the OECD countries, there appears to be no major trade-offs
between the two but rather, potential synergies (see the positive correlation in Figure 8): countries that do
relatively poorly with respect to job quality tend to have relatively low employment rates and vice versa.
The relationship between quantity and quality is more complex in the short-term as shown above in the
context of the global financial and economic crisis. While a number of countries have managed to keep or
even improving both the number of job and their quality, others hard hit by the crisis with major job losses
among the low skilled and low paid, have seen some dimensions of job quality also deteriorate (labour
market security) but others remaining stable or even improving, resulting at least in part from the fact that
the surviving jobs were of better quality in the first place.
Figure 8. Job quantity versus job quality
Panel B. Labour market security
-5
Earnings quality, USD PPPs
30
LUX
BEL
DEU
DNK
25
IRL
ESP
15
PRT
GRC
10
NZL
USA
SVN JPN GBR
HUN
KOR
SVK
TUR
5
ISL
CAN
FRA
ITA
NOR
AUS
FIN AUT
20
CHE
Labour Market Security, %
35
POL
ISR
CZE
EST
CHL
SVN
0
FRA
BEL
5
DEU JPN DNK
LUX
KOR
AUT
ISR
FIN
NLD
CZE
CAN
MEX
HUN
POL IRL
TUR
CHL
10
ITA
15
PRT
Panel C. Quality of the working environment
10
NOR
FIN
30
AUS
NZL
GBR
USA SWE
EST
SVK
20
ESP
25
GRC
30
50
BEL
40
ITA
50
ESP
60
60
70
80
35
EST
IRL
DNK
LUX
CZE
FRA
PRT
AUT
CHE
AUS
NOR
USA
GBR
SWE CAN
NLD
MEX DEU
JPN
HUN
ROU
SVN
SVK
POL
KOR
GRC
70
35
40
ISR
MEX
0
30
NZL
20
ISL
CHE
Job strain, %
Panel A. Earnings quality
45
55
65
Employment rate, %
75
Employment rate, %
Source: OECD Job Quality database (2016). Same years used as in Figures 1, 2 and 3.
5
TUR
80
30
40
50
60
70
80
Employment rate, %
Job quality in emerging economies
In most emerging economies, the main challenge is not a lack of jobs, since open unemployment tends
to be relatively low. Rather, it is the lack of quality jobs that raises greatest concerns.
Compared to OECD countries, job quality is significantly lower in every dimension, especially for low-skilled
workers (Figure 9). Earnings quality is generally lower due to a considerable gap in average earnings,
but also as a result of substantially higher levels of earnings inequality. Labour market insecurity due to
unemployment is similar to the OECD average for most emerging economies. However, the risk of falling
into extreme low pay while employed represents a second significant source of insecurity. As a result,
overall labour market insecurity tends to be higher in emerging economies than in more advanced ones.
The quality of the working environment is generally lower, which is reflected in a much higher incidence
of very long working hours in many of the economies considered.
Figure 9. Job quality in emerging economies
Earnings quality
Quality of the working environment
(Incidence of very long working hours)
Labour market insecurity
Risk of unemployment
Risk of extreme low pay
OECD average
Russia
Chile
Argentina
Urban China
Costa Rica
Mexico
Turkey
Brazil
Colombia
India
South Africa
%
Indonesia
0.0
5.0
10.0
0.0
15.0
10.0
20.0
30.0
40.0
USD, PPPs
%
0.0
10.0
20.0
30.0
Source: Chapter 5, OECD Employment Outlook 2015.
Youth and low-skilled workers are the worst off in terms of job quality in emerging economies, as in OECD
countries. These two groups cumulate poor outcomes along the three dimensions of job quality together
with low employment rates. Job quality is also substantially lower for workers with informal jobs compared
to those in formal employment (Figure 10). Moreover, informality is hard to escape and starting a career
with an informal job may have negative consequences for future labour market prospects.
Figure 10. Job quality among formal and informal workers in emerging economies
Panel A. Earnings quality
PPP-adjusted gross hourly earnings in
USD, 2010
USD, PPPs
Earnings quality
Average earnings
Inequality (right scale)
7
%
1.0
6
0.8
Panel B. Labour market insecurity
Risk of low pay, 2010
%
Risk of low-pay
Probability of entering low-pay status
Probability of exiting low-pay status (right axis)
Incidence of very long working hours
%
100
14
12
80
10
5
0.6
8
60
3
0.4
6
40
1
0
0.0
Formal
Informal
10
6
4
0.2
%
12
8
4
2
Panel C. Quality of the working environment
Incidence of very long working hours,
2010
2
0
Formal
Informal
Source: Chapter 5, OECD Employment Outlook 2015.
6
4
20
2
0
0
Formal
Informal
Assessing the quality of working lives
Job quality relates not only to the features of the current job but also, and often more importantly, to
career prospects. Therefore, it is important to measure not only job quality at one point in time, but also
over entire working lives, which depends to a large extent on the prospects for career advancement, as
well as on earnings fluctuations and the risk of unemployment.
Analysing the quality of working lives requires taking a dynamic perspective to account for mobility between
jobs as well as in and out of employment. Earnings mobility matters from the perspective of individual
workers because it may reflect career advancement, but it can also be a source of earnings insecurity.
Mobility matters for society at large because it can smooth out earnings differences between workers
over time, possibly making earnings inequality at any point in time of less concern.
On average, mobility reduces inequality by about a quarter over the working life (as simulated over a period
of 20 years) (Figure 11). This means that about three-quarters of earnings inequality at a point in time is
permanent.
Figure 7.The equalising effect of mobility
Figure 11. The earnings equalising effect of mobility
Gini active
coefficient persons
of active persons
(monthly earnings,
index) based
on simulations
years
Gini coefficient among
(monthly
earnings,
index)
based over
on 20
simulations
over 20 years
0.45
Long-term inequality
Short-term inequality
0.4
0.35
0.3
0.25
0.2
0.15
0.1
Source:Employment
OECD calculations
based2015.
on the European Union Statistics on Income and Living Conditions (EU-SILC) for European countries and Turkey,
Source: Chapter 4, OECD
Outlook
Household, Income and Labour Dynamics (HILDA) for Australia, German SOcio-Economic Panel (GSOEP) for Germany, Keio Household Panel Survey
(KHPS) for Japan, Korean Labor and Income Panel Study (KLIPS) for Korea, Swiss Household Panel (SHP) for Switzerland and Survey of Income and
Program Participation
(SIPP) for theare
Unitedlargely
States.
Life-time earnings
differentials
determined in the first ten years of workers’ careers.
Earnings
mobility is more than 50% higher for young people than for prime-age and older workers. Mobility is also
higher for low-skilled workers. This is due to their higher risk of becoming unemployed, rather than a higher
rate of wage mobility while in employment.
Figure 12. Earnings mobility by age and education group
%
20
18
16
14
12
10
8
6
4
2
0
Youth
Prime-age
Older workers
Low
Age
Medium
High
Education
Source: Chapter 4, OECD Employment Outlook 2015.
Overall, there is no clear correlation between mobility and inequality, and the belief that higher inequality
is the price to pay for higher mobility is not supported by the available evidence.
7
Statistical Tools
OECD Job Quality Database
OECD Inventory of Survey
Questions on the Quality of the
Working Environment
This database is structured around
the three main dimensions of the
OECD Job Quality framework. It
displays country level information
on Earnings Quality, Labour Market
Security and the Quality of the
Working Environment as well as
their sub-dimensions. Data are
available between 2005 and 2015
for OECD countries. The figures
can be disaggregated by gender,
by age (15-29, 30-49 and 50-64), or
by education groups (low, medium
and high).
This inventory maps existing surveys
that provide information on the
characteristics of people’s jobs.
It reviews international surveys
conducted since the early 1990s
that are based on individuals’ selfreported assessment of their current
job, and covers around 160 countries
over 25 years. It also provides users
with detailed documentation on
the questions used in the various
surveys for measuring different
aspects of work.
h t t p : //s t a t s . o e c d . o r g / I n d e x .
aspx?DataSetCode=JOBQ
h t t p : // s t a t s . o e c d . o r g / I n d e x .
aspx?DataSetCode=JOBQ_I
Further reading
• OECD (2013), “Well-being in the workplace: Measuring job quality”, Chapter 5, How’s Life? 2013:
Measuring Well-being, OECD Publishing, Paris. http://dx.doi.org/10.1787/how_life-2013-9-en
• OECD (2014), “How good is your job? Measuring and assessing job quality”,
Chapter 3, OECD Employment Outlook 2014, OECD Publishing, Paris.
http://dx.doi.org/10.1787/empl_outlook-2014-6-en
• OECD (2015), “Enhancing job quality in emerging economies”, Chapter 5, OECD Employment Outlook
2015, OECD Publishing, Paris. http://dx.doi.org/10.1787/empl_outlook-2015-9-en
• OECD (2015), “The quality of working lives: Earnings mobility, labour market risk and long-term inequality”
Chapter 4, OECD Employment Outlook 2015, OECD Publishing, Paris. http://dx.doi.org/10.1787/
empl_outlook-2015-8-en
• Cazes, S., A. Hijzen and A. Saint-Martin (2015), “Measuring and assessing job quality: The OECD job quality
framework”, OECD Social, Employment and Migration Working Papers No. 174. OECD Publishing, Paris.
http://dx.doi.org/10.1787/5jrp02kjw1mr-en
• Hijzen, A. and B. Menyhert (2016), “Measuring labour market security and its implications for individual
well-being”, OECD Social, Employment and Migration Working Papers No. 175. OECD Publishing,
Paris. http://dx.doi.org/10.1787/5jm58qvzd6s4-en
• Garnero, A., A. Hijzen and S. Martin (2016), “More unequal, but more mobile? Earnings inequality
and mobility in OECD countries”, OECD Social, Employment and Migration Working Papers, No. 177.
OECD Publishing, http://dx.doi.org/10.1787/5jm3p5m7ccr2-en
The project is a joint undertaking between the OECD Directorate for Employment, Labour
and Social Affairs and the OECD Statistics Directorate. For more information, please visit
www.oecd.org/statistics/job-quality.htm or contact [email protected].
This project has been produced with the financial and substantive assistance of the European Union as part of the OECD project “Defining, Measuring and
Assessing Job Quality and its Links to Labour Market Performance and Well-Being” [VS/2013/0180 (SI2.666737)]. The contents of this publication are the sole
responsibility of the OECD and can in no way be taken to reflect the views of the European Union.
February 2016