https://www.oecd.org/en/publications/oecd-employment-outlook-2026_7e710f...
The OECD Employment Outlook looks at the latest labour market developments and prospects in OECD member countries. This edition also highlights that the geography of opportunity matters. The places where people live shape their chances of finding good jobs and moving up the income ladder, with large and persistent gaps in employment, unemployment and disposable incomes being present across regions.
Local labour markets are also being reshaped by trade and technology shocks, including artificial intelligence, with some losing manufacturing jobs while others are creating more service jobs and non-routine work. The effects of these shocks play out differently for people, places and firms depending on their local context. The report highlights the need for policies that support regions and help workers adapt to change.
- Labour Markets continue to be resilient, even as signs of weakening emerge
- Where people live has a big impact on their employment opportunities
- Real wages are still under pressure in many countries despite recent growth
Labour markets continue to be resilient, even as signs of weakening emerge
OECD labour markets have continued to show resilience over the past year, but there have been new signs of weakening with a slowdown in the growth in employment and labour force participation. The average OECD unemployment rate remained relatively stable at 4.9% in May 2026, with around two thirds of OECD countries seeing a slight increase. The average employment and labour force participation rates in the OECD remained at or close to record levels, reaching 72.1% and 76.7% respectively in Q1 2026.
Young university graduates are also at an increasingly high risk of unemployment compared to other workers, a rising trend that began well before the spread of generative AI models, suggesting more complex root causes.
Where people live has a big impact on their employment opportunities
Where people live shapes their job opportunities, career progression and living standards. Large regional differences within countries carry real economic costs, as underperforming regions fail to reach their potential. They also threaten social cohesion when people feel, and often are, falling behind those in more prosperous areas.
In over half of OECD countries, employment rates across small regions vary by more than 20 percentage points. Crucially, differences in local population characteristics explain only half of this gap at most, with the rest reflected by what places themselves have to offer. The same worker, with the same qualifications, faces a very different labour market depending on where they live.
Trade shocks also hit people, places and firms very differently depending on the types of businesses and industries in each area. Workers who lose manufacturing jobs rarely move into the new roles created in services, with these jobs often going to younger people entering the workforce.
