Sociodemographic, economic, technological and environmental changes will affect both the need for, and the financing of, social protection systems in OECD countries over the coming decades. To provide adequate and sustainable support, the shape, size and funding of social programmes will need to anticipate and adapt to these “megatrends”.
Current economic challenges – including labour shortages and the cost-of-living crisis – brought forward the repercussions of megatrends that had been expected in the medium term. Labour shortages are starting to curtail economic activity and public service provision even before the full effect of demographic change has set in. Similarly, planned climate change mitigation policies will result in higher energy prices in the coming years. However, the sudden and dramatic spike in energy prices in many OECD countries following Russia’s war of aggression against Ukraine demonstrated how keenly energy price rises are felt by households and firms. Once again, governments mobilised significant resources to cushion the impacts, but going forward, targeting is key, given limited fiscal space coming out of the COVID‑19 pandemic and higher interest rates that constrain public borrowing.
This report – Megatrends and the Future of Social Protection – forms part of the OECD’s Future of Social Protection programme of work, overseen by the OECD Employment, Labour and Social Affairs Committee. It presents a broad stocktaking of key megatrends impacting the future of social protection in OECD countries – ageing populations, changing patterns of labour supply, new and emerging employment forms, changes in household composition and unpaid work, the effects of new technologies on employment and wages, as well as the effects of climate change and the net zero transition – with an eye towards informing future reforms.
The report was co‑ordinated by Raphaela Hyee and Valerie Frey in the OECD Directorate for Employment, Labour and Social Affairs under the supervision of Stefano Scarpetta (Director of Employment, Labour and Social Affairs), Mark Pearson (Deputy Director of Employment, Labour and Social Affairs) and Monika Queisser (Head of the OECD Social Policy Division). The authors are Raphaela Hyee (Chapters 1, 3, 4, 5 and 6), Valerie Frey (Chapters 1, 4 and 6), Jasmin Thomas (Chapters 3 and 4), Andrew Reilly (Chapter 2) and Marissa Plouin (Chapter 6).
The project was co-funded by Employment and Social Development Canada and the Belgian Federal Public Service Social Security. The OECD authors would like to thank Delegates to the OECD Working Party on Social Policy, as well as OECD colleagues Willem Adema, Ali Bargu, Hervé Boulhol, Wouter De Tavernier, Boglárka Dely, Maxime Ladaique, Maciej Lis, Ricarda Milstein, Ana Llena Nozal, Mark Pearson, Stefano Scarpetta, Monika Queisser and other Social Policy Division and Health Division colleagues, for their useful feedback. Marie‑Aurélie Elkurd and Hanna Varkki provided valuable publication support.