IMF Staff Country Reports

This Selected Issues paper explores labor market shortages in The Netherlands. The Dutch economy has long benefited from substantial openness to achieve high living standards and provide employment opportunities. However, the labor market has become exceptionally tight recently, with cyclical and structural factors contributing to the tightness. Rapid population aging and an ambitious climate agenda call for more efficient use of resources and productivity growth to maintain economic growth. A comprehensive approach is needed to address labor shortages, promote a more inclusive, flexible, and efficient labor market, and support economic growth. Policymakers should target measures that help increase market flexibility, activate the unemployed, incentivize longer working hours of part-time employees, promote longer working lives, restore the balance between different types of employment, secure adequate social protection of all groups, ensure a smooth transition from one job to another, and encourage innovation and technology adoption.