Should Governments Attempt to Reduce Non-Wage Labour Costs?

From the information presented in the first three chapters it is clear that, throughout most OECD countries, non-wage labour costs form a large and growing proportion of the average firm’s total expenditure on labour. Further, it is reasonable to infer from Table 3.2 that, in many of these countries, the real growth of the costs has outstripped real productivity growth. For two broad types of reason, there would appear to be strong arguments in support of government policies designed to reduce the costs, especially within an era marked by record postwar unemployment rates.