Ireland has the highest levels of job creation in the industrialised world, according to a new report.

The Organisation for Economic Co-Operation and Development's (OECD) 1998 Employment Outlook also says that over the 1990s structural unemployment - or the underlying level of unemployment - has fallen in only six countries, Australia, Denmark, Ireland, the Netherlands, New Zealand, and Britain.

The OECD is forecasting an increase of around 49,000 in total employment here this year - a rise of 3.6 per cent - and a similar increase in 1999. This compares with an ESRI forecast of a 53,000 employment rise this year - or 3.9 per cent growth - and almost 41,000 next year or 2.9 per cent growth.

The strong rate of growth in employment means that this year we will be below both the OECD Europe average and the EU average unemployment rates for the first time. However, at 9.3 per cent we are expected to remain above the predicted OECD average of 7.1 per cent this year.

By 1999 the gap is expected to have narrowed to one percentage point, with 8.2 per cent unemployed here and 7 per cent on average across the OECD. Overall unemployment in the 29 industrialised countries is expected to fall very slowly, as growth averages around 2 per cent.

The organisation also highlights the difference between individual and household unemployment. Belgium and Finland, for example, have the highest rates of jobless households. And Ireland is one of the only countries where the number of households without an adult employed did not increase. In most other countries, the numbers of households with no-one working has increased, widening the gap in income distribution and putting more children into poverty.

The OECD also points out that labour forces throughout the industrialised world will age over the next few decades, particularly as pension and social security policies are likely to be reformed to encourage later retirement. Rising educational levels and improved health among older workers will also underline the ageing of the workforce.

At the same time, older workers who lose their jobs will find it difficult to get back into work and if they do may suffer a large fall in earnings. On average, across the OECD, 45 per cent of older unemployed workers have been unemployed for one year or more.

The organisation also warns that the trend to shorter working hours has been running out of steam while Sweden, the UK and the US are now experiencing longer hours. Across the area, policy initiatives to encourage more part-time working are also lacking, the report states.

Shorter hours may lead to some overall job creation and to some job losses being avoided or delayed, but there is no reason to believe the number of extra jobs will be large, the report says.

The organisation also points to both benefits and costs or minimum wages. It warns that they do not reduce overall family poverty as many families have no-one in work but they are not a "general scourge" on jobs either.