IRELAND will experience the fastest jobs growth in Europe and one of the fastest in the world over the next two years, according to the latest Employment Out look from the OECD. Irish employment is expected to grow by 2.3 per cent this year and 2.1 per cent next year from 3 per cent in 1995, the survey says.

This compares to a projected fall of 0.1 per cent across central and western Europe this year and growth of 0.5 per cent in 1997.

Mexico is the only OECD country with a higher projected level of jobs growth, at 2 per cent this year and 2.5 per cent in 1997.

Overall, the high level of unemployment in the world's main industrialised countries will show little improvement over the next two years, according to the Paris based organisation.

It also warns that widening earnings inequalities will lead to more marginalisation of people and increased pressure on social security budgets.

The OECD area unemployment rate in the first half of 1996 is estimated at 7.7 per cent, or 33.5 million people. Little improvement is expected over the next two years. Unemployment in Ireland is predicted to fall to 14 per cent this year and to 12.2 per cent in 1997. Last year, unemployment stood at 12.9 per cent.

Irish wage increases are expected to hit 3.5 per cent this year and 3.8 per cent next year. Wage rises last year averaged just 3 per cent, the report states. This compares to average wage rises in central and western Europe of 3.4 per cent this year, declining to 3.3 per cent next year.

The report also sets out to examine the best way to reform tax and benefit systems and to improve young people's ability to enter the world of work. In Ireland's case, the report points out that many workers face high marginal tax rates (METRs). This means many people have very little financial reward for increased work hours and effort, and lose very little if they work less.

Ireland has the highest marginal tax rate in the OECD area, despite Government efforts to target the problem in the last two budgets. Workers who earn between 62 and 76 per cent of average earnings face a METR of over 105 per cent. In Germany the rate is 89 per cent land Britain 80 per cent.

The report also focuses heavily on youth labour market problems. According to the OECD, policies need to focus on access to jobs and developing skills. The problem is that, although Ireland and other countries targeted these areas in recent years, it simply meant a recycling from joblessness to a brief spell on a programme and back again.