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Building inclusive labour markets in kazakhstan

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Building inclusive labour markets in kazakhstan

  1. 1. Building Inclusive Labour Markets in Kazakhstan A Focus on Youth, Older Workers, and People with Disabilities Stefano Scarpetta, Director for Employment, Labour, and Social Affairs Astana, July 13th 2017
  2. 2. 1. The Key Labour Market Challenges 2. Investing in Kazakhstani Youth 3. Working longer with age: Strengthening the Labour Market Outcomes of Older Workers 4. Breaking Down Labour Market Barriers for People with Disabilities Outline of the presentation 2
  3. 3. 1. THE KEY LABOUR MARKET CHALLENGES 3
  4. 4. Kazakhstan is doing well with regards to job quantity 0 10 20 30 40 50 60 70 80 Italy Turkey Greece Belgium France Poland Slovenia Portugal Czech… Spain Japan Slovak… Mexico Chile Hungary OECD… Luxembourg Latvia Ireland Germany Austria Denmark Korea UnitedStates United… Israel Netherlands Australia Canada Finland Switzerland NewZealand Estonia Norway Sweden Iceland India SouthAfrica Brazil Indonesia Russian… China Tajikistan Uzbekistan Pakistan Afghanistan Kyrgyzstan Azerbaijan Kazakhstan Inactivity rate 0 10 20 30 40 50 60 70 80 90 Iceland Norway Sweden Switzerland Estonia NewZealand Canada Australia Israel Korea Netherlands Finland UnitedKingdom UnitedStates Denmark Japan Germany Austria Mexico CzechRepublic Luxembourg Chile OECDcountries Hungary Ireland Latvia SlovakRepublic Slovenia Poland Portugal France Belgium Spain Turkey Italy Greece China RussianFederation Indonesia Brazil India SouthAfrica Kazakhstan Azerbaijan Kyrgyzstan Afghanistan Pakistan Uzbekistan Tajikistan Employment rate BRIICSOECD Central Asia 4 Source: OECD calculations based on the labour force survey; OECD stat database; ILO database.
  5. 5. But informality and self-employment are hampering job quality 0 10 20 30 40 50 60 70 80 90 100 India Indonesia Mexico Colombia Turkey SouthAfrica Argentina CostaRica Brazil Kazakhstan UrbanChina Chile Russia Share of workers who are informal or self- employed Informal Self-employed % What does informality and self-employment entail? … No protection by labour contracts … Little training or career advancement … Poor social security protection ... Lower wages 0 5 10 15 20 25 Less than 20 20 to 40 40 to 60 60 to 80 80 to 100 100 to 150 Over 150 % Share of employees by income (in thousand KZT) Self-employed and informal employees Formal employees 20% of self-employed and informal employees earn less than the Minimum Wage 5Source: OECD calculations based on the labour force survey; OECD (2016), Employment Outlook; OECD (2016), Multi-Dimensional Review of Kazakhstan.
  6. 6. Some groups are lagging behind: #1 disadvantaged youth 0 2 4 6 8 10 12 14 Men Women Primaryorbelow Secondary Tertiary Akmola Aktobe Almaty Almatycity Astanacity Atyrau EastKazakhstan Karaganda Kostanay Kyzylorda Mangystau NorthKazakhstan Pavlodar SouthKazakhstan WestKazakhstan Jambyl Gender Education Region Youth NEET rates by socio-demographic characteristics Percentage of youth (ages 15-29) 6Source: OECD calculations based on the Labour Force Survey
  7. 7. Activity status of older people Some groups are lagging behind: #2 older workers 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 50 55 60 65 70 Men Inactive & not in education Unemployed Informal Self-employed Employed Education or training 50 55 60 65 70 Women Inactive & not in education Unemployed Informal Self-employed Employed Education or training Retirementage=58 Retirementage=63 7 Source: OECD calculations based on the Labour Force Survey
  8. 8. Some groups are lagging behind: #3 people with disabilities 0 10 20 30 40 50 60 70 Sweden Germany Denmark Luxembourg Finland France Netherlands Austria Slovakia Slovenia Estonia OECD-EU UnitedKingdom Italy Portugal CzechRepublic Belgium Poland Spain Hungary Greece Kazakhstan % Employment rate of people with disabilities Source: Agency of Statistics of the RK; Eurostat. 8
  9. 9. 2. INVESTING IN KAZAKHSTANI YOUTH 9
  10. 10. 10 Youth: Key recommendations Strengthening the role of Public Employment Services Investing further in Active Labour Market Policies Providing more adequate income support Investing in the skills of youth Reshaping family policies
  11. 11. Strengthening the role of the Public Employment Service 67% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Belgium Finland France Spain Portugal Slovenia Denmark Germany Poland OECD-Europe Iceland Luxembourg Sweden Hungary Greece Switzerland Austria Italy Estonia Netherlands UnitedKingdom Kazakhstan Registration with PES Percentage of youth unemployed Source: OECD calculations based on the information received by the Ministry of Healthcare and Social Development of RK. Poor targeting: 70% have VET or university Why is registration low ? Many jobseekers doubt PES can help Low generosity of benefits Registration does not entail access to certain benefits Vacancy bank has few and low-quality job openings
  12. 12. Investing further in Active Labour Market Policies 0.27 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 Denmark Sweden Finland Ireland Hungary France Luxembourg Austria Netherlands Spain Belgium Portugal Switzerland Norway Poland Germany Italy Slovenia Korea Kazakhstan Greece CzechRepublic NewZealand SlovackRepublic Israel Canada Estonia Japan UnitedStates Australia Chile UnitedKingdom Mexico OECD average = 0.4 Expenditures on ALMPs (% of GDP) What additional challenges ? Impact evaluation studies are lacking Weak targeting to people most in need Funding skewed towards poorest regions 4.3 0 5 10 15 20 25 30 35 40 Hungary France Italy Portugal Spain Belgium Austria OECD-Europe Luxembourg Germany Ireland Slovakia Finland Sweden Kazakhstan Denmark Poland Slovenia Greece Norway Netherlands Estonia <25 Total % Participation in ALMPs (% of labour force) Source: OECD calculations based on the information received by the Ministry of Healthcare and Social Development of RK; OECD stat. OECD average = 9.8
  13. 13. Providing more adequate income support 64 % 10.5 months 31% 6 months 0 5 10 15 20 25 30 35 40 0 20 40 60 80 100 Belgium Israel Slovenia Denmark Luxem… Spain Iceland Nether… Portugal Switze… Italy Japan France Hungary Norway Czech… Canada OECD Sweden Slovak… United… Finland Germany Chile Austria Korea Estonia Turkey Ireland Poland Greece New… Kazak… Australia United… Months Percentage of previous net earnings Net replacement rate (NRR) Maximum benefit duration (right-side scale) Unemployment Benefits Other income support ? Severance pay (only 1 monthly wage) Unemployment assistance (inexistent) Source: OECD calculations based on the information received by the Ministry of Healthcare and Social Development of RK; OECD Tax and Benefit database. 8 % 0 10 20 30 40 50 Netherlands Iceland Ireland Luxembourg Denmark Belgium Japan Spain Austria NewZealand Australia France Israel Slovenia Portugal Germany Finland Switzerland Canada Korea United… Poland Norway Sweden Czech… Slovak… Hungary Estonia Latvia Kazakhstan UnitedStates Chile % OECD average = 25.9 % Social Assistance Benefits Net income value in % of median incomes Ineffective take-up: poorest regions have the lowest coverage Rush it to poorly- matched, subsistence- level jobs? Coverage: 2 % of unemployed youth
  14. 14. Investing in the skills of youth Key labour market indicators for youth (15-28) by level of education 0 1 2 3 4 5 6 7 8 0 10 20 30 40 50 60 70 80 90 100 Labour force participation rate Employment-to-population ratio Unemployment rate (right-side scale) Basic secondary education General secondary education Secondary vocational education Higher education Source: ILO (2015), Jobs and Skills for Youth: Review of Policies for Youth Employment of Kazakhstan, International Labour Organization.
  15. 15. Reshaping family policies Encouraging fathers to take child-related leave o There is no leave for exclusive use of fathers o No financial incentives for fathers to take parental leave (women earn 68% of men’s wages) Facilitating access to good-quality childcare o Only 8.5% of children 0-2 enrol in childcare (OECD 33%) o Regional and wealth disparities: long waiting lists; private care 2/3 times as expensive Strengthening the income support available to parents o Family cash benefits are inadequate (low generosity; not adjusted by n. children; no benefits for sole parents) o Red tape (many families who are entitled do not apply)
  16. 16. 3. WORKING LONGER WITH AGE: STRENGTHENING THE LABOUR MARKET OUTCOMES OF OLDER WORKERS 16
  17. 17. 17 Older Workers: Key Recommendations Strengthening the employability of older workers Making work rewarding for older workers older workers Encouraging employers to hire and retain older workers
  18. 18. Ensure that lifelong learning policies encourage continuous upgrading of skills over the working life 18 Strengthening the employability of older workers 0 10 20 30 40 50 60 70 80 90 EastAsia&Pacific OECD LatinAmerica&Caribbean HighincomenonOECD AllCountries EasternEurope&Central… Sub-SaharanAfrica SouthAsia MiddleEast&NorthAfrica China(2012) RussianFederation(2012) Brazil(2009) SouthAfrica(2007) India(2014) Kazakhstan(2013) Indonesia(2009) Ireland(2005) Sweden(2014) Chile(2010) CzechRepublic(2013) Spain(2005) Mexico(2010) SlovakRepublic(2013) Slovenia(2013) Germany(2005) Estonia(2013) Poland(2013) Portugal(2005) Turkey(2013) Greece(2005) Israel(2013) Hungary(2013) Percent of firms offering formal training OECDBRIICS and Kazakhstan World region Source: World Bank Entreprise Survey.
  19. 19. (1) Ensure that adequate old-age pensions are provided to the elderly Making work rewarding for older workers (1) 63 44.9 0 20 40 60 80 100 120 IND(58) TUR(65) NLD(67) AUT(65) HUN(65) PRT(66) ESP(65) LUX(60) ARG(65) RUS(60) SVK(67) CHN(60) ITA(67) ISL(67) BRA(55) ISR(67) FRA(63) DNK(67) SAU(45) CZE(68) SWE(65) FIN(65) OECD34 BEL(65) NOR(67) EST(65) AUS(67) SVN(60) GRC(62) POL(67) DEU(65) CHE(65) KOR(65) KAZ(63) USA(67) NZL(65) CAN(67) IRL(68) JPN(65) GBR(68) CHL(65) MEX(65) IDN(55) ZAF(60) Net replacement rates at retirement age, projections 2057 19Note: data refer to people previously earning average wages. Source: OECD calculations based on the OECD Pension Models. Low life expectancy Underdeveloped financial services Informality Misinformation Coverage is low Why
  20. 20. (2) Enhance incentives to work beyond retirement age for those still able to work Making work rewarding for older workers (2) Only 13% of pensioners work, 50% of them do so informally. Why 1. Few possibilities to work part-time (after retirement, only 5% of dependent employees work part-time). 2. Partial or deferred withdrawal is not possible by law. 3. Kazakhstani Pension System provides weak financial incentives to work past retirement.
  21. 21. Continue efforts to better align wages to productivity and qualifications, rather than seniority Change employers’ perceptions of older workers and address discrimination in employment on the basis of age Continue efforts to ease employment protection legislation around older workers, but combine them with adequate income support and activation measures Encouraging employers to hire and retain older workers 21
  22. 22. 4. BREAKING DOWN LABOUR MARKET BARRIERS FOR PEOPLE WITH DISABILITIES (PWD) 22
  23. 23. 23 People with Disabilities: Key Recommendations Averting old stereotypes and strengthening anti- discrimination law Supporting activation-oriented assessments of PWD Making more effective use of employment quotas
  24. 24. Averting old stereotypes and strengthening anti-discrimination law 24 Promote a “people first” language o Legislation on disability policy often uses the word “invalid”, rather than “person with disability” o Differentiations by categories of clients (such as, “the blind”; “the deaf”) still existent Ensure that decisions based on the ground of disability be taken following a concerted approach o Firm can discriminate on the ground of disability (when there is a need to protect (i) the health of the PWD (ii) and/or the safety of others). o Burden of the proof is on the employers.
  25. 25. Supporting activation-oriented assessments of People with Disabilities Assess work capacity, not disability: o IRP remains strongly focused on the medical diagnosis o 3/5 members of the Medical and Social Expert (MSE) committee are doctors – the other are clerical staff o Few PWD receive the social and vocational assessment Treat each claim for a disability benefit as a request for rehabilitation: o There is too little focus on the Individual Rehabilitation Plan (IRP) o Only ¼ of PWD have access to an IRP o 1/2 are not even aware of its existence Consider introducing some flexibility in the system of re-assessments at fixed time intervals: o Most PWD (95%) are confirmed as disabled after re-assessment o MSE Committees are understaffed o Evaluation procedures tend to be a “box ticking” exercise
  26. 26. Key challenge: Only 1/3 of quota jobs are filled by PWD Why? o Quota jobs used to keep existing workers with emerging health problems o Firms struggle to find PWD with the right qualifications o Burdensome adjustment costs (e.g. accommodation costs; lawsuits) Possible areas for improvements: o Fix quotas realistically in each geographic area/region o Give priority to people with most severe disability o Impose levies (rather than fines) Making more effective use of employment quotas 26
  27. 27. Contacts: stefano.scarpetta@oecd.org ; alessandro.goglio@oecd.org ; alessia.forti@oecd.org . Follow us on Twitter: Site Web: www.oecd.org/els Bulletin: www.oecd.org/els/newsletter Thank you! 27

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