Presentation on our project which aims to enhance the understanding of the value of ALMPs and other labour market policies with an activation component in Latin America.

1. Effectiveness of activation programmes on job quality
Trends in Latin America and Evidence for Argentina
Steven Tobin and Elva L´opez Mourelo
ILO Research Department
October 14, 2015
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2. The project
Purpose
To enhance the understanding of the value of ALMPs and other labour
market policies with an activation component in Latin America
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3. Justification
ALMPs have been increasingly implemented in Latin America (mainly
to balance active and passive support)
But, not enough research exists to unveil the effects of these policies
–Galasso et. al. (2001); Medina and Nuez (2001); Calderon-Madrid
and Trejo (2001); Aedo and Nuez (2001)
Knowledge from advanced countries is not necessarily extrapolated
–high incidence of informality
–limited fiscal space
–inadequate administrative and institutional capacity to implement
policies effectively
Less is known regarding the success of ALMPs in ensuring quality
employment.
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4. Objectives
Understanding better the effects of activation measures in
Latin America
–Compiling information of what exists already
–Understand the role of these policies in the region
–Shed light on the effects of policies
Disseminate the results to try to strengthen the impact
–Ensure the research responds to the needs of the region (ILO
country offices)
–Enhance the pertinence of results (consultation with policy makers)
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5. Outputs of the project
Online policy compendium
4 impact evaluations
–Effectiveness of active labour market tools in Conditional Cash
Transfers programmes: Evidence for Argentina
–A Quasi-Experimental Evaluation of the Public Employment Service
in Colombia
–Workfare programmes and their impact on the labour market:
Effectiveness of ”Construyendo Per´u”
–”Trabajo por Uruguay” and its effects of work quality
A meta-analysis of ALMPs in Latin America
(by: J. Kluve)
Final report
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6. Effectiveness of labour instruments in CCTs
Evidence for Argentina
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7. Motivation
Activation measures have been increasingly included in the
CCTs operating in the region
–Directly: provided by the CCT programmes themselves
–Indirectly: Facilitating the access to other programmes that include
activation components (e.g. Argentina)
Cash transfers alone are not enough to reduce poverty in a
sustainable manner
–Tools to more autonomous income generation opportunities
–Link non-contributory and contributory programmes
Key question: How successful activation measures in CCTs are?
–Empirical evidence is very scarce (Galasso et al., 2004; Almeida and
Galasso, 2010)
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8. Objective
Effectiveness of active labour market tools
–Asesses whether they are effective as an exit strategy from CCTs
Impact on job quality
–Not only on employability, but also on work quality of participants
First attempt at the country level
–Previous studies only in some specific geographic areas
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9. Background
2002: Plan Jefes was implemented
–Context: Unemployment rate at 21.5% (+6pp) and poverty rate at
57% (+37pp)
–Benefits: 150 pesos to unemployed head of households with children
under the age of 18 or disabled
–Conditionality: Firstly, only on basic health care and school
attendance of children; Then, requirement of 20 hours per week in
community works
–2 million of beneficiaries at its peak in May 2003
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10. Background
2006: Two new programmes for a new country
–Annual growth rate of 9% and unemployment rate at 11.3%
–Jefes participants were transferred to two new programmes
according to their characteristics:
Plan Familias:
Focused on Jefes participants with serious difficulties of employability
Female head of household with 2 or more children under the age of 18 and
not having completed secondary education
More traditional CCT
SCE:
Focused on Jefes participants with higher probabilities of employability
Those with less family responsibilities and more educated
Income support conditional to activation
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11. Background
2006-2010: Transition from Jefes to Plan Familias or SCE
–Gradually process
–2006-2010: There are participants in the 3 programmes
–2010: Plan Jefes is eliminated
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12. Training and Employment Insurance programme (SCE)
Context: Implemented in 2006 as an exit strategy from Plan Jefes
Eligibility criteria: Plan Jefes participants are directly eligible
Period: For a maximum of 2 years
Monthly allowance: 225 pesos the first 18 months; 200 pesos the
last 6 months
Commitment:
–attending regularly the PES office to develop a career plan;
–participating in training, apprenticeship or vocational orientation
activities;
–accepting job offers that correspond to their profile
Beneficiaries that get a job may continue to receive the benefit:
–Public sector: up to 12 months
–Private sector: up to 6 months
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13. Components of SCE
Directly:
(I) Completion of primary and secondary education
(II) Vocational training and apprenticeships
(III) Labour intermediation services
Indirectly:
(I) Indirect job creation
(II) Promotion of self-employment and microbusiness
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14. Data
Permanent Household Survey
Quarterly data since 2003Q3
31 large urban areas
24,000 dwellings per quarter
2-2-2 system
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15. Sample selection
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16. Sample selection
Individuals aged 19-65
2006Q2-2010Q4
Individuals who were re-interviewed one year later
Final sample
582 participants
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17. Descriptive statistics
EPH Administrative
sample data
Gender
Men 30% 30%
Women 70% 70%
Age
Aged 26-35 33% 33%
Aged 19-45 69% 66%
Aged 46 and older 31% 34%
Educational attainment
Secondary non completed or lower 71% 75%
Secondary completed or higher 29% 25%
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18. Empirical strategy
Objective: Average impact of the treatment on the treated (ATT)
Control group:
–Similar characteristics than SCE participants but have not been
beneficiaries of activation measures
–Plan Jefes that have not been yet transferred to SCE (1,120
non-participants)
Selection bias:
–DD estimator to control for time-invariant individual characteristics
–Common trend assumption
–Matching methods to balance the groups
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19. DD estimator
Regression equation
yit = αTi t + βxit + ρTi + γt + it
Dependent variables:
–Labour market status: i) Informality; ii) Unemployment; iii) Inactivity
–Job quality: i) Hourly wages; ii) Low-paid job; iii) Hours worked; iv)
Excessive working hours; v) Underemployment
Covariates:
–Time variant personal characteristics (age, marital status, role in the
household, school attendance, educational attainment)
–Household characteristics (type of family, number of children, labour
market status for other members in the household)
–Fixed and time effects
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20. Impact of the programme on labour market status
Full sample Matched sample
Informal worker -0.02 -0.06
(0.003)*** (0.013)**
Unemployed 0.002 0.012
(0.001) (0.000)
Inactive 0.03 0.07
(0.009)* (0.019)**
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21. Impact of the programme on job quality
Full sample Matched sample
Ln(hourly wages) 0.04 0.03
(0.005)*** (0.009)**
Low-paid job -0.02 -0.03
(0.013) (0.033)
Hours worked 0.64 -1.55
(0.226)* (0.079)***
Excessive working time -0.02 -0.05
(0.004)** (0.009)**
Underemployment -0.03 -0.02
(0.001)*** (0.001)***
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22. Looking forward
Next steps
Explore the reasons behind the increase in inactivity
Heterogeneous responses
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23. Thank you!
tobin@ilo.org
lopezmourelo@ilo.org
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