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Better Jobs for
Development
Labor Markets and Social Security Unit
The creation of
better jobs is the
engine of inclusive
and sustainable
growth.
Better = more productive and with
access to social insurance
Labor policy an essential part of an agenda for sustainable and
equitable growth
Better jobs for
Development
DevelopmentDevelopment
Regulations &
social. Ins. ALMP,
Skills
Other policies
Skills for the LF
Other policies
Regulations &
social ins., ALMP
Other policies
Allocative problems.
• If marginal value of a worker in job a <
marginal value of worker in job b, there
are efficiency gains that can be attained
by reallocating that worker from a to b.
• Social insurance and Labor regulations,
other regulations and poorly working credit
markets, among others, can lead lo
misallocation.
Social insurance (broad) potential source of
misallocation but can also facilitate reallocation
• Social security –if some jobs pay taxes and
others do not, it creates a difference in the
marginal value of labor  misallocation
• Labor regulations  may prevent reallocation
• But other mechanisms (UI) may facilitate
reallocation of workers to + productive jobs.
Labor policy an essential part of an agenda for sustainable and
equitable growth
Better jobs for
Development
DevelopmentDevelopment
ALMPs
Other policies
Skills for the LF
Other policies
Regulations &
Institutions, ALMP
Other policies
Employability Challenges
Better Jobs for
Development
• High youth unemployment & Ninis
• Low female participation
• Low job insertion of disabled
• Low employability of CCT recipients
But also:
• Weak, insufficient & often ineffective
active labor market policies
ALMPs
Other policies
More
employment
More
opportunities
Unemployment Rate, youth vs. adults
Source :BID based on Household surveys of each country
14.5%
Percentage of youth population that neither study, work, or search for
work (Ninini) or is unemployed
Note: the percentage of youth that neither study or work (ninis) is the sum of the
Nininis and the Unemployed
Source: BID based on household surveys in each country.
22.7%
Labor productivity Challenges
Better Jobs for
Development
• Poor education systems have lead to
an unprepared labor force.
But also:
• Supply driven VET systems
• Low investments in on-the-job-
training
• Lack of effective public-private
alliances to promote relevant skills
Skills
More
productivity
Higher
income
Recruiting skills: a challenge for employers in LAC
Source: Talent Shortage Survey (2013). The Manpower Group.
Most LAC countries are above average
% of firms that have difficulties filling jobs
Allocation Challenges
Better Jobs for
Development
• Large informal, uncovered sector
•139 millions (56,8% employment)
•Particularly among the poor and the
emerging middle classes
But also:
• Design of labor and social security
laws inadequate to realities of
region.
• Disincentives to better jobs creation
Regulations &
Institutions
Better
allocation of
resources
More
protection
Potential Misallocation between independent
and salaried work & lack of Soc. Sec. coverage
Aportantes/afiliados por decil de ingresos.
Ocupados
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
D1 D2 D3 D4 D5 D6 D7 D8 D9 D10
Porcentajedecontribuyentes/afliliados
Asalariados_Brasil Independientes_Brasil
Asalariados_ALC-19 Independientes_ALC-19
% workers affiliated to Social Security by income decile
Dealing with employability challenges
• Strengthening the linkages between school and work, as
well as the information and orientation for youth.
• Transformation and strengthening of the National
Employment Services.
– With emphasis on working with firms to identify vacancies, assessing
workers’ employability barriers, and linkages to labor insertion
initiatives
• Better labor insertion initiatives:
– Based on a better assessment of barriers to employability, strong
involvement of productive sector, strong quality assurance
mechanisms, and rigorous evaluations to asses impact.
Dealing with labor productivity challenges
•Improving the reach, the quality and the relevance of
training systems.
– Development of PPP to foster training in firms, development of
qualification frameworks so acquired skills are portable; accreditation
of previously learned skills, M&E systems.
•Developing schemes to foster training of workers and
managers of SMEs
– As part of an strategy for productivity growth at the firm level, which
may involve linking firms to supply chains, or other firms.
Better Jobs for
Development
Dealing with allocative challenges
• Comprehensive reforms to labor regulations and social
insurance mechanisms which are conducive to better
protection schemes and at the same time, to better
resource allocation and more job creation.
– Improving the reach, the sustainability and the institutionality of
pensions systems
– Improving the reach, and the effective protection against the risk of
unemployment, and the link between active and passive labor policies.
– Improving the financing of health systems so they rely less on the type
of work and more on general revenues.
• .
In summary
• A well crafted labor policy is as essential part of
an agenda for sustainable and equitable growth.
• There is an urgent need to strengthen labor
institutions, so they can:
– Promote good labor policy design
– Have higher executing capabilities
– Promote a robust agenda of impact evaluations.
– Promote policy coherence
"Better Jobs for Development Labor Markets and Social Security Unit"

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"Better Jobs for Development Labor Markets and Social Security Unit"

  • 1. Better Jobs for Development Labor Markets and Social Security Unit
  • 2. The creation of better jobs is the engine of inclusive and sustainable growth. Better = more productive and with access to social insurance
  • 3. Labor policy an essential part of an agenda for sustainable and equitable growth Better jobs for Development DevelopmentDevelopment Regulations & social. Ins. ALMP, Skills Other policies Skills for the LF Other policies Regulations & social ins., ALMP Other policies
  • 4. Allocative problems. • If marginal value of a worker in job a < marginal value of worker in job b, there are efficiency gains that can be attained by reallocating that worker from a to b. • Social insurance and Labor regulations, other regulations and poorly working credit markets, among others, can lead lo misallocation.
  • 5. Social insurance (broad) potential source of misallocation but can also facilitate reallocation • Social security –if some jobs pay taxes and others do not, it creates a difference in the marginal value of labor  misallocation • Labor regulations  may prevent reallocation • But other mechanisms (UI) may facilitate reallocation of workers to + productive jobs.
  • 6. Labor policy an essential part of an agenda for sustainable and equitable growth Better jobs for Development DevelopmentDevelopment ALMPs Other policies Skills for the LF Other policies Regulations & Institutions, ALMP Other policies
  • 7. Employability Challenges Better Jobs for Development • High youth unemployment & Ninis • Low female participation • Low job insertion of disabled • Low employability of CCT recipients But also: • Weak, insufficient & often ineffective active labor market policies ALMPs Other policies More employment More opportunities
  • 8. Unemployment Rate, youth vs. adults Source :BID based on Household surveys of each country 14.5%
  • 9. Percentage of youth population that neither study, work, or search for work (Ninini) or is unemployed Note: the percentage of youth that neither study or work (ninis) is the sum of the Nininis and the Unemployed Source: BID based on household surveys in each country. 22.7%
  • 10. Labor productivity Challenges Better Jobs for Development • Poor education systems have lead to an unprepared labor force. But also: • Supply driven VET systems • Low investments in on-the-job- training • Lack of effective public-private alliances to promote relevant skills Skills More productivity Higher income
  • 11. Recruiting skills: a challenge for employers in LAC Source: Talent Shortage Survey (2013). The Manpower Group. Most LAC countries are above average % of firms that have difficulties filling jobs
  • 12. Allocation Challenges Better Jobs for Development • Large informal, uncovered sector •139 millions (56,8% employment) •Particularly among the poor and the emerging middle classes But also: • Design of labor and social security laws inadequate to realities of region. • Disincentives to better jobs creation Regulations & Institutions Better allocation of resources More protection
  • 13. Potential Misallocation between independent and salaried work & lack of Soc. Sec. coverage Aportantes/afiliados por decil de ingresos. Ocupados 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% D1 D2 D3 D4 D5 D6 D7 D8 D9 D10 Porcentajedecontribuyentes/afliliados Asalariados_Brasil Independientes_Brasil Asalariados_ALC-19 Independientes_ALC-19 % workers affiliated to Social Security by income decile
  • 14. Dealing with employability challenges • Strengthening the linkages between school and work, as well as the information and orientation for youth. • Transformation and strengthening of the National Employment Services. – With emphasis on working with firms to identify vacancies, assessing workers’ employability barriers, and linkages to labor insertion initiatives • Better labor insertion initiatives: – Based on a better assessment of barriers to employability, strong involvement of productive sector, strong quality assurance mechanisms, and rigorous evaluations to asses impact.
  • 15. Dealing with labor productivity challenges •Improving the reach, the quality and the relevance of training systems. – Development of PPP to foster training in firms, development of qualification frameworks so acquired skills are portable; accreditation of previously learned skills, M&E systems. •Developing schemes to foster training of workers and managers of SMEs – As part of an strategy for productivity growth at the firm level, which may involve linking firms to supply chains, or other firms. Better Jobs for Development
  • 16. Dealing with allocative challenges • Comprehensive reforms to labor regulations and social insurance mechanisms which are conducive to better protection schemes and at the same time, to better resource allocation and more job creation. – Improving the reach, the sustainability and the institutionality of pensions systems – Improving the reach, and the effective protection against the risk of unemployment, and the link between active and passive labor policies. – Improving the financing of health systems so they rely less on the type of work and more on general revenues. • .
  • 17. In summary • A well crafted labor policy is as essential part of an agenda for sustainable and equitable growth. • There is an urgent need to strengthen labor institutions, so they can: – Promote good labor policy design – Have higher executing capabilities – Promote a robust agenda of impact evaluations. – Promote policy coherence