World Bank Employment Policy Primer
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The World Bank Employment Policy Primer aims to provide a comprehensive, up-to-date resource on labor market policy issues. These short notes are concise summaries of best practice on various topics.
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A Practicioner's Guide to Evaluating the Impacts of Labor Market Programs(World Bank, Washington, DC, 2009-12) Fitzsimons, Emla ; Vera-Hernandez, MarcosThis note provides an introduction to the impact evaluation of labor market programs, with particular reference to developing countries. Its focus is on the main issues that need to be considered when planning an impact evaluation, including the importance of rigorous design for an evaluation, and on the statistical techniques used to estimate program impacts. To help the exposition, a prototype of a training program is referred to intermittently throughout the note. This hypothetical training program, which authors call get-to-work, provides training to the unemployed to help them find work. The note describes some general issues that are important for any impact evaluation of employment programs, both in the design and analysis stages, regardless of the specific evaluation techniques used. It then describes the main evaluation techniques, including the data requirements and the main assumptions invoked by each.
The Impact of Non-Wage Benefits on Job Quality and Labor Market Outcomes in the Developing World : What Do We Know?(World Bank, Washington, DC, 2009-12) Helppie, Brooke ; Macis, MarioOne indicator of job quality in the developing world is the extent to which workers are covered by nonwage mandated benefits. Mandated benefits are a class of labor market regulation that requires employers to provide their workers with some form of non-wage pay or benefits. These benefits are typically fully financed by the employer or the employer-worker pair, and administered at the firm level. This note summarizes the existing knowledge and research on the effects of providing higher mandated benefits on labor market outcomes. In particular, the authors focus on the evidence available for developing economies. The authors discuss the potential advantages and drawbacks of providing mandated benefits (as implied by economic theory), summarize some of the existing empirical literature on the impact of mandated benefits. This note sets out to introduce some of the theory and existing literature about mandated benefits, and to draw attention to the need for more research about the impact of this type of policy.
Addressing the Employment Effects of the Financial Crisis : The Role of Wage Subsidies and Reduced Work Schedules(World Bank, Washington, DC, 2009-09) Robalino, David ; Banerji, ArupThis note briefly reviews the experiences with wage subsidies and reduced work schedules in promoting employment and avoiding the depreciation of accumulated skills and knowledge due to a temporary downturn. These policies have been adopted by many high income countries as well as some middle income countries. It is to early o comment on their impact; to date, they have not been rigorously evaluated in the context of the financial crisis. And any results will also be difficult to generalize, since much depends on local conditions and the structure of the labor market. Wage subsidies and reduced work schedules show some promise as measures that can help countries to increase the employment elasticity of growth during the recovery and avoid the depreciation of skills associated with unemployment or informal work. Wage subsidies and reduced work schedules mainly benefit formal sector workers, which represent less than 50 percent of the labor force in most middle and low income countries.
Minimum Wages in Developing Countries : Helping or Hurting Workers?(World Bank, Washington, DC, 2008-12) Terrell, Katherine ; Almeida, Rita K.This policy note reviews the literature on the effects of minimum wages on labor markets in developing countries. The authors begin by elucidating the challenges to ascertaining these effects, especially in developing economies where a large segment of the workforce is not covered by minimum wage legislation (uncovered sector). After summarizing the theoretical models and their predictions, the authors review the empirical evidence of the impact of minimum wage legislation on wages, employment, and unemployment in the covered and uncovered sectors of the labor market. The evidence strongly suggests that an increase in the minimum wage tends to have a positive wage effect and a small negative employment effect among workers covered by minimum wage legislation and that the effects tend to be stronger among low-wage workers. The findings are quite limited and fairly inconclusive on the indirect effects of increases in minimum wages on workers in the uncovered sectors, where the legislation either does not apply or is not complied with.