Vodopivec, Milan2013-12-192013-12-192006-02-14World Bank Research Observerdoi:10.1093/wbro/lkj003https://hdl.handle.net/10986/16396Mounting evidence suggests that excessive job protection reduces employment and labor market flows, hinders technological innovations, pushes workers into the informal sector, and hurts vulnerable groups by depriving them of job opportunities. Flexible labor markets stimulate job creation, investment, and growth, but they create job insecurity and displace some workers. How can the costs of such insecurity and displacements be minimized while ensuring that the labor market remains flexible? Each of the main unemployment income support systems (unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works) has strengths and weaknesses. Country-specific conditions, chief among them labor market and other institutions, the capacity to administer each type of system, and the size of the informal sector, determine which system is best suited to developing and transition countries.en-USCC BY-NC-ND 3.0 IGOACCESS TO CREDITACCESS TO FUNDSACCESS TO JOBSACTIVE LABORACTIVE LABOR MARKETACTIVE LABOR MARKET PROGRAMSADMINISTRATIVE CAPACITYADMINISTRATIVE COSTSADVERSE EFFECTSADVERSE SELECTIONAFFORDABILITYAGGREGATE EMPLOYMENTAGGREGATE PRODUCTIVITYAGGREGATE PRODUCTIVITY GROWTHAVERAGE WAGEBENEFIT PAYMENTSBORROWINGBUSINESS PLANSCAPITAL MARKETCASH TRANSFERSCHILD ALLOWANCESCOLLATERALCOLLECTIVE AGREEMENTSCOLLECTIVE BARGAININGCOMMUNITY DEVELOPMENTCONSUMPTION EXPENDITURESCONSUMPTION SMOOTHINGCONTRIBUTORY SYSTEMCRISESDEBTDEPOSITDEPOSITSDISADVANTAGED GROUPSDISMISSALEARNINGSEARNINGS LOSSESECONOMIC COOPERATIONECONOMIC INSECURITYEDUCATIONAL ATTAINMENTELIGIBILITY CRITERIAEMPLOYABILITYEMPLOYEEEMPLOYEREMPLOYERSEMPLOYMENT GUARANTEEEMPLOYMENT GUARANTEE SCHEMEEMPLOYMENT GUARANTEE SCHEMESEMPLOYMENT OFFICESEMPLOYMENT OPPORTUNITIESEMPLOYMENT PROTECTION LEGISLATIONEMPLOYMENT RATESEMPLOYMENT RELATIONSHIPEMPLOYMENT SPELLEMPLOYMENT SUBSIDIESEMPLOYMENT SUBSIDYEMPLOYMENT SUBSIDY PROGRAMSEMPOWERMENTEQUILIBRIUM UNEMPLOYMENTEQUITABLE ACCESSEXCHANGE RATESEXPENDITUREEXTENDED FAMILIESFINANCIAL DIFFICULTIESFINANCIAL MARKETSFINANCIAL RESOURCESFIRING COSTSFIRM LEVELFLEXIBLE LABOR MARKETSFOOD SUBSIDIESFORMAL SECTOR WORKERSGROSS WAGESHEALTH INSURANCEHIGH · UNEMPLOYMENTHOUSEHOLD INCOMEHOUSEHOLD INCOMESHOUSEHOLDSHUMAN RESOURCEHUMAN RESOURCE DEVELOPMENTHUMAN RESOURCESINCENTIVE PROBLEMSINCOME DISTRIBUTIONINCOME GROUPINCOME INEQUALITIESINCOME REDISTRIBUTIONINCOME SUPPORTINCOME SUPPORT PROGRAMINCOME SUPPORT PROGRAMSINCOME SUPPORT SYSTEMINCOME SUPPORT SYSTEMSINFORMAL EMPLOYMENTINFORMAL SECTORINFORMAL SECTOR WORKERSINFORMATION ASYMMETRIESINFORMATION SYSTEMSINSTITUTIONAL CAPACITYINTERNATIONAL BANKJOB CREATIONJOB INSECURITYJOB OPPORTUNITIESJOB SEARCHJOB SEARCH ASSISTANCEJOB SECURITYJOB SEPARATIONJOB TENUREJOBSLABOR ECONOMICSLABOR FORCELABOR FORCE ATTACHMENTLABOR FORCE PARTICIPATIONLABOR MARKETLABOR MARKET CONDITIONSLABOR MARKET OUTCOMESLABOR MARKET PERFORMANCELABOR MARKET POLICIESLABOR MARKET PROGRAMSLABOR MARKET RIGIDITIESLABOR MARKETSLABOR MOBILITYLABOR POLICYLABOR REALLOCATIONLABOR REGULATIONLABOR SUPPLYLABOURLABOUR MARKETLABOUR MARKET PERFORMANCELAID-OFF WORKERSLAYOFFSLIMITED ACCESSMARKET FAILURESMEANS TESTINGMINIMUM WAGEMORAL HAZARDOLD AGEOLDER WORKERSPART-TIME EMPLOYMENTPER CAPITA CONSUMPTIONPOLITICAL ECONOMYPOLITICAL SUPPORTPOORPOVERTY REDUCTIONPRIVATE PROVIDERSPRIVATE SECTORPRIVATE SECTOR WORKERSPRIVATE TRANSFERSPRODUCTIVITY GAINSPUBLIC SPENDINGPUBLIC UNEMPLOYMENTPUBLIC WORKSPUBLIC WORKS PROGRAMPUBLIC WORKS PROGRAMSPUBLIC WORKS PROJECTSRECESSIONSREMITTANCESREPAYMENTRETIREMENTSAFETYSAFETY NETSAFETY NET PROGRAMSSAVINGSSAVINGS ACCOUNTSAVINGS ACCOUNTSSAVINGS MECHANISMSSELF-EMPLOYMENTSEVERANCE BENEFITSSEVERANCE PAYSEVERANCE PAY SYSTEMSEVERANCE PAY SYSTEMSSEVERANCE PAYMENTSEVERANCE PAYMENTSSOCIAL ASSISTANCESOCIAL EXCLUSIONSOCIAL FUNDSSOCIAL INSURANCE PROGRAMSSOCIAL SECURITYSUPPORT INFRASTRUCTURETARGETINGTECHNOLOGICAL INNOVATIONSTRAINING SERVICESTRANSFER BENEFITSUNEMPLOYEDUNEMPLOYED INDIVIDUALUNEMPLOYED WORKERSUNEMPLOYMENTUNEMPLOYMENT ASSISTANCEUNEMPLOYMENT BENEFITUNEMPLOYMENT BENEFIT SYSTEMUNEMPLOYMENT BENEFITSUNEMPLOYMENT COMPENSATIONUNEMPLOYMENT INSURANCEUNEMPLOYMENT INSURANCE FUNDSUNEMPLOYMENT INSURANCE PROGRAMSUNEMPLOYMENT INSURANCE SYSTEMUNEMPLOYMENT RATEUNEMPLOYMENT SPELLUNEMPLOYMENT SPELLSUNFUNDED LIABILITIESVULNERABLE GROUPSWAGE EMPLOYMENTWORKERWORKERSYOUNG WORKERSYOUTH UNEMPLOYMENTJournal ArticleWorld Bank10.1596/16396