This paper analyzes the incentives to labor supply faced by families, particularly mothers, with young children in the context of a recently introduced fertility promotion benefit in Poland. The ...paper is based on an adapted version of the Organisation for Economic Co-operation and Development's Tax-Benefit Model, which estimates households'net earnings after taxes and social transfers at different levels of wages. Since the recent introduction of the 500 benefit, some households face steep marginal tax rates due to the benefit withdrawal rules. Single parents with two children, and second earners with one child can expect their income to increase by only 30 and 25 percent of the minimum wage, respectively, if they take up a job at minimum wage. If they must also pay for childcare, having all adults working can cause losses of up to 30 percent compared with if one adult stayed home. Although the 500 program radically contributed to reducing child poverty, in the absence of complementary reforms, these disincentives could affect more than half a million households, disproportionately in the lowest quintile. Vouchers for private childcare have been adopted by some municipalities in Poland to counter unmet demand for public nurseries. A 75 percent subsidy of typical childcare costs would restore the financial viability of low-paying work for mothers with young children. Alternative remedies include a reform of the eligibility and withdrawal rules of the 500 program.
In mid-2020, the Government of Colombia launched a labor reform consultation process (Misión de Empleo) in response to a deterioration in pre-Covid19 employment indicators and changing economic and ...labor market conditions. Based on a comprehensive review of Colombia’s labor market performance for the 2009-2019 period, this report seeks to provide analytical underpinnings to this process. At the macro level, the report shows that employment in Colombia is insufficiently diversified relying almost exclusively on job creation in the services sectors. This exposes the labor market to cyclical changes in internal demand that are typical for commodity rich economies like Colombia. At the worker level, the report shows that the economy generates too few formal employment opportunities for those with fewer skills and those living in rural areas, implying low earnings, high rates of self-employment, and high levels of informality. At the firm level, the reports shows that the labor regulatory regime has contributed to strong increases in labor costs with important effects on entry and exit dynamics of firms contributing to a compositional shift towards larger, more capitalized, and more skill-intensive firms.
This paper takes stock of methods to profile the unemployed in public employment services (PESs) in OECD countries, in order to single out suitable approaches for PES in emerging economies. Profiling ...should enable PESs to segment jobseekers into groups with similar risk of work-resumption, and in turn to determine their level of access to different levels of treatment. In our framework PESs rely to a varying extent on (i) case worker discretion and on (ii) data-intensive approaches. On one hand of the spectrum, PESs may allocate interventions on a first-come-first-serve basis according to broad eligibility criteria (age, unemployment duration). This is likely to either induce deadweight loss or to delay treatment. Most often case managers judgment, steered by qualitative guidelines, also plays a role. In this case outcomes depend strongly on the available time and capacity of case managers. An alternative approach is to exploit data about jobseekers to determine the probability of work-resumption according to a statistical model, which then allows the identification of customers most likely to need active labor market interventions. We argue that for PES in emerging economies that show limited case management experience and high customer load, statistical profiling could be a suitable tool to maximize the impact of their scarce resources.
Since the peak of the economic crisis, poverty reduction in Armenia has made limited progress, withpoverty rates moving from 34.1 percent in 2009 to 32 percent in 2013. This slow pace has been ...mirroredby the limited progress of the labor market (LM), particularly in terms of job-creation. In 2013, about 36percent of people worked in the agricultural sector, and about half of all workers earned wages throughinformal jobs.These conditions highlight the need to have a robust social protection (SP) system that not only offersadequate protection to people living in poverty but can also serve as a tool to increase the quality ofhuman capital, which in turn can help improve their economic opportunities. The government ofArmenia (GoA) has shown a clear interest in building its infrastructure to deliver SP services throughintegrated social service centers as a means to better harness its investment in SP. Its vision is toultimately implement an integrated social policy that personalizes interventions and tries to addressmultiple constraints that people face when trying to escape poverty— not only through the provision ofcash benefits.The objective of this policy note is twofold. First, it provides a diagnostic of the SP system in order toidentify the key issues that could be addressed to enhance its effectiveness and efficiency to achievegreater poverty reduction. Second, the note outlines a set of options—policies and reforms—for theGoA to consider as it continues to strengthen its poverty-reduction strategy. It is important to note thatthe focus of the report is on social assistance (SA) and LM policies for vulnerable groups. Other keyaspects of SP—such as pensions, labor regulations, or the functioning of the LM as a whole—are notaddressed in this report, and they have been the subject of extensive analysis elsewhere.
