After the introductory remarks from Arup Banerji (World Bank) and IZA Director Klaus F. Zimmermann, the conference discussed the role that activation policies and active labor market programs (ALMPs) can have in fostering a quick re-integration of the unemployed back to work and helping to improve the matching between labor demand and supply in advanced as well as emerging and developing countries. The keynote address by Torben M. Andersen (University of Aarhus and IZA) provided an overview of the main lessons from the implementation of activation strategies in OECD countries. Andersen then focused on the Danish experience, particularly on the role that active labor market policies play in the Danish flexicurity model – together with relatively lax employment protection but generous unemployment benefits.
A special session on the Turkish experience with active labor market policies was led by experts from the Turkish Employment Agency, the Ministry of Family and Social Policy and the Ministry of Development. The following session reviewed the experiences in developed and developing countries, with presentations from IZA Program Directors Stefano Scarpetta (OECD) and David Robalino (World Bank). The contributions emphasized the different objectives due to the different contexts for activation policies and ALMPs. In advanced countries, activation strategies have helped to mobilize the unemployed back to work and thereby contributed to reducing structural unemployment. However, the lessons from advanced countries is that activation strategies work well in good times when labor demand is strong, but need to be adapted when – as at present – labor demand is weak and job opportunities especially for disadvantaged jobseekers limited. In middle and low income countries the main issue is not necessarily to provide incentives for unemployed or other benefit recipients to quickly return to work. As many job losers in these countries cannot afford to be unemployed for long and the large majority of the unemployed does not receive unemployment benefits or assistance, the focus must be on helping workers to “graduate” to more productive jobs in the formal sector.
The subsequent session focused on the design and implementation of unemployment benefit schemes and other income support schemes and their impact on incentives for beneficiaries to return to work. This was followed by a session on how to engage jobseekers early in the unemployment spell and on how to link clients to services in the context of activation strategies. In his lunch keynote address, Jochen Kluve (Humboldt University, RWI and IZA) presented the highlights of a meta-analysis review of the evaluation of active labor market programs conducted with David Card (UC Berkeley and IZA) and Andrea Weber (University of Mannheim and IZA). While the analysis focuses on empirical studies for the OECD countries, Kluve also discussed the extent to which the OECD evidence is relevant for the design of active programs in developing countries and the emerging evaluation literature of these programs in developing and emerging economies. In particular, he pointed to the fact that the large majority of evaluations focus on youth training programs in the Latin American and Caribbean (LAC) countries and, on average, they tend to be effective in terms of employment probability and job quality.
The remaining sessions focused on the design of different programs including employment services, training, wage subsidies, and support to self-employment and small scale entrepreneurship among low skilled workers and beneficiaries of social assistance programs. There were also presentations on general implementation issues such as setting-up public/private partnerships, as well as on the results of recent evaluations of ALMPs, such as training for vulnerable youth in the Dominican Republic, support to adolescent girls in Liberia and Uganda, and entrepreneurship and self-employment support programs in Tunisia. Most of these evaluations are downloadable from the
online program of the conference.
The closing panel chaired by Arup Banerji included Klaus F. Zimmermann, Ana Revenga (World Bank), Seyffetin Gürsel (Bahcesehir University), Erhan Batur (Ministry of Labor and Social Security, Turkey), and Valentin Mocanu (Ministry of Labor, Family and Social Protection, Romania). The question posed to the panelists was whether developing countries should further invest in activation policies and ALMPs. There was a consensus that these policies and programs have a role to play in facilitating labor market transitions – from school-to-work, from inactivity to employment, out of unemployment, and between jobs. But the main challenge in these countries remains improving the productivity of the jobs that are already there.
