This report consists of seven chapters and is divided into three parts. Part one focuses on the minimum wage policy, its historical evolution, and the current institutional context across ASEAN countries.
... See More + Part two delves into the socio?economic impacts of the minimum wage policy on workers, households, firms, the economy, and the ASEAN region. Part III links the findings from each country to the ASEAN regional context and brings all the analysis together into a policy and operational discussion. Specifically, part one of the report includes this chapter (chapter one) and chapter two. The rest of chapter one summarizes the findings from all chapters in the report and presents an overview of lessons detailed in the final chapter. To provide some background and context for the remainder of the report, chapter two briefly describes the history of minimum wage policy around the world and the theoretical principles behind wage setting and its effects. Part two consists of four chapters. Chapter three, which describes how the minimum wage policy is structured and managed in each ASEAN country, includes details on the objectives that countries have set out for the policy and how the policy is enforced in each country. Chapter four summarizes results from primary and secondary empirical research on the impacts of minimum wage changes on employment, wages, and informal work in the four focus ASEAN countries. The discussion in this chapter takes into account the existence of complementary worker protection programs in each country. Chapter five discusses empirical results on whether changes in the minimum wage policy affect poverty and inequality. Since each country has distinct poverty programs, the discussion takes into account the presence of various social programs that potentially complement income earned from wage labor. Chapter six focuses on how wage and labor costs affect firms, especially in terms of investment decisions and productivity. Due to the limited availability of evidence on the impact of minimum wages on firm performance and private sector activity in ASEAN countries, a large part of the discussion in this chapter includes evidence from non-ASEAN countries. Lastly, this chapter reviews the status of the main labor market institutions legislated in the region and provides some evidence on how other labor institutions might interact with the minimum wage policy to shape its effect. Part three comprises chapter seven, which reflects on the material presented in previous chapters and provides policy?oriented insights. It discusses the political economy of the minimum wage policy and draws out the implications of having such diverse wage policies and institutional arrangements for wage management in an increasingly interlinked regional bloc such as ASEAN. The chapter also synthesizes the lessons learned throughout the report and frames the main labor policy issues to provide guidance for, and elicit action from, policymakers going forward.
See Less -
Vote-buying is pervasive, but not everywhere. What explains significant variations across countries in the greater use of pre-electoral transfers to mobilize voters relative to the use of pre-electoral promises of post-electoral transfers?
... See More + This paper explicitly models the trade-offs that politicians incur when they decide between mobilizing support with vote-buying or promises of post-electoral benefits. Politicians rely more on vote-buying when they are less credible, target vote-buying to those who do not believe their political promises, and only buy votes from those who would have received post-electoral transfers in a world of full political credibility. The enforcement of a prohibition on vote-buying reduces the welfare of those targeted with vote-buying, but improves the welfare of all other groups in society.
See Less -
Policy Research Working Paper WPS6653 OCT 01, 2013
The national severance pay scheme, its regulation in the law and in other sources, its practice and practical application, and all the amendments of the statutory basis are the consequence of considering individual and social implications of the termination of an employment contract or the termination of employment, in one of the ways regulated by the Labor Act.
... See More + The term 'severance pay' in the Republic of Croatia is most often defined as the pecuniary amount, which the employer pays to the worker, for whom it terminates the employment contract, besides the worker's salary. This amount belongs to the worker after the expiry of the period of notice, after the termination of the employment contract. Although it has be originally conceived as reward to the workers for their loyalty to the employer, in essence the severance pay should alleviate the negative consequences of the dismissal for the worker, and it is frequently considered a means of ensuring an income, or a replacement income, so that it contains elements of social security. Each change in the national severance pay scheme is necessarily connected with redefining and newly balancing worker's and employer's interests, with aspects of employment security and flexibility and it requires processing and analyzing various aspects of the national severance pay scheme. To this end, this report aims to present and analyze all the interconnected determinants of the national severance pay scheme, such as: overview of theoretical qualifications and determinants within the national severance pay scheme; overview of arrangements within the national severance pay scheme through legal and other regulatory arrangements; overview of arrangements in different comparable national severance pay schemes; special overview of the current reforms of the severance pay scheme in the context of other relevant countries; presenting the plan for the amendments to legal and other regulatory arrangements; assessing the practical implications of the planned amendments to legal and regulatory arrangements and their effects on the national severance pay scheme; and final proposals and comments. With this, the current definitions and arrangements within the severance pay scheme would be lost, and a new scheme would be set up, which is mostly based on the characteristics of a globally innovative model for a reformed severance pay scheme as exists in the Republic of Austria.
See Less -
The national severance pay scheme, its regulation in the law and in other sources, its practice and practical application, and all the amendments of the statutory basis are the consequence of considering individual and social implications of the termination of an employment contract or the termination of employment, in one of the ways regulated by the Labor Act.
... See More + The term 'severance pay' in the Republic of Croatia is most often defined as the pecuniary amount, which the employer pays to the worker, for whom it terminates the employment contract, besides the worker's salary. This amount belongs to the worker after the expiry of the period of notice, after the termination of the employment contract. Although it has be originally conceived as reward to the workers for their loyalty to the employer, in essence the severance pay should alleviate the negative consequences of the dismissal for the worker, and it is frequently considered a means of ensuring an income, or a replacement income, so that it contains elements of social security. Each change in the national severance pay scheme is necessarily connected with redefining and newly balancing worker's and employer's interests, with aspects of employment security and flexibility and it requires processing and analyzing various aspects of the national severance pay scheme. To this end, this report aims to present and analyze all the interconnected determinants of the national severance pay scheme, such as: overview of theoretical qualifications and determinants within the national severance pay scheme; overview of arrangements within the national severance pay scheme through legal and other regulatory arrangements; overview of arrangements in different comparable national severance pay schemes; special overview of the current reforms of the severance pay scheme in the context of other relevant countries; presenting the plan for the amendments to legal and other regulatory arrangements; assessing the practical implications of the planned amendments to legal and regulatory arrangements and their effects on the national severance pay scheme; and final proposals and comments. With this, the current definitions and arrangements within the severance pay scheme would be lost, and a new scheme would be set up, which is mostly based on the characteristics of a globally innovative model for a reformed severance pay scheme as exists in the Republic of Austria.
See Less -
As developing economies continue to mature and enter the next phase of reforms, labor market issues and key policy instruments such as the minimum wage increasingly come to the forefront.
... See More + Increased globalization and wider competition compel countries to make labor markets more flexible so as not to hurt competitiveness. At the same time, policymakers face pressure to rethink labor market regulations (and social safety nets) to avoid disadvantaging workers, especially the most vulnerable who are more prone to employment insecurity. Evidence of the impact of minimum wage policies in the East Asian context and in Association of South East Asian Nations (ASEAN) countries, more specifically remains very limited. A thorough literature search identified only a few rigorous studies of the impact of minimum wages on important welfare outcomes in ASEAN countries, and some of the evidence was narrowly focused on one sector and period or from a time when the institutional setup and management of the policy was different from today. Given the relevance of the minimum wage policy in ASEAN economies, which are experiencing rapid economic growth accompanied by rising income inequality and persistent poverty among unskilled workers, having this evidence seems critical. The objective of this report is to contribute to the ongoing (and renewed) debate on the use of minimum wage policy as a tool for addressing various socioeconomic issues. It assumes minimum wages will remain in place, and the analysis seeks to address knowledge gaps on the policy's effects on worker outcomes and firm performance in order to provide guidance to policymakers in ASEAN countries (and similar contexts) on how to best manage the policy. This report consists of seven chapters and is divided into three parts. Part one focuses on the minimum wage policy, its historical evolution, and the current institutional context across ASEAN countries. Part two delves into the socio-economic impacts of the minimum wage policy on workers, households, firms, the economy, and the ASEAN region. Part three links the findings from each country to the ASEAN regional context and brings all the analysis together into a policy and operational discussion.
See Less -
This paper first reviews the history of social insurance policy and coverage in urban China, documenting the evolution in the coverage of pensions and medical and unemployment insurance for both local residents and migrants, and highlighting obstacles to expanding coverage.
... See More + The paper then uses two waves of the China Urban Labor Survey, conducted in 2005 and 2010, to examine the correlates of social insurance participation before and after implementation of the 2008 Labor Contract Law. A higher labor tax wedge is associated with a lower probability that local employed residents participate in social insurance programs, but is not associated with participation of wage-earning migrants, who are more likely to be dissuaded by fragmentation of the social insurance system. The existing gender gap in social insurance coverage is explained by differences in coverage across industrial sectors and firm ownership classes in which men and women work.
See Less -
Policy Research Working Paper WPS6497 JUN 01, 2013
The main lesson from women, business and the law 2012 on legal gender inequality when it comes to getting a job is that there is room for improvement in all regions.
... See More + All regions place restrictions on when and where women can work. Introduced to protect women, such laws ultimately limit their choices and prevent them from finding employment in some fields. A good mix of maternity, paternity, and parental leave is needed so that employers do not have incentives to discriminate against hiring women. There appears to be no ideal mix of leave, different governments will opt for different options and the benefits thus vary widely by region. Europe and Central Asia has the most generous benefits, often with heavy government funding. More legislation is needed in all regions to prohibit employers from asking about the family status of prospective employees, because, given the opportunity, women will enter a wide array of careers. The importance of these issues cannot be overestimated. Against the background of an increasingly complex global economy governments everywhere are recognizing the need to boost productivity and confront weaknesses in the policies and institutions that underpin economies' competitiveness. A proper utilization of human resources, including expanding the range of employment opportunities for women, making the law the ally of inclusion and equality is an absolutely essential prerequisite.
See Less -
Jobs are the cornerstone of economic and social development. Indeed, development happens through jobs. People work their way out of poverty and hardship through better livelihoods.
... See More + Economies grow as people get better at what they do, as they move from farms to firms, and as more productive jobs are created and less productive ones disappear. Societies flourish as jobs bring together people from different ethnic and social backgrounds and nurture a sense of opportunity. Jobs are thus transformational-they can transform what we earn, what we do, and even who we are. Jobs are instrumental to achieving economic and social development. Beyond their critical importance for individual well-being, they lie at the heart of many broader societal objectives, such as poverty reduction, economy-wide productivity growth, and social cohesion. The world development report 2013 takes the centrality of jobs in the development process as its starting point and challenges and reframes how we think about work. Adopting a cross-sectoral and multidisciplinary approach, the report looks at why some jobs do more for development than others. The report finds that the jobs with the greatest development payoffs are those that make cities function better, connect the economy to global markets, protect the environment, foster trust and civic engagement, or reduce poverty. Critically, these jobs are not only found in the formal sector; depending on the country context, informal jobs can also be transformational. Overall, countries have been successful at creating jobs. More people have jobs now than ever before, and those jobs provide generally higher earnings. Indeed, amid rapid social and economic change, poverty has declined in developing countries. Jobs are vulnerable to economic downturns, though, much more so in the private sector than the public sector. Short-term crises may wipe out years of progress. They may start in a single country but now, through globalization, spread over entire regions or to the world.
See Less -
This paper contributes new evidence from two large household surveys on the compliance of firms with severance pay regulations in Indonesia, and the extent to which changes in severance pay regulations could affect employment rigidity.
... See More + Compliance appears to be low, as only one-third of workers entitled to severance pay report receiving it, and on average workers only collect 40 percent of the payment due to them. Eligible female and low-wage workers are least likely to report receiving payments. Widespread non-compliance is consistent with trends in employment rigidity, which remained essentially unchanged following the large increases in severance mandated by the 2003 law. These results suggest that workers may benefit from a compromise that relaxes severance pay regulations while improving enforcement of severance pay statutes, and possibly establishing a system of unemployment benefits.
See Less -
Policy Research Working Paper WPS5933 JAN 01, 2012
The paper examines severance pay programs around the world by providing the first ever overview of existing programs, examining their historic development, assessing their economic rationale and describing current reform attempts.
... See More + While a significant part of the paper is devoted to a comprehensive 183 cross country review of existing severance arrangements and their characteristics, the paper goes beyond a mere description. It develops and empirically tests three hypotheses about the economic rationale of the program, namely severance pay being: (i) a primitive income protection program, (ii) an efficiency enhancing human resource instrument, and (iii) a job protection instrument. The paper also reviews the recent reforms of Austria, Chile, Italy, and Korea.
See Less -
Working Paper (Numbered Series) 62726 MAY 22, 2011
Holzmann, Robert; Weber, Michael; Pouget, Yann; Vodopivec, Milan
This 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.
... See More + 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.
See Less -
Combining information from the firm survey of labor costs with the information about claims filed with the Guarantee Fund by workers whose employers defaulted on their severance pay obligations, the paper analyzes the so-called non-performance problem of severance pay - the fact that coverage, and thus legal entitlement, does not guarantee the actual receipt of the benefit - as experienced in Slovenia in 2000.
... See More + The findings are threefold: (i) one-third of total obligations incurred by firms failed to be honored and only a small portion of defaulted severance pay claims was reimbursed by the Guarantee Fund; (ii) while both men and women seem to be equally affected, workers older than 40 were disproportion ally represented among those whose severance pay claims failed to be honored; and (iii) among firms that incurred severance pay liabilities, larger and more productive firms were more likely to observe their fiduciary obligations and pay them out. These findings corroborate the weaknesses of severance pay as an income protection program, pointing to the large scale of the non-performance problem and the inequities created by it.
See Less -
Working Paper (Numbered Series) 47070 JAN 01, 2009
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).
... See More + 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.
See Less -
Pensions panorama provides a compendium of facts and analysis that should inform policy making and public debate about retirement-income systems around the world.
... See More + The section following the introduction sets out a typology: a way of defining and classifying different kinds of pension schemes. It shows which countries have which types of pension schemes, covering all elements of the retirement-income system, including resource-tested benefits and basic pensions as well as public, earnings-related, and compulsory private pension plans. Next, the study sets out the institutional detail: the parameters and rules of different parts of the retirement-income system. The next section presents the core, empirical results: future pension entitlements of today's workers with different levels of earnings from all sources. This section includes the familiar replacement rate indicator: individual pension entitlements as a proportion of individual earnings when working. The following section explores the important role that personal income taxes and social security contributions play in determining the relative incomes of older people. In particular, it shows net replacement rates (that is, pension net of taxes and any contributions, relative to earnings, net of taxes and contributions). The third section on empirical results looks at the link between pension entitlements in retirement and earnings in work. This analysis highlights the key differences in philosophy between different countries' retirement-income systems. Moreover, changes to the pensions-earnings link have been central to many recent reforms to retirement-income regimes. The concluding section sets out a number of dimensions in which the pension systems of 53 countries differ.
See Less -