Establishing robust, equitable, and effective social protection is essential to reducing poverty and boosting prosperity at all levels of development.
... See More + The demographic transition that has already transformed most high-income societies will exert similar and growing pressures on others, reinforcing the role of pensions and savings for old age as a central pillar of social protection systems. One possible solution that has emerged in recent years that offers the potential to overcome this challenge is the provision of contribution matches to provide an immediate and powerful incentive for participation in pension saving systems. Originating in several high-income settings there are now a number of innovations and substantial experience in low-income countries in using this design to stimulate coverage and savings. This experience now provides a rich opportunity for learning, not just from the longer experience of a few high-income countries but also the more meaningful South-South learning across developing countries. This volume, which reviews the experience with matching pension contributions across the range of countries that have used the design, makes an initial, but critically important investment in this learning process. The description and analysis of this experience which is the product of partnership and collaboration across many public and private institutions provide an invaluable early assessment of the design to inform policy makers and practitioners as well as serve as a model for the kind of cooperation that will be required to address this difficult challenge. At the World Bank, we look forward to being part of this learning process of how to best provide old-age security for all. See Less -
This Executive Directors' strategic engagements work program covers FY16 Q4, FY17 Q1, and updated reports and other documents to be circulated for information.
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Using manufacturing plant-level census data, this paper demonstrates that minimum wage increases in Indonesia reduced gender wage gaps among production workers, with heterogeneous impacts by level of education and position of the firm in the wage distribution.
... See More + Paradoxically, educated women appear to have benefitted the most, particularly in the lower half of the firm average earnings distribution. By contrast, women who did not complete primary education did not benefit on average, and even lost ground in the upper end of the earnings distribution. Minimum wage increases were thus associated with exacerbated gender pay gaps among the least educated, and reduced gender gaps among the best educated production workers. Unconditional quantile regression analysis attests to wage compression and lighthouse effects. Changes in relative employment prospects were limited.
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Policy Research Working Paper WPS7364 JUL 13, 2015
On August 5, 2014, International Bank for Reconstruction and Development (IBRD) Board of Governors adopted resolution number six hundred and thirty-seven.
... See More + It was resolved that the changes to the Staff Retirement Plan approved by Executive Directors of the Bank on December 19, 2013, with regard to new survivor benefits and increased voluntary participant contributions under that Plan, shall also apply to Executive Directors of the Bank and their Alternates on the same basis as the staff, effective as of the same dates applicable to the staff.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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The 2013 World Development Report on jobs helps to explain and analyze the connection between jobs and important dimensions of economic and social development.
... See More + It provides analytical tools to identify the obstacles to sustained job creation and examine differences in the nature of jobs. Jobs are the cornerstone of economic and social development. This report 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 poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict. The report advances a three-stage approach to help governments meet these objectives. First, policy fundamentals, including macroeconomic stability, an enabling business environment, investments in human capital, and the rule of law, are essential for both growth and job creation. Second, well-designed labor policies can help ensure that growth translates into employment opportunities, but they need to be complemented by a broader approach to job creation that looks beyond the labor market. Third, governments should strategically identify which jobs would do the most for development given their specific country context, and remove or offset the obstacles that prevent the private sector from creating more of those jobs.
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The 2013 World Development Report on jobs helps to explain and analyze the connection between jobs and important dimensions of economic and social development.
... See More + It provides analytical tools to identify the obstacles to sustained job creation and examine differences in the nature of jobs. Jobs are the cornerstone of economic and social development. This report 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 poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict. The report advances a three-stage approach to help governments meet these objectives. First, policy fundamentals, including macroeconomic stability, an enabling business environment, investments in human capital, and the rule of law, are essential for both growth and job creation. Second, well-designed labor policies can help ensure that growth translates into employment opportunities, but they need to be complemented by a broader approach to job creation that looks beyond the labor market. Third, governments should strategically identify which jobs would do the most for development given their specific country context, and remove or offset the obstacles that prevent the private sector from creating more of those jobs.
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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.
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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.
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Working Paper (Numbered Series) 62726 MAY 22, 2011
This Results Profile talks about Employment and Growth Study in Nigeria. In spite of Nigeria’s strong growth performance since 2001, unemployment did not decline and youth unemployment kept rising.
... See More + The Employment and Growth Study used the National Accounts to understand the Nigerian labor market and the structure of employment in the formal and the informal sectors. The study proposed a strategy to increase the employment intensity of growth by targeting binding constraints to development in sectors of the economy that had the highest growth and employment potential. The constraints included import bans, access to finance, the business environment, physical infrastructure, and lack of skilled labor
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This Results Profile talks about Employment and Growth Study in Nigeria. In spite of Nigeria’s strong growth performance since 2001, unemployment did not decline and youth unemployment kept rising.
... See More + The Employment and Growth Study used the National Accounts to understand the Nigerian labor market and the structure of employment in the formal and the informal sectors. The study proposed a strategy to increase the employment intensity of growth by targeting binding constraints to development in sectors of the economy that had the highest growth and employment potential. The constraints included import bans, access to finance, the business environment, physical infrastructure, and lack of skilled labor
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