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How effective are active labor market policies in developing countries a critical review of recent evidence (English)

Jobs are the number one policy concern of policy makers in many countries. The global financial crisis, rising demographic pressures, high unemployment rates, and concerns over automation all make it seem imperative that policy makers employ increasingly more active labor market policies. This paper critically examines recent evaluations of labor market policies that have provided vocational training, wage subsidies, job search assistance, and assistance moving to argue that many active labor market policies are much less effective than policymakers typically assume. Many of these evaluations find no significant impacts on either employment or earnings. One reason is that urban labor markets appear to work reasonably well in many cases, with fewer market failures than is often thought. As a result, there is less of a role for many traditional active labor market policies than is common practice. The review then discusses examples of job creation policies that do seem to offer promise, and concludes with lessons for impact evaluation and policy is this area.

Details

  • Author

    Mckenzie,David J.

  • Document Date

    2017/03/22

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS8011

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2017/03/22

  • Disclosure Status

    Disclosed

  • Doc Name

    How effective are active labor market policies in developing countries ? a critical review of recent evidence

  • Keywords

    Finance & Private Sector Development;Vocational Training;active labor market policy;Active Labor Market Policies;wage subsidy;Wage Subsidies;active labor market intervention;active labor market program;short period of time;concern of policy makers;private sector development programs;global financial crisis;formal employment;vocational training program;demand for labor;youth training program;number of jobs;wage subsidy program;soft skills training;job search assistance;impacts on employment;cost of labor;business process outsourcing;skill train program;labor market condition;quality of job;access to financing;employment in industry;large youth unemployment;life skill training;propensity score matching;short time horizon;high unemployment rate;urban labor market;high minimum wages;formal schooling system;local labor market;investments in infrastructure;measurement of cost;skill training programs;increase in income;registered job seekers;temporary wage subsidy;public service provider;private sector demand;government training institute;

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Citation

Mckenzie,David J.

How effective are active labor market policies in developing countries a critical review of recent evidence (English). Policy Research working paper,no. WPS 8011,Impact Evaluation series Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/256001490191438119/How-effective-are-active-labor-market-policies-in-developing-countries-a-critical-review-of-recent-evidence