Beyond Full Employment: What Argentina’s Plan Jefes Can Teach Us about the Employer of Last Resort

Abstract

The present chapter examines the only real-world program for direct job creation that was specifically modeled after the modern Employer of Last Resort (ELR) proposal developed in the United States (Kostzer, 2008). This is Argentina’s Plan Jefes y Jefas de Hogares (Jefes orPlan Jefes hereafter), which was launched after the 2001 financial meltdown to deal with the devastating economic fallout. Plan Jefes offered a voluntary job opportunity to unemployed heads of households in a community project and was federally funded but locally administered. The program design did not conform completely to the ELR proposal, but, nevertheless, exhibited important institutional features that will be examined here. The first task is to assess whether Plan Jefes provided the macroeconomic stabilization effects that advocates attribute to the ELR program. The second is to evaluate how ELR programs can be designed to do more than just deal with the problems of economic instability and unemployment. Though not by design, Plan Jefes illustrated that public employment programs can have a transformative impact on persistent socioeconomic problems such as extreme poverty and gender disparity. Because the latter two are multidimensional problems, the ELR cannot be treated as a panacea, but should be seen instead as an important policy tool that remedies some of the most entrenched and resilient causes of poverty and gender inequality.