Labour Market Interventions Research Articles

Physical and mental health inequalities between native and immigrant Swedes

AbstractTo study health inequalities between native and immigrant Swedes, we investigated differences in self‐rated health (SRH), mental wellbeing (MW), common symptoms (CS), and persistent illness (PI), and if socioeconomic status (SES), negative status inconsistency, or social support could account for such differences. A secondary analysis was conducted on questionnaire data from a random adult population sample of 4,023 individuals and register data from Statistics Sweden. χ2 tests and binary logistic regressions were used to identify health differences and study these after accounting for explanatory variables. Compared with natives, immigrants more commonly reported negative status inconsistency, poorer SES, and poorer social support as well as poor SRH, very poor MW, and high level of CS but not PI. Significant differences were accounted for by work‐related factors and social support. We encourage future research to address how pre‐ and peri‐migration factors relate to immigrants’ post‐migration SES, social support, and health status. Policy Implications Given the relationship between work‐related factors (employment status, hours worked per week, and income) and all health outcomes in this study, labour market interventions that facilitate the integration of immigrants into the labour market, and into occupations that better correspond with their capacity, will arguably have public health benefits. Feelings of loneliness was, in our study, important in accounting for immigrants’ poorer self‐rated health compared with natives’. Therefore, we endorse interventions that facilitate immigrants’ social networking and integration and thereby reduce feelings of loneliness. Common physical and mental symptoms may be important indicators of health and we, thus, suggest these to be taken into account when developing ill‐health prevention programmes.

A Firm of One's Own: Experimental Evidence on Credit Constraints and Occupational Choice

This study presents results from a randomized evaluation of two labor market interventions targeted to young women aged 18 to 19 years in three of Nairobi's poorest neighborhoods. One treatment offered participants a bundled intervention designed to simultaneously relieve credit and human capital constraints; a second treatment provided women with an unrestricted cash grant, but no training or other support. Both interventions had economically large and statistically significant impacts on income over the medium term (7 to 10 months after the end of the interventions), but these impacts dissipated in the second year after treatment. The results are consistent with a model in which savings constraints prevent women from smoothing consumption after receiving large transfers -- even in the absence of credit constraints, and when participants have no intention of remaining in entrepreneurship. The study also shows that participants hold remarkably accurate beliefs about the impacts of the treatments on occupational choice

Do youth employment programs improve labor market outcomes? A quantitative review

Bringing young people into productive work is a key labor market challenge in both developing and developed economies, and a multitude of labor market interventions have been implemented to assist vulnerable youths. To assess whether these interventions have succeeded in improving young people’s labor market outcomes, this study systematically and quantitatively reviews 113 impact evaluations of youth employment programs worldwide. Of a total of 3105 effect estimates we extract from these studies, one-third are positive significant. The unconditional average effect size across all programs is small, both for employment-related outcomes (Hedges’ g = 0.05, SE = 0.02) and earnings-related outcomes (Hedges’ g = 0.04, SE = 0.02). We analyze correlates of success in a meta-regression framework. We find that (i) programs are more successful in middle- and low-income countries; (ii) the intervention type is less important than design and delivery; (iii) programs integrating multiple services are more successful; (iv) profiling of beneficiaries, individualized follow-up systems and incentives for services providers matter; and (v) impacts are of larger magnitude in the long-term. Some of these findings provide new and important insights about the design and delivery of interventions, whereas others confirm those of previous reviews. Ultimately, our findings provide practitioners with an improved evidence base about how certain design features contribute to successful youth employment programs in different contexts.

Explaining the Informal Economy: an Exploratory Evaluation of Competing Perspectives

The aim of this paper is to conduct an exploratory analysis of the wider economic and social conditions associated with larger informal economies. To do this, three competing perspectives are evaluated critically which variously assert that cross-national variations in the size of the informal economy are associated with: under-development (modernization perspective); high taxes, corruption and state interference (neo-liberal perspective), or inadequate state intervention to protect workers (political economy perspective). Analyzing the variable size of the informal economy across 33 developed and transition economies, namely 28 European countries and five other OECD nations (Australia, Canada, Japan, New zealand and the USA), the finding is that larger informal economies are associated with under-development as measured by lower levels of GNI per capita, employment participation rates, average wages and the institutional strength and quality of the bureaucracy, higher levels of perceived public sector corruption, lower levels of expenditure on social protection and labour market intervention to protect vulnerable groups, but also restrictions on the use of temporary employment contracts and TWAs. The outcome is a tentative call to combine a range of tenets from all three perspectives in a new more nuanced and finer-grained understanding of how the cross-national variations in the size of the informal economy are associated with broader economic and social conditions. The paper concludes by discussing the implications for theory and policy, including the need for further analysis of the different impacts on the size of the informal economy of a wider range of indicators of modernization, corruption, taxation and types of state intervention.

Bank Credit and Unemployment

The worst employment slumps tend to follow the largest expansions of household debt. In this paper, we theoretically investigate an amplification mechanism by which debt on household balance sheets distorts labor market search behavior, leading to deeper employment slumps. Using a competitive search model, we find that levered households protected by limited liability engage in risk-shifting by searching for jobs with high wages but low employment probabilities. In general equilibrium, firms respond to this household preference distortion and post high wages but few vacancies. This vacancyposting effect implies that high household debt leads to high unemployment, a result that casts light on why labor market recoveries are sluggish after financial crises. The equilibrium level of household debt is inefficiently high dueto a household-debt externality—banks fail to internalize the effect that household leverage has on employment via the vacancy-posting effect. We analyze the role that a financial regulator can play in mitigating this externality. We find that loan-to-value caps for households and capital requirements for banks can elevate employment and improve efficiency, providing an alternative to monetary policy for labor market intervention.

Macroprudential Policy and Labor Market Dynamics in Latin America

This paper builds a small open economy business cycle model with labor and financial market frictions that incorporates frictional, endogenous self-employment entry and a link between formal credit markets, informal credit, and the labor market. The paper then shows that the model is consistent with the cyclical behavior of both labor and credit markets in Latin American economies and analyzes the aggregate consequences of cyclical macroprudential policy for labor market and aggregate dynamics. It is found that a policy that reduces credit fluctuations successfully reduces consumption, investment, and output volatility, but generates substantially higher unemployment fluctuations in response to productivity shocks. Moreover, the policy increases the volatility of all these variables in response to net worth shocks. The link between formal credit markets, input credit between firms, and self-employment plays a key role in explaining the adverse impact of macroprudential policy on unemployment dynamics. The findings point to potential gains from policy complementarities between macroprudential regulation and active labor market interventions over the business cycle.

Assessing the Activities of Self-help Groups in Social Protection in Southeast Nigeria

Aim : This paper assessed the activities of self - help groups (SHGs) in social protection. Study Design: Members of registered and non - registered SHGs were randomly selected and interviewed based on the activities of the groups in the study area. Place : Southeast Nigeria at Latitude 5 ⁰ N and 7 ⁰ 30' and Longitude 5 ⁰ E and 10 ⁰ E. Methodology : The study was conducted in the South - eastern states of Nigeria. Three states were eventually chosen for the study namely Abia, Anambra and Imo. A total of 108 registered SHGs were randomly selected and 540 members were interviewed; a total of 108 non - regis tered SHGs were also selected with; 540 members of the groups were interviewed. Descriptive statistics were used in the analysis of data. Results : The results show that the identified SHGs were mainly made up of people operating in the informal sector and were predominantly engaged in agricultural activities. Majority of the respondents represented by 82% stated that the services obtained from the SHGs were inadequate while 18% stated that they were adequate for their purposes. This adequacy can be describ ed as restricted adequacy as the services extended to the beneficiaries were tailored to the slim resources of the SHGs. All the social protection services provided by the SHGs were mainly based on social insurance services complemented by social assistanc e. The services were sufficiently deficient in labour market interventions. There was no form of interaction among the SHGs as they

Quantity over quality: a political economy of ‘active labour market policy’ in the UK

This article offers a critical evaluation of recent ‘active labour market policy’ (ALMP) initiatives in the UK, focusing on the coalition government's Work Programme and its immediate antecedents. ALMP exemplifies a supply-side employment strategy, reorienting the state away from supporting labour demand and towards promoting the ‘employability’ of individuals within existing labour market structures. The article locates the rationale for this policy agenda within the wider politics of economic growth. Belying its status as a pioneer of ALMP, the UK spends very little on supply-side labour market interventions relative to other European countries. This can be explained with reference to the type of ALMP interventions prioritised in the UK, which in turn is explained by the growth model that ALMP is designed to sustain. The UK's growth model requires an abundance of low-paid jobs in the labour-intense and volatile services sector. Ostensibly, ALMP fulfils this requirement by ensuring that individuals are immediately available for work, marginalising concerns about pay and job quality. Moreover, ALMP also serves to inculcate the desirability of certain behaviours at the individual level. The coalition government's approach demonstrates an intensification rather than transformation of previous practice, indicative of its support for resurrecting the UK's pre-crisis growth model.

Realizing universal health coverage for maternal health services in the Republic of Guinea: the use of workforce projections to design health labor market interventions.

BackgroundUniversal health coverage requires a health workforce that is available, accessible, and well-performing. This article presents a critical analysis of the health workforce needs for the delivery of maternal and neonatal health services in Guinea, and of feasible and relevant interventions to improve the availability, accessibility, and performance of the health workforce in the country.MethodsA needs-based approach was used to project human resources for health (HRH) requirements. This was combined with modeling of future health sector demand and supply. A baseline scenario with disaggregated need and supply data for the targeted health professionals per region and setting (urban or rural) informed the identification of challenges related to the availability and distribution of the workforce between 2014 and 2024. Subsequently, the health labor market framework was used to identify interventions to improve the availability and distribution of the health workforce. These interventions were included in the supply side modeling, in order to create a “policy rich” scenario B which allowed for analysis of their potential impact.ResultsIn the Republic of Guinea, only 44% of the nurses and 18% of the midwives required for maternal and neonatal health services are currently available. If Guinea continues on its current path without scaling up recruitment efforts, the total stock of HRH employed by the public sector will decline by 15% between 2014 and 2024, while HRH needs will grow by 22% due to demographic trends. The high density of HRH in urban areas and the high number of auxiliary nurses who are currently employed pose an opportunity for improving the availability, accessibility, and performance of the health workforce for maternal and neonatal health in Guinea, especially in rural areas.ConclusionGuinea will need to scale up its recruitment efforts in order to improve health workforce availability. Targeted labor market interventions need to be planned and executed over several decades to correct entrenched distortions and mismatches between workforce need, supply, and demand. The case of Guinea illustrates how to design and operationalize HRH interventions based on workforce projections to accompany and facilitate universal health coverage reforms.

Sense of Coherence Mediates the Effects of Low Work Ability on Mental Distress During Unemployment

Previous research has found that work ability (as measured with the Work Ability Index) is related to mental health in employee samples and in the general population. This study extends this research to unemployed people. In addition, it tests whether the effect of impaired work ability on mental health can be explained by changes in sense of coherence. A longitudinal design with two measurement points was used with a sample (N = 98) of jobless individuals in Finland participating in labor market interventions. Consistent with expectations, impaired work ability predicted lower sense of coherence and more psychological distress, and the association between impaired work ability and distress was mediated by sense of coherence. The important role of impaired work ability for jobless individuals' sense of coherence and, consequently, mental health during unemployment is discussed.

Out of the shadows: a classification of economies by the size and character of their informal sector

Given that 60 per cent of the global workforce is in the informal sector, this article develops a typology that classifies economies according to, firstly, where different countries sit on a continuum of informalization and, secondly, the character of their informal sectors. This is then applied to the economies of the 27 member states of European Union (EU-27). Finding a clear divide from east to west and south to north in the EU-27, with the more informalized and wage-based informal economies on the eastern/southern side and the less informalized and more own-account informal economies on the western/Nordic side, it is then revealed that formalization and more own-account informal sectors are significantly correlated with wealthier and more equal (as measured by the gini-coefficient) countries in which there is greater labour market intervention, higher levels of social protection and more effective redistribution via social transfers. The article concludes by discussing the implications for theory and practice.

A multi‐dimensional analysis of the impacts of the Mahatma Gandhi National Rural Employment Guarantee Scheme: A tale from Tamil Nadu

This paper provides a multi‐dimensional analysis of the impacts of the Indian Mahatma Gandhi National Rural Employment Guarantee Scheme using a case study from rural Tamil Nadu. Drawing on structured interviews in households and semi‐structured interviews with local employers and officials, we analyse the effects of the workfare scheme when it is widely and properly implemented. We distinguish between different conceptualizations of the work scheme as a means of welfare provision, labour market policy and intervention directed towards other objectives. We found that the goals of the scheme were fulfilled unevenly in the given context. Among other findings, we show that positive effects on the welfare of participating and non‐participating households were accompanied by adverse effects on the local economy and negligible impact on out‐migration for work.

Evaluating cross‐national variations in the extent and nature of informal employment in theEuropeanUnion

AbstractThis article evaluates critically the contrasting explanations for the cross‐national variations in the prevalence and nature of informal employment, which variously view such work as more prevalent in poorer, under‐developed economies; driven by high taxes, corruption and state interference that lead workers to exit formal employment; or driven by inadequate state intervention leading to the exclusion of workers from formal employment and state welfare provision. By analysing cross‐national variations across the European Union in the size of informal employment using indirect measurement methods and in its varying character using evidence from a 2007 Eurobarometer survey, it was found that wealthier, less corrupt and more equal economies with higher levels of labour market intervention, social protection and redistribution via social transfers have lower levels of informal employment, much of which is conducted to exit formal employment. The paper concludes by exploring the theoretical and policy implications.

Evaluating the extent and nature of the informalization of employment relations in South-East Europe

The analysis of employment relations needs to include work in the informal economy. For this purpose, we propose a ‘degrees of informalization’ framework that evaluates the proportion of employment relations infused with informality and the nature of this permeation. We apply this framework to South-East Europe, using evidence from a 2007 Eurobarometer survey. Informality is extensive, largely in the form of under-declared formal waged employment, although significant variations exist across countries. There is a strong correlation between capitalist societies with higher levels of labour market intervention, social protection, redistribution via social transfers and equality, and lower levels of informality.

The global financial crisis, employment relations and the labour market in Singapore and Australia

This article examines the impact of the global financial crisis (GFC) on two Asia-Pacific countries – Singapore and Australia. After briefly outlining the origins and effect of the GFC in each country, it explores the responses to the crisis from government and policy-makers. The article uses a case study methodology, drawing on key macroeconomic and labour market statistics, statements by trade unions, employer associations and governments and related agencies as well as published expert commentary and analysis. The article argues that, along with extensive stimulus measures, tripartite efforts and labour market interventions contributed to the resilience observed in both cases.

Can the modernisation of a public employment service be an effective labour market intervention? The Hungarian experience, 2004-2008

The Public Employment Service often delivers much of the employment policy including active labour market programmes in many member states in the EU, yet we know little about its effectiveness in general. This paper provides a quantitative assessment of the potential impact of the modernisation programme of the Hungarian Public Employment service between 2004 and 2008. Using data at the level of local offices, I calculate programme effects using a difference-in-difference estimator. Results show that the programme has increased re-employment rates significantly, by 6%. The modernisation was thus a moderately effective but relatively inexpensive intervention, similar in terms of cost-effectiveness to the better active labour market programmes in Hungary.

Unemployment and economic security for young adults inFinland,Norway andSweden: From unemployment protection to poverty relief

In this study, we investigated if there has been a displacement in the type and coverage of welfare services available for young unemployed adults inFinland,Norway andSweden over the last two decades. This question is important because a number of studies have argued that the generous unemployment benefits and extensive labour market intervention found in theNordic welfare states shield young people from the most severe consequences of economic inactivity. In this article, we instead show that during this period, less generous means‐tested unemployment and social assistance benefits have become the most important form of income protection for young people. In evidence, earnings‐related unemployment benefits now cover only 10 per cent of unemployedSwedes andFinns and 45 per cent of unemployedNorwegians aged 24 years or younger. This development marks a significant change in our understanding of unemployment protection for young people inNordic countries.

Skill-Biased Labor Market Reforms and International Competitiveness

AbstractThis paper proposes a multi-industry trade model with integrated capital and goods markets. Labor market imperfections in line with Mortensen and Pissarides (Job Creation and Job Destruction in the Theory of Unemployment, 1994) give rise to unemployment and a channel for the government to influence markets through institutional changes. Labor market interventions feedback into the product market through changes in a country’s competitiveness. Moreover, the distinction between high- and low-skill workers facilitates the analysis of skillbiased institutional changes that have stronger impact on certain skill groups. The comparative static exercise in this paper shows that high-skilled benefit from low-skill biased labor market reforms through higher wages. Lower labor costs reduce unemployment of the low-skilled and increases the reforming country’s competitiveness. One-sided labor market interventions have feedback effects through adjustments at the extensive margin, which affect all workers at home and abroad irrespective of their level of skill. Governments in the non-reforming countries may react to this loss in competitiveness by initiating cooperative labor market reforms instead.

Surmountable Hurdles? Employers’ Perception of the Long Term Unemployed and Labour Market Interventions

Over the last few years, most OECD countries have extended their activation policy to new groups of non-working people, including the long term unemployed (LTU). However, it is known that LTU people tend to be regarded as potentially problematic persons by employers. This is likely to constitute a major obstacle for long term unemployed jobseekers. On the basis of a survey among employers in a Swiss canton (N=722), this paper aims to shed some light on the perception employers have of the long term unemployed and whether may matter for recruitment practices. It also asks what, from the employer point of view, may convince them to take the risk of hiring a LTU person. Key findings: Large companies are more likely to use long term unemployment status as a discriminating factor. More likely to hire LTU people seem to be employers who are aware of some of the problems this group may have (low productivity) and who are used to work with the employment agency. Finally, a test period or the recommendation of a trustworthy person are seen as the factors most likely to facilitate access to jobs for LTU people.

World Development Report 2012: Radical redistribution or just tinkering within the template?

The World Development Report 2012, rather radically, responds to employment segregation by advocating affirmative action. This move could prove momentous – mainstreaming a hitherto peripheral feminist cause. Drawing on research about changing gender roles in Zambia's Copperbelt, this paper demonstrates the importance of creating role models through active labour market interventions. However, apart from the World Bank's commendably radical push for redistribution, its macroeconomic template remains remarkably intact – neither perturbed by the global economic crisis nor by much feminist economics.