Labour Market Interventions Research Articles

3 - Randomised Trials As A Dead-End For African Development

Randomised Control Trials (RCTs) have been presented as a method for identifying interventions that will improve the lives of residents of economically poorer countries. I argue that RCT-driven development policy is unlikely to achieve even its narrower objectives and, instead, is likely to hinder the attainment of long-term economic and social development objectives in African countries. The article examines two fundamental methodological problems: first, that proselytisers of this approach, despite claims to the contrary, have not addressed the challenge of extrapolating from experimental results to policy interventions; second, that while the use of RCTs is framed as an objective scientific approach to policymaking, it systematically smuggles in the ideological and other biases of the researchers involved. These claims are illustrated with three sets of examples: controversial studies that involved cutting off water to poor households in Nairobi and randomising exposure to a Christian missionary programme in the Philippines; studies on civil servant absenteeism in Kenya and India cited in the 2019 Nobel award; and two case studies from South Africa pertaining to labour market and educational interventions where RCTs distorted the policy process with negative consequences. The conclusion is that the RCT approach is a dead end for African development.

The Interactions between Labour Market Policies and Income Inequalities in Groups of European Union Countries

Social cohesion and a sustainable labour market remain the aims of sustainable development policy. However, income inequalities and labour market policies are more often separately analysed. To fill the identified research gap, our article presents the results of an analysis of interactions between active and passive labour market policies and income inequalities in the European Union. The 27 countries were divided into two clusters based on their active and passive labour market policy (LMP) expenditures in 2019. These clusters sustain the basis for analysing the interactions between LMP and income inequalities in its different measures. The results reveal that labour market interventions interact with income inequalities, decreasing disposable income inequalities (equalising the disposable income after transfers and taxes) and therefore contributing to social cohesion. This paper concerns social cohesion as the manifestation of intragenerational justice.

Reimagining the Deduction for Employee Compensation

U.S. businesses pay trillions of dollars in employee compensation, a substantial fraction of which is deductible for tax purposes. This deduction reduces the taxable income of businesses, ultimately lowering business tax burdens by hundreds of billions of dollars. With a few exceptions, the tax code confers the same deduction to a business for every dollar of employee compensation, regardless of whether that compensation goes to an employee earning millions or an employee earning minimum wage. This is consistent with a pure Haig-Simons income tax, under which any business expense incurred ought to be deductible dollar-for-dollar. But many, if not most, tax policy objectives are inconsistent with a pure income tax, and the U.S. tax code is accordingly replete with substantial deviations from a pure income tax. This Article considers what would happen if the deduction for employee compensation also deviated from a pure income tax. It finds that allowing employers larger deductions for compensation paid to low-wage workers would counteract persistent deficiencies in the U.S. labor market. A larger deduction for low-wage workers would incentivize businesses to both hire more low-wage workers and pay them more. This would decrease the number of workers earning paltry wages, reverse the decline in U.S. labor force participation, restrain the employer market power exerted in many local labor markets, and correct the negative externalities from low-wage work. As part of its analysis, this Article considers how a larger deduction for low-wage compensation might be funded, focusing on funding sources that synergize with a larger compensation deduction for low-wage workers—including higher business tax rates and smaller deductions for high-wage workers—and it details the tradeoffs associated with these different policy options. This Article also explains why behavioral frictions may make an employer-side subsidy a more effective labor market intervention than an employee-side subsidy, such as the earned income tax credit (EITC).

The Promises and Shortcomings of Artificial Intelligence for Labour Market Interventions

The Promises and Shortcomings of Artificial Intelligence for Labour Market Interventions

What steps can improve and promote investment in the health and care workforce in Europe?

Abstract Background Recent experiences from Ireland and elsewhere have shown the urgent need for countries and international actors to prioritize investment in the health and care workforce (HCWF) and ensure funding is used well. This research, based on a European Observatory on Health Systems and Policies policy brief, explores: i) areas for strategic investments in the HCWF; and ii) how greater funding from domestic and international sources can be secured. Methods A scoping review of English-language peer reviewed and grey literature was conducted across databases and online repositories including PubMed, Scopus, Web of Science, Google Scholar, WHO data collections. The literature search focused on two areas: 1) areas for strategic investments in the organization, training, deployment and management of the HCWF; 2) actions that can help scale-up investment from domestic and international financing sources. Findings Strategic investments to effectively enhance the sustainability of the HCWF can be grouped into strategies that aim to: 1) increase the quantity, quality and diversity of available HCWs through education investments; 2) reskill and optimize use of the HCWF through investments in preventative and primary care, skill mix reforms and digital technologies; 3) improve employment and retention through labour market interventions and protecting, supporting and managing the HCWF. Ministries of Health must be able to share the measurable benefits of workforce development to secure greater investment, which requires: evidence on the socioeconomic benefits of HCWF investments; strong leadership and capacity; improved intersectoral governance processes; and more efficient and transparent health sector budget cycle processes. Conclusions Education, employment and retention of HCWs needs to be a priority in public expenditure to increase supply, protect the existing workforce and plan ahead to address future challenges.

Social protection for refugees and migrants: Examining access to benefits and labour market interventions

AbstractThe article discusses the current practices for providing social protection to refugees and migrants, focusing primarily on low‐ and middle‐income (LMICs) destination countries. It examines formal providers of social protection, including state institutions, development agencies and humanitarian organizations. In recent years, there has been an increase in funding from multilateral donors, especially in the context of the COVID–19 pandemic, leading to the establishment of national assistance programmes in LMICs that also encompass refugees and to a lesser extent migrant workers. International agencies play a crucial role in providing humanitarian cash assistance to refugees, given their status under international protection under the 1951 Refugee Convention and related protocols. Access to social insurance remains tied to formal employment. Social insurance entitlements for migrants are often restricted and refugees are typically excluded from formal employment in LMICs. Regarding labour market interventions, refugees and migrants are often excluded from national programmes, with migrants’ residence permits being often tied to employment. For refugees, international agencies take a prominent role in providing livelihood programmes aimed at enhancing income‐generating opportunities, economic inclusion and financial independence. However, the effectiveness of these interventions remains unclear, lacking rigorous evidence, and often being short‐term with limited coverage.

Food system labor and bargaining power

Historically, pandemics lead to labor shortages, and the COVID-19 pandemic of 2020-21 proved to be no different. While there are many explanations for supply-chain issues reported in a number of industries, the proximate cause for ongoing problems in producing, processing, and delivering food to consumers has been attributed to a lack of labor. If this is the case, then the apparent shortage is likely to manifest in greater bargaining power by workers in the food and agriculture industry, defined generally, during the COVID pandemic. In this paper, we test whether the COVID-19 pandemic is associated with greater bargaining power among food and agriculture workers using a structural model of labor search-and-bargaining, and examine the effect of policy responses to COVID-19 on labor-market outcomes. Using data from the American Community Survey (ACS, Bureau of Census) for wage outcomes in 2019 and 2020, we find that the COVID pandemic was responsible for a 5.7% increase in bargaining power for employed workers. Our counterfactual simulations examine the impact of two labor-market interventions – minimum-wages and unemployment insurance – on equilibrium wages. We find that lower minimum wages leave more employment surplus to employers, allowing them to bid up equilibrium wages, while more generous unemployment insurance reduces the supply of labor, and increases equilibrium wages.

Varieties of capitalism and income inequality

Why do countries diverge significantly in the levels of income inequality across the Global North? Most scholars believe that the answer lies in the ways that economic resources are organized through institutions. Drawing on a country-level, longitudinal dataset from 1985 to 2016 matched with three other data sources, the author explains how and to what extent institutions matter for income inequality across the “varieties of capitalism.” To sort countries based on their institutional similarities, the author conducts cluster analysis and examines the extent to which institutions predict variation in the levels of income inequality, both cross-nationally and within each cluster of countries. In cross-national, panel data regressions, strong evidence is presented that labor market interventions such as vocational rehabilitation programs as well as characteristics of corporate governance are important determinants of income inequality.

Tackling Ethnic Minority Disadvantage: The Differential Impact of Short-term and Long-term-Oriented Strategies on Subsequent Job Matches and Sustainable Employment

In the Netherlands, the generic work-first support seems unable to mitigate the scarring effects of prior unemployment on ethnic minorities’ careers. This study compares the impact of vulnerable ethnic minorities participating in an alternative employer-based employment programme with a control group entitled to work-first support on employment up to ten years later. We look at how both labour market interventions with different time horizon strategies may close the employment gap with the regular labour force. Results indicate that programme participants from (non-)western groups achieve higher levels of (competitive) employment than the control group, but the programme’s impact is negligible for the most established ethnic groups. The improved short-term wage match can partially explain the additional programme effect when considering the different time horizon strategies. Our results call for more employer-based programmes providing vulnerable ethnic minorities with the desired skills for better employment prospects, e.g. skill-shortage jobs.

Legal Analysis of Social Protection in Disaster Management in the Province of Lampung

Based on Law Number 24 of 2007 and Government Regulation Number 21 of 2008 concerning the implementation of disaster management, which consists of pre-disaster, emergency response, and post-disaster stages, as well as four types of social protection in the post-disaster stage, which include social assistance, social insurance, labor market intervention, and social care services. This research aims to interpret the legal framework of disaster management for 15 districts/cities in Lampung Province. This research uses a normative legal research method (legal research), which bases its analysis on applicable laws and regulations that are relevant to the issues that are the focus of the research. According to data analysis conducted on 15 districts and cities in Lampung Province, 11 of them have regional rules on disaster management that include pre-disaster, emergency response, and post-disaster phases. Regulations for all phases of disaster management are still lacking in the other four districts.
 Keywords: pre-disaster, emergency response, and post-disaster stages, social assistance, social insurance, labor market intervention, social care services

Modelling the long-term fairness dynamics of data-driven targeted help on job seekers

The use of data-driven decision support by public agencies is becoming more widespread and already influences the allocation of public resources. This raises ethical concerns, as it has adversely affected minorities and historically discriminated groups. In this paper, we use an approach that combines statistics and data-driven approaches with dynamical modeling to assess long-term fairness effects of labor market interventions. Specifically, we develop and use a model to investigate the impact of decisions caused by a public employment authority that selectively supports job-seekers through targeted help. The selection of who receives what help is based on a data-driven intervention model that estimates an individual’s chances of finding a job in a timely manner and rests upon data that describes a population in which skills relevant to the labor market are unevenly distributed between two groups (e.g., males and females). The intervention model has incomplete access to the individual’s actual skills and can augment this with knowledge of the individual’s group affiliation, thus using a protected attribute to increase predictive accuracy. We assess this intervention model’s dynamics—especially fairness-related issues and trade-offs between different fairness goals- over time and compare it to an intervention model that does not use group affiliation as a predictive feature. We conclude that in order to quantify the trade-off correctly and to assess the long-term fairness effects of such a system in the real-world, careful modeling of the surrounding labor market is indispensable.

Impact of women’s economic empowerment on the rise of female entrepreneurship and human capital in Botswana

The authors investigated the importance of women’s economic empowerment and its impact on the rise of female entrepreneurship and human capital in Botswana. The research included a case study analysis with four in-depth expert interviews. Data triangulation ensured the study's validity, and the case was examined through pattern matching. The results demonstrate that female entrepreneurs face challenges such as access to resources and education, socio-cultural norms, a lack of social protection, and a large and unprotected informal sector. The government and institutions shall promote women's enablement through a direct labor market intervention, support for the informal sector, a gender-sensitive constitutional, legal, and institutional framework, the enforcement and oversight of gender-responsive laws and policies, and access to resources and education. Furthermore, women require digital inclusion, entrepreneur networks, social protection, and reformed socio-cultural norms. If female entrepreneurs are empowered adequately, they will contribute to nations' human capital, economic growth, and development.

Csíki-medence munkaerőpiaci helyzetképe

"The study analyses the labour market situation in the Bazinul Ciucului based on the data of the Romanian National Statistical Office, closely linked to the research on Szeklerland and the Bazinul Ciucului. The aim of the study is to analyse the social and economic trends in the area under study, with a particular focus on the evolution of labour market data in rural municipalities. The findings will provide insights into the economic performance and competitiveness of the municipalities of the Bazinul Ciucului and its labour market situation, helping decision-makers and local authorities to explore the labour market and plan interventions to increase employment. The results show that in most municipalities there have been no major changes in the labour market over the last 10 years. Both the number of employed and the number of registered unemployed are low compared to the population of the municipalities. The unemployment rate is not high in principle, but it is still significant, due to the statistically difficult to measure share of the unemployed who are not registered (e.g. houseworkers, temporary foreign workers) and the share of the unemployed who are working in the black economy."

The impact of women's economic empowerment on the rise of female entrepreneurship and human capital in South Africa

The authors investigated the importance of women's economic empowerment and its impact on the rise of female entrepreneurship and human capital in South Africa. The research included a case study analysis with four in-depth expert interviews. Data triangulation ensured the study's validity, and the case was examined through pattern matching. The results demonstrate that female entrepreneurs face challenges such as access to resources and education, socio-cultural norms, a lack of social protection and a large and unprotected informal sector. The government and institutions shall promote women's enablement through a direct labour market intervention, support for the informal sector, a gender-sensitive constitutional, legal and institutional framework, the enforcement and oversight of gender-responsive laws and policies and access to resources and education. Furthermore, women require digital inclusion, entrepreneur networks, social protection and reformed socio-cultural norms. If female entrepreneurs are empowered adequately, they would contribute to nations' human capital, economic growth and development.

The Impact of Women’s Economic Empowerment on the Rise of Female Entrepreneurship in Namibia

Abstract In this paper the authors investigate the importance of women’s economic empowerment and its impact on the rise of female entrepreneurship and human capital in Namibia. The research includes a case study analysis with four in-depth expert interviews. Data triangulation ensure the study’s validity, and the case was examined through pattern matching. The results demonstrate that female entrepreneurs face challenges such as access to resources and education, socio-cultural norms, a lack of social protection, and a large and unprotected informal sector. The government and institutions shall promote women’s empowerment through a direct labour market intervention, support for the informal sector, a gender-sensitive constitutional, legal, and institutional framework, the enforcement and oversight of gender-responsive laws and policies, and access to resources and education. Furthermore, women require digital inclusion, entrepreneur networks, social protection, and reformed socio-cultural norms. If female entrepreneurs are empowered adequately, they will contribute to nations’ human capital, economic growth, and development.

Do Labor Market Interventions Incentivize Technology Adoption? Unexpected Impacts of the World’s Largest Rural Poverty Program

Do Labor Market Interventions Incentivize Technology Adoption? Unexpected Impacts of the World’s Largest Rural Poverty Program

Soft employability skills obtained from a nongovernmental organisation’s labour market intervention

Orientation: Employability development is needed to alleviate poverty in South Africa. This study sought to examine employability development, with specific reference to soft employability skills within a low-income community in Gauteng province of South Africa.Research purpose: The purpose of this study was to determine whether the labour market intervention offered by a non-governmental organisation (NGO) in Gauteng added value to learners with specific reference to soft skills (behavioural and psychosocial) needed to become employable.Motivation for the study: Soft employability skills are essential because they are highly demanded by employers today. It is not clear whether the learners from an NGO have obtained soft employability skills (behavioural and psychosocial) during the skills training intervention.Research approach/design and method: A qualitative constructivist approach was utilised. Using purposive sampling, 33 learners from an NGO participated in email interviews. The email interviews were analysed by using four steps prescribed by grounded theory researchers.Main findings: The study results highlight two themes that represent soft employability skills, namely, soft employability behavioural skills and soft employability psychosocial skills.Practical/managerial implications: The study provides government and NGOs with an understanding of soft employability skills valued by unemployed low-income workers.Contribution/value-add: This research contributes to literature by expanding the knowledge of soft employability behavioural skills and soft employability psychosocial skills. Forgiveness seems to be a new soft employability psychosocial skill, as it was not found in the theories and frameworks used in this article.

Usluge tržišta rada

The paper analyzes labour market services, as one of the labor market interventions. Labour market services represent all activities of the public employment service and other publicly funded services for jobseekers, which include counseling the unemployed, mediation between workers and employers, informing, monitoring the unemployed and sanctioning in the case of non-compliance, and are considered to be the most cost-effective labour market intervention. Although in recent decades the main focus of labour market policy has been on measures of active labour market policy (such as training or employment incentives), in recent years, with the actualization of the activation concept, labour market services have taken their turn. This paper presents the main features, development, advantages and disadvantages of this intervention in the Republic of Croatia and the opinion of the main actors of this intervention, the Employment Advisors of the Croatian Employment Service. Key words: labour market services, counseling the unemployed, labour market, Croatia.

The impact of the school-to-work transition on self-rated health & subjective well-being in Germany

Abstract Background During the school-to-work transition (STWT), young people enter different states as vocational training, university or unemployment that may have immediate or long-term effects on health. Since research has not paid much attention to this, we investigate the development of self-rated health (SRH) and subjective well-being (SWB) during the STWT. Methods We used data from Starting Cohort 4 of the German National Educational Panel Study (NEPS), a nationally representative cohort of 11,098 ninth graders (50.5% girls) followed over nine years. Linear panel regression analysis with fixed-effects (FE) was used to explore intra-individual changes in SRH and SWB when moving between different STWT states (school, prevocational program, vocational training, university, employment, unemployment, inactivity). FE impact functions were used to compare trajectories of SRH and SWB by states reached after school-leave. Time-varying control variables were age, household composition, and residential area. Results School-leave was linked to increases in SRH and SWB, whereas no impact was found for job entry after vocational training or university. Upward transitions (e.g. from a prevocational program to vocational training, from vocational training to university or from unemployment to employment) increased SRH or SWB, while downward transitions (e.g. from vocational training or employment to unemployment) were related to decreases. Over the years after school-leave, we found a decline in SRH and SWB, which was faster in case of transitions to unemployment or prevocational programs directly after school. Conclusions Findings suggest that a smooth STWT is key for good health in youth and adulthood. Health and labour market intervention programs should focus on the time after school-leave, especially on those who are not able to find an academic or vocational training position.

Labour market policy in Italy’s recovery and resilience plan. Same old or a new departure?

ABSTRACT Liberalizing labour market reforms have topped the agenda of structural reforms implemented in Italy over the last two decades, with detrimental effects on employment quality, wage dynamics and productivity. In 2021, Italy’s then Prime Minister, Mario Draghi, promised that the investments outlined in Italy’s National Recovery and Resilience Plan (NRRP) would ‘transform Italy’s labour market’. How and to what extent does the labour market policy agenda enshrined in Italy’s NRRP deviate from the prior trajectory of policy change? What balance of economic, political and class interests does it reflect? And to what extent does it adequately tackle the long-standing challenges of Italy’s labour market? This article addresses these questions combining in-depth analysis of the labour market policy measures in Italy’s 2021 NRRP and interviews with experts and elites involved in the policy process. Contrary to claims of discontinuity, the findings highlight substantive continuity of the NRRP labour market policy agenda with the prior trajectory of liberalization. The Plan maintains a narrow focus on supply-side labour market interventions – primarily the strengthening of active labour market policies (ALMPs) – without re-regulatory interventions to tackle labour market insecurity or wage stagnation. Exogenous conditionality and domestic political dynamics that systematically advanced the preferences of employer organizations in the design of the NRRP account for the limited extent of policy change. Due to the neglect of demand-side labour market interventions and the uncertainties surrounding the implementation of the ALMP reforms, the transformatory potential of the NRRP’s labour market agenda is likely to remain limited.