What can be done to create more and better jobs in Europe and Central Asia? And should there be specific policies to help workers access those jobs? The authors of this book examine these questions through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others. The authors find the following: Market reforms pay off, albeit with a lag, in terms of jobs and productivity. A small fraction of superstar high-growth firms accounts for most of the new jobs created in the region. Skills gaps hinder employment prospects, especially of youth and older workers, because of the inadequate response by the education and training systems to changes in the demand for skills. Employment is hindered by high implicit taxes on formal work and barriers that affect especially women, minorities, youth, and older workers. Low internal labor mobility prevents labor relocation to places with greater job creation potential. Back to Work: Growing with Jobs in Europe and Central Asia asserts that to get more people back to work and to grow with jobs, countries, especially late reformers, need to regain the momentum for economic and institutional reforms that existed before the economic crisis. They should lay the fundamentals to create jobs for all workers, by pushing reforms to create the enabling environment for existing firms to grow, become more productive, or exit the market and let new firms emerge and succeed (or fail fast and cheap). They should also implement policies to support workers so that those workers are prepared to take on the new jobs being created, by having the right skills and incentives, unhindered access to work, and being ready to relocate.
Portraits of Labor Market Exclusion presents "profiles" or "portraits" of individuals who have limited labor-market attachment. It is widely accepted that those with limited attachment to the labor market are a highly heterogeneous group (including, for instance, recent job losers, long-term unemployed, school leavers with no labor-market experience, those close to retirement age, or people with caring responsibilities), and that understanding their circumstances and potential barriers is an essential prerequisite for designing and implementing a tailored and effective mix of policy support and incentives. The report takes a comprehensive view, focusing on both the labor market attachment of a country's out-of-work population and the social assistance package and poverty profile of the same segment of the population. In essence, the report looks at individuals through the lenses of both poverty/welfare status and labor market indicators, and, in doing so, the portraits helps move the dialogue from a purely labor market-centric view to a broader dialogue that includes social policy as a whole. This is an important shift; for instance, social protection programs, such as family benefits and maternity benefits, and broader social policy issues such as retirement ages, often have a great impact on who remains inactive. Specifically, the report presents portraits of the out-of-work population of six countries (Bulgaria, Estonia, Greece, Hungary, Lithuania and Romania) in terms of distance from the labor market, human capital, and labor supply conditions, as well as demographic conditions. The analysis relies on the European Union Statistics of Income and Living Conditions (EU-SILC) surveys for the years 2007 to 2011. Latent class analysis methodology allows multidimensional profiling of the out-of-work population, and identifies classes or groups of out-of-work individuals that are as homogeneous as possible within each class according to a set of observable characteristics, and as distant as possible between classes. Consequently, this analysis provide a much richer glimpse of the very different barriers to labor market integration that these various groups experience, considerably augmenting the limited amount of information contained in traditional descriptive statistics.
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