Most countries implement social protection programs to help individuals manage risks such as unemployment, disability, illness, longevity or death. In many middle income countries, these are often based on a 'Bismarckian model' (named after Otto von Bismarck), where benefits are financed by contributions levied on salaried employment. In countries with a large informal sector, however, only a fraction of the population is covered by this system and non-contributory programs have been added or are planned to increase coverage. This can create distortions in the labor market, and the book is about policies to expand the coverage of social insurance programs to all workers, without reducing incentives to job creation and formal work. While few would argue against the need and social merits of social insurance and social assistance programs there are growing concerns about their unintended consequences on labor markets because of poor design. The programs can distort incentives and individual behaviors in ways that either reduce employment levels and/or promote informality, ultimately affecting productivity and economic performance. For instance, high social security contribution rates can reduce formal employment; badly designed unemployment benefits can reduce incentives to keep, search, and take jobs; and fragmented social assistance programs can become a tax on formal labor and encourage informality. The book reviews the evidence regarding the effects of social insurance and social assistance programs on labor market outcomes and discusses options to improve their design and implementation. The book focuses particularly on middle income countries in Latin America and Asia with a large informal sector and suggests ways to reduce these distortions and better manage and finance the subsidies to make coverage universal, while creating good jobs. The book compiles expert papers from the joint conferences of the World Bank (WB), the Institute for the Study of Labor (IZA) and the Inter-American Development Bank (IDB) on Employment and Development.

Tunisians are striving for the opportunity to realise their potential and aspirations in a country that is rich in both human and physical capital, but whose recent economic growth has failed to create enough opportunities in the form of good and productive jobs. This report highlights the main barriers that hinder the Tunisian labour market from providing income, protection, and prosperity to its citizens and proposes a set of labour policies that could facilitate the creation of better, more inclusive, and more productive jobs. The weak economic performance and insufficient and low-quality job creation in Tunisia is primarily the result of an economic environment permeated by distortions, barriers to competition, and excessive red tape, including in the labour market. This has resulted in the creation of a insufficient number of jobs, especially in the formal sector. To change this situation, policy makers need to address five strategic directives that can promote long-term inclusive growth and formality: foster competition; realign incentives, pay, and benefit packages in the public sector; move toward labour regulations that promote labour mobility and provide support to workers in periods of transition; enhance the productivity of informal workers through training and skills building; and reform existing social insurance systems and introduce new instruments to attain broader coverage.

Working through the Crisis documents how the Great Recession affected employment outcomes in developing countries and how those countries governments responded. The chapters comprise a unique compilation of data and analysis from different sources, including an inventory of policies implemented during the crisis, among countries in Latin America, Eastern Europe, Asia, and Africa. The effects of the crisis depended on the size of the shock, the channels through which it was manifested, the structure of institutions in the country especially labor institutions and the specific policy responses undertaken. Although these factors resulted in differing outcomes among the countries studied, common patterns emerge. In terms of impacts, overall adjustments involved reductions in earnings growth rather than in employment growth, although the quality of employment was also affected. Youth were doubly affected, being more likely to experience unemployment and reduced wages. Men seemed to have been more severely affected than women. In most countries where data are available, there were no major differences between skilled and unskilled workers or between those living in urban and rural areas. In terms of policy responses, this crisis was characterized by a high prevalence of active interventions in the labor market and the expansion of income protection systems, as well as countercyclical stimulus measures. When timed well and sufficiently large, these stimulus measures were effective in reducing adverse employment effects. Specific sectoral stimulus policies also had beneficial effects when they were well targeted. However, social protection and labor market policy responses were often ad hoc, and not in line with the types of adjustments workers experienced. As a result, these policies and programs were typically biased toward formal sector workers and did not necessarily reach those who needed them the most. In retrospect, there is a sense that developing countries were not well prepared to deal with the effects of the Great Recession, and that the further development of social protection systems is crucial to better protect workers and their families from the next crisis."

Creating jobs and increasing productivity are at the top of agenda for policymakers across the world. Knowledge accumulation and skills are recognized as central in this process. More-educated workers not only have better employment opportunities, earn more, and have more stable and rewarding jobs, but also they are more adaptable and mobile. Workers who acquire more skills also make other workers and capital more productive and, within the firm, they facilitate the adaptation, adoption, and ultimately invention of new technologies. This is crucial to enable economic diversification, productivity growth, and ultimately raise the standards of living of the population. This report brings new ideas on how to build and upgrade job relevant skills, focusing on three types of training programs relevant for individuals who are leaving the formal general schooling system or are already in the labor market: pre-employment technical and vocational education and training (TVET); on-the-job training (OJT); and training-related active labor market programs (ALMPs). Several previous studies have discussed some of the flaws in current systems and outlined options for reform. As a consequence, there has been a shift away from the investment in pre-vocational training courses to programs to improve access to and the quality of general secondary education. There have also been calls to encourage a stronger involvement of the private sector in the provision of training, together with increased emphasis in the quality and relevance of the content. One result has been a push to rethink the governance and financing arrangements of training institutions. But overall policies at these three levels of the training systems remain disconnected and there has not been an integrated framework linking them to the market and government failures that need to be addressed. This book makes two important contributions. First, it takes an in-depth look at the types of market and government failures that can result in underinvestment in training or the supply of skills that are not immediately relevant to the labor market. Second, building on the analysis of the limitations of both markets and governments and the results of case studies and recent impact evaluations, the report develops new ideas to improve the design and performance of current training systems.

Nonfinancial Defined Contribution (NDC) schemes are now in their teens. The new pension concept was born in the early 1990s, implemented from the mid-1990s in Italy, Latvia, Poland and Sweden, legislated most recently in Norway and Egypt and serves as inspiration for other reform countries. This innovative unfunded individual account scheme created high hopes at a time when the world seemed to have been locked into a stalemate between piecemeal reforms of ailing traditional defined benefit schemes and introducing pre-funded financial account schemes. The experiences and conceptual issues of NDC in its childhood were reviewed in a prior anthology (Holzmann and Palmer, 2006). This new anthology serves to review its adolescence and with the aim of contributing to a successful adulthood. To this end the book offers a deep and comprehensive review of the experience of countries where NDC schemes have been in place for a decade or more, takes stock of the discussions of the place of NDCs in the world of pension reform, and addresses in detail important issues related to implementation and design, such as the of the "NDC story", making transparent the legacy costs, financial accounting, balancing, creation of a reserve fund, gender, and longevity. The book also contains analyses of the pros and cons of NDC contra FDC and a typical paygo DB scheme in two Latin American countries. The key policy conclusions include: (i) NDC schemes work well (as documented by the experience of Italy, Latvia, Poland and Sweden during the crisis) but there is room to make them work even better; (ii) Go for an immediate transition to the new scheme to avoid future problems; (iii) Identify the legacy costs and their explicit financing during the transition as they will hit you otherwise soon; (iv) Adopt an explicit stabilising mechanism to guarantee solvency; (v) Establish a reserve fund to guarantee liquidity; (vi) Elaborate an explicit mechanism to share the systemic longevity risk; and, last but not least; (vii) Address the gender implications of NDC with deeper analysis and open political discourse.

Inequality and entrenched poverty has been decreasing in countries of Latin America and the Caribbean, due in significant part to expansion of social protection programs within the region. Innovations such as well-targeted conditional cash transfer programs and noncontributory pensions or health insurance systems have been adopted by several countries. Yet several challenges remain. The majority of informal sector workers lack access to social protection; programs tend to be fragmented and operate with little or no coordination; and redistributive arrangements are non-transparent and can distort labor markets by inducing informality, lowering labor participation, or producing longer unemployment spells. From Right to Reality: Incentives, Labor Markets, and the Challenge of Universal Social Protection in Latin America and the Caribbean addresses these challenges in a thorough yet accessible manner. Building on careful, detailed analysis of a wealth of data, this book takes stock of current social protection systems in the Latin America and the Caribbean region, highlighting their interaction with labor markets. The book presents an in-depth assessment of the main social protection programs including pensions, health, unemployment insurance, active labor market interventions, and safety net transfers. A central theme is that a well-functioning social protection system must take into account both the realities of labor markets, including high levels of informal sector employment where governments are unable to impose compulsory social insurance, and the effects of policies on the behavior of their beneficiaries, employers, and of service providers. Of interest to policy makers, academics, and practitioners, From Right to Reality presents practical recommendations to expand the coverage of social protection programs, improve their design, and create the conditions for the creation of more and better jobs.