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International Labour Organization labour market policies an introductory elaborated by Fred Fluitman Presented by Mostefa Boudiaf International Training.

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Presentation on theme: "International Labour Organization labour market policies an introductory elaborated by Fred Fluitman Presented by Mostefa Boudiaf International Training."— Presentation transcript:


2 International Labour Organization


4 labour market policies an introductory elaborated by Fred Fluitman Presented by Mostefa Boudiaf International Training Centre of the ILO Turin, Italy, 2007

5 among sources: –ILO, World Employment Report 1998/99 –Betcherman, G. An Overview of Labor Markets World- Wide: Key Trends and Major Policy Issues, World Bank, 2002 –Freeman, R.B.Labor Market Institutions and Policies: Help or Hindrance to Economic Adjustment?, 1993

6 labour market policies measures meant to address failure in labour markets, in particular measures that reduce unwanted distortions in the process of supply meeting demand.

7 labour the Oxford Dictionary: physical or mental work; exertion; toil economists: a production factor the International Labour Organisation: labour is not a commodity

8 labour force all those above a specified age, and during a specified brief period, who are either working, or available for work and seeking it also known as the economically active population

9 the currently active population labour force


11 employed wage- employed self- employed unemployed under-employed visible invisible

12 labour force: stock and flow stock 31 december 2001 stock 31 december 2002 leaving entering staying flows


14 the market


16 supply demand buy, rent borrow, hire exchange buy, rent borrow, hire supply demand allocation and price fixing

17 the vegetable market production exchange consumption sell &buy rice or potatoes supply demand

18 the housing market production exchange use sell&buy or rent a house supply demand

19 the money market production exchange use lend & borrow money supply demand

20 the labour market worker, or potential worker employer, or employment opportunity

21 the labour market production exchange use offer&hire of labour potential supply demand

22 the labour market production exchange use allocation and price fixing supply demand

23 the virtual space where, in a more or less organised manner, the demand for and the supply of all sorts of labour will meet and where wages are determined labour market

24 in free (labour) markets the forces of supply and demand are allowed to operate unhampered by government regulation or other interference; decisions by individual buyers and sellersare coordinated by movement in prices. free? market?

25 in reality, free labour markets dont exist: labour is not a commodity –people have rights competition is far from perfect –contractual relationship inherently unbalanced –considerable information problems decisions are subject to regulation –formal or informal free? market?

26 regulation different mixes of three modes of regulation: –statutory, i.e. through laws and decrees hiring, firing, job security minimum wages –voice, i.e. through collective bargaining wages and other working conditions –market-based

27 regulation opposing views on its employment outcomes: Freeman(1993): the institutionalist view the distortionist view

28 regulation the institutionalist view: regulation ensures social protection seen as instrumental in productivity growth (training, accumulating firm-specific skills) and as a means of moderating the effects of downswings in aggregate demand

29 regulation the distortionist view: institutional forms of regulation impede adjustment to economic shocks, discourage hiring, and favour insiders (regular workers, mostly prime-age males) over outsiders (e.g.women and young workers)

30 regulation at the international level the ILO Declaration on Fundamental Principles and Rights at Work (1998) freedom of association and the effective right to collective bargaining the elimination of all forms of forced or compulsory labour the effective abolition of child labour the elimination of discrimination in employment and occupation

31 industrialised country labour market

32 developing country labour market structural over-supply

33 employment in developing countries wage- employment self- employment ruralurban agriculturenon-agric. informal sector

34 factors affecting labour markets affecting both supply and demand side –failing institutions labour market information –political instability, conflict –natural disasters –health crises

35 factors affecting labour markets affecting the supply side –population growth –changes in labour force participation –migration within and between countries –the state of education and training

36 factors affecting labour markets affecting the demand side: –economic/financial crises –changes in economic structure –technological change (ICT!) proces innovation product innovation –globalisation

37 labour markets of developing countries structural over-supply of labour generally low levels of education and training significant un- and underemployment more self-employment than wage-employment large informal sector of the economy institutional forms of regulation remain modest

38 labour market policies production exchange use supply demand

39 labour market policies production e.g. investing in human resources

40 labour market policies exchange e.g. labour market information

41 labour market policies use e.g. social protection

42 active labour market programmes primary objectives: (re-) integration of the unemployed; productivity/income growth of under-employed –to increase the supply of needed skilled workers (e.g. training employed and unemployed, programmes for the disabled) –to increase the demand for workers (e.g. direct jobcreation, incentives to employers, self-employment/ SME promotion) –to improve matching workers and jobs (e.g.job search assistance, public employment services, mobility incentives)

43 passive labour market programmes primary objective: income support to the unemployed –early retirement –severance pay –unemployment insurance –unemployment assistance –public works programmes


45 globalisation trade liberalisation and export growth increase in direct foreign investment globalisation of financial markets rapid technological change information revolution

46 increasing competitiveness more flexible production systems labour market flexibilisation structural change privatisation globalisation

47 world-wide liberalisation of trade, investment and capital flows –exports world-wide are rising as a proportion of GDP –foreign direct investment flows have also risen sharply –growth of global production systems, incl. intra-firm trade in intermediate products, subcontracting, licensing, franchising, and out-sourcing arrangements across national frontiers –huge growth in volume of international trading in foreign exchange, bonds and equities, and new financial instruments globalisation

48 With a view to maintaining competitiveness in international markets and to safeguard their balance of payments, Governments are under pressure to get their macro-economic policies right, to minimise market distortions, and to improve allocative efficiency. globalisation

49 Hence, the widespread trend towards smaller government, including lower expenditure and taxes, reduced political support for redistributive measures, and deregulation of markets, including labour markets. globalisation

50 At the same time, the pace of technological change and product obsolescence has increased, as enterprises try to keep one step ahead of their competitors at home and abroad. The aim is for flexible production systems: globalisation

51 flexible automation, lean production, just in time delivery, total quality management, and flexible work forces globalisation

52 labour market segmentation demand supply demand supply

53 labour market segmentation men women

54 labour market segmentation urban rural

55 labour market segmentation informal formal

56 labour market segmentation northeastsouthwest

57 labour market segmentation mining agriculture manufacturing commerce services other than commerce

58 labour market segmentation professional workers and managers technicians and other skilled workers semi-skilled workers unskilled workers

59 labour market indicators population and labour force growth labour force participation rates education levels per capita income data income distribution data

60 labour market indicators employment and unemployment data wages and earnings data output growth data labour productivity data employment elasticities

61 employment policies an introductory presentation by Fred Fluitman International Training Centre of the ILO Turin, Italy, 2002

62 employment policies according to the ILO (C122): all measures aimed, directly or indirectly, at promoting full, productive and freely chosen employment for women and men

63 such as policies which contribute to: –sustainable economic growth –an equitable distribution of income –employment-intensive investment –equal opportunities for all –a healthier labour force –greater employability and adaptability –enhanced entrepreneurship –the better functioning of labour markets –………………….

64 the European Employment Guidelines call for concrete and urgent action along four lines: –employability –entrepreneurship –adaptability –equal opportunities e.g. in the European Union:

65 employability making sure that people can develop the right skills to take up job opportunities in a fast changing world –active measures, e.g. training, as soon as possible after becoming unemployed –special help for groups facing the greatest difficulties in getting work, e.g.disabled people –targets for life-long learning opportunities

66 entrepreneurship making it easier to start and run a business and to employ people in it –reforms in tax systems –cutting red tape –training for small enterprises

67 adaptability developing new flexible ways of working to reconcile security and flexibility –new forms of employment and innovative ways of work organisation –making it easier and cheaper for companies to invest in training for their staff

68 equal opportunities equal access to jobs for women and men, equal treatment at work –the same training and support opportunities for women and men to participate in the labour market on an equal footing –active policies making it less difficult to combine working life with family responsibilities, and to return to the labour force after a long absence

69 employment and development

70 employment and poverty

71 the problem of poverty in developing countries is largely an employment problem: that of the working poor

72 no work means no income, means poverty

73 not enough work means not enough income, means poverty

74 low productivity means low income, means poverty

75 reducing poverty means: achieving growth in output, by increasing both the quantity and the quality of labour inputs

76 reducing poverty means: achieving growth in output, by creating additional jobs and raising productivity

77 O =+ O E E increasing productive employment for women and men

78 more output more and better jobs more productive workers pertinent policies:

79 fiscal and monetary reform removing trade restrictions broadening access to credit as well as access to technology investing in infrastructure more output

80 promoting the use of efficient, yet employment-intensive techniques reallocating investment in favour of labour-absorbing sectors targeting the disadvantaged improving conditions for small and micro-enterprises more and better jobs

81 education and training heath and nutrition appropriate technology safety at work more productive workers

82 the roots of poverty lacking sufficient (labour) income lacking assets (valuable possessions) inequality, discrimination lacking a voice, lacking power adverse shocks lacking social protection

83 reducing poverty as summed up by the ILO: by promoting decent work: –productive employment for all –respect for fundamental rights at work –social protection –social dialogue

84 reducing poverty creating an appropriate climate –peace and stability –social dialogue taking pertinent policy decisions –sufficient homework –a comprehensive, coherent, integrated approach –political will and implementation capacity

85 addressing employment and income –achieving high rates of sustainable growth –ensuring that growth is employment-intensive without sacrificing productivity and efficiency –providing the poor greater access to employment –doing away with discrimination at work –raising productivity (income) of the working poor in particular by addressing their (lack of) assets –increasing terms of trade for what the poor produce reducing poverty

86 addressing assets –addressing asset inequalities, access to assets –boosting human capital: health, education,... –investing in physical capital, infrastructure, …. –caring for natural assets: land, water, ….. –allowing social assets to develop: networks,... –broadening access to financial assets: credit,...

87 reducing poverty empowering the working poor –respecting human rights and core labour standards giving people a voice –boosting representation and social dialogue –providing for effective decentralisation increasing social protection –extending insuranceschemes –putting safety nets in place

88 employment policies

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