Syndicate content

Tackling unemployment with know-how from Down Under

Rene Leon Solano's picture
It was a cold and rainy afternoon in Tunisia in February of 2011.  My colleagues and I were on mission, driving from the Ministry of Employment to our next meeting. We got stuck! The street was blocked with hundreds of youth chanting “A'mal” (“work” in Arabic). They were outside one of the biggest public employment offices in Tunis demanding work, often violently.

World Bank | Arne HoelThe sad irony is that statistics from Tunisia’s public employment agency (ANETI) show that approximately 30 percent of the vacancies that it posted last year were not filled. How can this be true with hundreds of job seekers in the streets demanding jobs?  It could be due to skills mismatches; however, more research is needed.  We do know that public employment offices in the Middle East and North Africa (MENA) region lack the capacity to deliver employment services in an effective and efficient manner. Improving the delivery of public employment services will not guarantee a job for one of those youth chanting “3amal,” but it can certainly increase his or her chances of employment.

In an effort to expose government officials from the MENA region to international best practices on the delivery of public employment services, the World Bank organized a study tour in June 2011 to the United Kingdom’s Jobcentre Plus. Jobcentre Plus is a one-stop shop where job seekers can access a variety of services in a single place, thus reducing transaction and administrative costs, improving service delivery, and facilitating program monitoring and evaluation. In addition, Jobcentre Plus refers the hardest-to-place job seekers, or approximately 10 percent of the total registered unemployed, to private providers. These providers are paid a standard service fee plus a bonus for results (job outcome and sustainability).

“We learned a lot. We are thinking about adapting certain aspects of the system to improve the delivery of public employment services in our country,” replied a Senior Official from Morocco’s Ministry of Employment, when asked what he thought about the study tour. However, he explained that, unlike Jobcentre Plus, “(They) do not have the financial or the administrative capacity to provide most of the registered unemployed with counselling and job search assistance as well as manage benefits.” He could not be more right! Morocco’s caseload, or the number of registered unemployed divided by the total number of counselors at its public employment agency, is 15 times higher than that of the United Kingdom. Unfortunately, poor administrative capacity is a common feature of all public employment agencies in MENA.

So which other system for delivering public employment services might be more relevant to circumstances in MENA countries? The Nordic or the French model? Not at all! These countries, unlike those in MENA, spend up to five percent of their GDPs in the delivery of public employment services, all of which are provided exclusively by public employment agencies. In fact, Nordic countries are in the middle of reforming their own labor market policies, to involve private providers in the delivery of public employment services.

According to a recent Organization for Economic Cooperation and Development (OECD) report, Australia’s system for delivering employment services, Job Services Australia, may have contributed to the strong performance of the country’s labour market. Since 2009, Australia has had the highest employment rate among G7 and OECD G20 countries. Job Services Australia is the pioneer of results-based contracting for the delivery of employment services. It also features a one-stop shop, but unlike Jobcentre Plus, it refers all the registered unemployed to for-profit and non-profit providers, which participate in a competitive call for proposals and are awarded contracts that pay a standard service fee plus a bonus both for results and for serving the hardest-to-place job seekers.

Do MENA countries have the kind of well-developed network of private employment services providers that would be required under the Australian system? At present, it would appear not. However, given the region’s political economy and the weak administrative capacity of its public employment agencies, it does seem an opportune moment to develop one.  Developing the capacity of private employment services providers as well as putting in place systems and procedures to help governments in MENA manage this kind of system is a more realistic and quicker way of improving the delivery of public employment services in the short-run. Of course, in the long-run, a comprehensive public sector reform will be needed.

The MENA Community of Practice on employment and social safety nets will look into promoting exchanges and cooperation between MENA countries and “’Down Under” in the months to come. These interactions will not only expose MENA countries to a successful employment service delivery system, and one perhaps more relevant to their circumstances, but also to a range of international best practices of monitoring and evaluation and Immigration services, both of which are important for MENA countries as they look for ways to improve the governance and efficiency of their labor markets.

Comments

Submitted by Dug-ho Kim on
I have worked for the Ministry of Employment and Labor for 20 years. Since financial crisis of 1997, the Korean labor market has faced overwhelming challenges: more trouble in the economic activity participation of female and youth, the labor market duality, skills mismatch, and rapid aging, so on. To tackle the issues, the government has promoted further the role and functions of employment center with the enrichment of active and passive labor market programs.

In 1999, for instance, 122 Employment Centers based on the concept of one-stop service, providing from unemployment benefits to job intermediation was set up all cross the country, and the number of job counselors increased from 141 in 1997 to 2,556 in 2009 December.

To do so, the government introduced Employment Insurance (EI). All expenditure for the Center are financed through the EI funded by payroll taxes contributed by employers. While contributions to the employment security and vocational traning components are borne only by the employrs, half of the unemployment benefits contribution is paid by employees.

Despite the expansion of infrastructure, staff caseload in the PES of Korea is higher than that of some other OECD countries. So, Korea has set up three main networks based on the Internet: (1) Work-Net managing information of job seekers and employers on their profiles and needs; (2) HRD-Net managing data on the provision of training for employed workers and the unemployed; (3) EI database keeping track of individuals and firm's information on their insurance contribution, coverage, benefits, and training record. In 2007, these networks have been finally integrated under a single Labor Market Information Analysis System (LaMAS) to provide more customized benefits and service to the beneficiaries, to facilitate labor market analysis, and to support based and informed decision making for policy makers.

Three decades ago, Korea was one of developing countries which receive funding from the WB. I think there might be lessons from Korea.

Add new comment