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Labor and Social Protection

The unfinished business of pension reform in Moldova

Yuliya Smolyar's picture
Costesti village, central Moldova. Photo by Elena Prodan / World Bank

In the early to mid-1990s, the Moldovan Government often didn’t pay pensions on time – sometimes they were up to two years late. And, they were often paid in-kind. This situation was a syndrome of the trials and tribulations that the country was experiencing in its tumultuous transition to a market economy.
 
Reform of the pension system was initiated in the late ‘90s to try to fix some of the more pressing challenges by restoring fiscal balance and helping put payments on a sustainable track – essentially meaning that payments were now made in cash, rather than in galoshes or umbrellas.
 
Similar to Moldova’s protracted transition to a free market, however, the reform of the country’s pension system is largely a story of “unfinished business”. One important reason for this is that the 1998 pension reform envisaged a phased increase in the retirement age up to 65 years for both men and women, and clear linkages between salary contributions and pension payments. This aimed to motivate Moldovans to participate in the system, but after a few years of implementation, the gradual increase in retirement age was put on hold. And, because the retirement age didn’t increase, the planned increase in the value of pensions was put on hold too.

The consequences of banning child labor

Caio Piza's picture
From a normative perspective, we can all agree that child labor is reprehensible and should be banned, particularly in its worst forms. According to the International Labor Organization (ILO), child labor has declined worldwide in the last fifteen years, but the numbers are still alarming. In 2012, 168 million children were a part of child labor with more than half of these kids involved in hazardous work.  

Finding employment for young people of all abilities

Matt Hobson's picture
Young women from family with members with disabilities being taught to use a sewing machine.
India. Photo: © John Isaac / World Bank

Today is the International Day of Persons with Disabilities.
 
In every society globally, unemployment rates for persons with disabilities are higher than for people without disabilities. The International Labor Organization reports that, in some Asia-Pacific countries, the unemployment rate of people living with disabilities is over 80%. 

Including persons with disabilities into development: the way forward

Ede Ijjasz-Vasquez's picture
An estimated 15% of the global population, or about 1 billion people, experience some form of disability. Persons with disabilities face many barriers in access to employment, education, services, and are disproportionately affected by poverty. Making sure that everyone can reap the benefits of development, including persons with disabilities, is at the core of the World Bank's mission. On this International Day of Persons with Disabilities, Charlotte McClain-Nhlapo, the World Bank's Global Advisor on Disability, shares insights about current challenges and opportunities for disability-inclusive development, and explains how the institution has been integrating disability into its operations.

Socializing with friends at work: A look into the black box of non-cognitive skills: Guest post by Sangyoon Park

This is the fifth in our series of posts by students on the job market this year.
 
Do people perform better when working with friends or do their friends distract them from doing their job well? Does the effect depend on their personality traits? I investigate these questions in the context of a seafood-processing plant in Vietnam in which several workers perform the identical task – cleaning and filleting fish -- at 4-person tables in a processing room. I collaborated with the management to design and implement a field experiment in which employees were randomly assigned to positions within the room each day. I use random variation in a worker’s proximity to friends to estimate the effect of working with friends on job performance. Before the experiment, I administered a baseline survey to collect information on employees’ friendship ties and personality characteristics. I find that employees are less productive when working with friends but only when friends are close enough to socialize with each other. I also find that personality traits matter and explain a significant portion of individual differences in socializing behaviors at work. Conversely, socializing with friends explains a large portion of why workers with certain personality traits – notably, conscientiousness – are more productive workers.

The resilient brain and its crucial role in human development

Dorota Chapko's picture
Young children in Uzbekistan play with mind-stimulating games. Photo: Matluba Mukhamedova / World Bank


​Did you know that investments in early childhood are crucial for achieving the brain’s full developmental potential and resilience?
 
Jim Heckman, Nobel Laureate in economics, and his collaborators have shown that strong foundational skills built in early childhood are crucial for socio-economic success. These foundational skills lead to a self-reinforcing motivation to learn so that “skills beget skills”. This leads to better-paying jobs, healthier lifestyle choices, greater social participation, and more productive societies. Growing research also reveals that these benefits are linked to the important role that early foundations of cognitive and socio-emotional abilities play on healthy brain development across the human lifespan.

Brain complexity –the diversity and complexity of neural pathways and networks— is moulded during childhood and has a lasting impact on the development of cognitive and socio-emotional human abilities.

Does emigration really increase the wages of non-emigrants?

Alessio Brown's picture

Although immigration and its effect on labor markets in receiving countries is a frequent focus of research and public concern, there is less known about the impact of emigration on sending countries. Yet, as Benjamin Elsner explains in his recent study for IZA World of Labor, emigration actually has positive and large effects on wages in sending countries. 

Does competition create or kill jobs?

Klaus Tilmes's picture

Greater competition is crucial for creating better jobs, although there may be short term tradeoffs.

Job creation on a massive scale is crucial for sustainably ending extreme poverty and building shared prosperity in every economy. And robust and competitive markets are crucial for creating jobs. Yet the question of whether competition boosts or destroys jobs is one that policymakers often shy away from.

It was thus valuable to have that question as a central point of discussion for competition authorities and policymakers from almost 100 countries – from both developed and developing economies – who recently gathered in Paris for the 14th OECD Global Forum on Competition (GFC).

According to World Bank Group estimates the global economy must create 600 million new jobs by the year 2027 – with 90 percent of those jobs being created in the private sector – just to hold employment rates constant, given current demographic trends.
Yet the need goes further than simply the creation of jobs: to promote shared prosperity, one of the urgent priorities – for economies large and small – is the creation of better jobs. This is where competition policy can play a critical role.
 
Competition helps drive labor toward more productive employment: first, by improving firm-level productivity, and second, by driving the allocation of labor to more productive firms within an industry.
 
Moreover: Making markets more open to foreign competition drives labor to sectors with higher productivity – or, at least, with higher productivity growth. Making jobs more productive, in turn, generally increases the wages they command.
 
That’s in addition to cross-country evidence on the impact of competition policy on the growth of Total Factor Productivity and GDP, and the fact that growth tends not to occur without creating jobs. Thus there’s compelling evidence that – far from being a job killer, as skeptics might fear – competition (over the long term) has the potential to create both more jobs and better jobs.



The key question then becomes whether such long-term benefits must be achieved at the expense of short-term negative shocks to employment – especially in sectors of the economy that may experience sudden increases in the level of competition.
 
Progress toward better jobs is driven partly by the disappearance of low-productivity jobs, as well as the creation of more productive jobs in the short run. Competition encourages that dynamic through firm entry and exit, along with a reduction in “labor hoarding” in firms that have previously enjoyed strong market power.
 

Cities: The new frontier of social protection

Keith Hansen's picture
photo: Dominic Chavez/World Bank

​Consider this: By the time you had breakfast this morning, the world’s urban population grew by some 15,000 people. This number will increase to 180,000 people by the end of the day and to 1.3 million by the end of the week. On a planet with such a vast amount of space, this pace of urbanization is like crowding all of humanity into a country the size of France.

Cities are where most of the world’s population lives, where more and more of population growth will occur, and where most poverty will soon be located. 

But why do so many people choose cities? Poor people constantly pour into Rio de Janeiro and Nairobi and Mumbai in search of something better. The poorest people who come to cities from other places aren’t irrational or mistaken. They flock to urban areas because cities offer advantages they couldn’t find elsewhere.  The poverty rate among recent arrivals to big cities is higher than the poverty rate of long-term residents, which suggests that, over time, city dwellers’ fortunes can improve considerably.

Madagascar: Expanding the bandwidth of the extreme poor

Andrea Vermehren's picture
​Photo: Laura B. Rawlings / World Bank


It is 8 AM. The winter sun begins to appear over the gray-green mass of trees above the village of Tritriva in Madagascar’s central highlands. The courtyard of a stone church is already filled with women, many holding still-sleeping children in their arms. They have assembled for the first time in two months to receive a cash payment from the Malagasy state.

The women are poor and all live on less than $2 per day. The money they receive from the government amounts to about a third of their cash income for the two months in between each payment: it will go a long way in helping them support their families for the rest of the winter.
 
Initiated by the Madagascar government,  with support from the World Bank, the payments are part of a new program implemented by the Fonds d'Intervention pour le Développement (FID) to combat poverty in rural Madagascar and provide sustainable pathways to human development.


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