rethinking our current approach: starting with the problem

21
Rethinking our Current Approach: Starting with the Problem Wendy Cunningham & Laura Sanchez Puerta Skills & Employability for the 21 st Century Workshop World Bank June 8, 2009

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Wendy Cunningham & Laura Sanchez Puerta Skills & Employability for the 21 st Century Workshop World Bank June 8, 2009. Rethinking our Current Approach: Starting with the Problem. Challenge. Assist clients to improve - PowerPoint PPT Presentation

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Page 1: Rethinking our Current Approach: Starting with the Problem

Rethinking our Current Approach: Starting with the Problem

Wendy Cunningham & Laura Sanchez PuertaSkills & Employability for the 21st Century WorkshopWorld BankJune 8, 2009

Page 2: Rethinking our Current Approach: Starting with the Problem

Challenge

Assist clients to improve Employability: a person’s ability to get and

keep a job (employment or entrepreneurship) Efficiency in job matches: workers find high

quality jobs conditional on internal and external factors

Two questions What are the constraints (to employability/

efficiency)? What are the interventions to address these

constraints?

Page 3: Rethinking our Current Approach: Starting with the Problem

Assumptions for this presentation Take as given

Macroenvironment Investment Climate Labor Regulation Formal Education System

Focus on programs/interventions Methodology: evolving constraints-

incentives framework, applied in LAC and Africa

Page 4: Rethinking our Current Approach: Starting with the Problem

A bit of search theory

Has in mind a job & wage he is willing

to acceptHas a set of skills

Has in mind a set of skills she needs

Has in mind a wage, she is willing to offer

4

Page 5: Rethinking our Current Approach: Starting with the Problem

A bit of search theory

Has in mind a job & wage he is willing

to acceptHas a set of skills

Has in mind a set of skills she needs

Has in mind a wage, she is willing to offer

5

Page 6: Rethinking our Current Approach: Starting with the Problem

Where is the breakdown?

Propose 5 categories of constraints to market clearing

Page 7: Rethinking our Current Approach: Starting with the Problem

I. Skills Mismatch constraintsIs the missing factor Technical skills General skills Life skills

Caribbean: Employers’ assessment of most desired skill set

45%

47%

68%

77%

79%

82%

86%

86%

0% 20% 40% 60% 80% 100%

Computer skills

Dependability

Taking individual responsibility

The ability to work well on teams

Communication skills

Problem solving / efficiency

Work ethic

Honesty/integrity

Source: Blom and Hobbs( 2007)

Constraints Intervention

Page 8: Rethinking our Current Approach: Starting with the Problem

I. Skills Mismatch constraintsIs the missing factor Technical skills General skills Life skills

Demand-driven, comprehensive voctec+life skills+internship training programs

Information on returns to skill investments

2nd chance education programs

Caribbean: Employers’ assessment of most desired skill set

45%

47%

68%

77%

79%

82%

86%

86%

0% 20% 40% 60% 80% 100%

Computer skills

Dependability

Taking individual responsibility

The ability to work well on teams

Communication skills

Problem solving / efficiency

Work ethic

Honesty/integrity

Source: Blom and Hobbs( 2007)

Constraints Intervention

Page 9: Rethinking our Current Approach: Starting with the Problem

II. Job Matching constraints

Many workers use informal mechanisms to find jobs (Peru)

asked an employer

em-ploy-ment agencyasked

friendwant ads

Source: Cunningham et. al. 2008.

Constraints Intervention

Page 10: Rethinking our Current Approach: Starting with the Problem

II. Job Matching constraintsMore importantly (?) many

employers use informal employee search mechanisms (Sierra Leone)

frien

ds

emplo

ymen

t age

ncy

want a

ds

emplo

yers/

ees

walk-in

s0

20

40

60

Source: Peeters, et. al. 2009

Constraint Intervention

Page 11: Rethinking our Current Approach: Starting with the Problem

II. Job Matching constraintsMore importantly (?) many

employers use informal employee search mechanisms (Sierra Leone)

Employment offices with social workers (for both clients)

Web-based job information boards

frien

ds

emplo

ymen

t age

ncy

want a

ds

emplo

yers/

ees

walk-in

s0

20

40

60

Source: Peeters, et. al. 2009

Constraints Intervention

Page 12: Rethinking our Current Approach: Starting with the Problem

III. Signaling Skills to the LM It is costly to hire workers

(because it is costly to fire them)

Few good ways to signal skills School certificate Held a previous job

Constraints Intervention

Page 13: Rethinking our Current Approach: Starting with the Problem

III. Signaling Skills to the LM It is costly to hire workers

(because it is costly to fire them)

Few good ways to signal skills School certificate Held a previous job

Skills certification/ Skills Qualifications Framework

Training center accreditation

Constraints Intervention

Page 14: Rethinking our Current Approach: Starting with the Problem

IV. Capital Constraints

Constraints to starting a business? Financial capital Social capital Human capital

Constraints Intervention

Page 15: Rethinking our Current Approach: Starting with the Problem

IV. Capital ConstraintsConstraints to starting a

business? Financial capital Social capital Human capital

Micro-finance

Entrepreneurship mentoring

Entrepreneurship training

Bundled?

Constraints Intervention

0

10

20

30

40

50

60

70

15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69

Formal Informal Self employed Unpaid

Share of each age group in each sector, 1st quintile (Brazil)

Source: Cunningham, et. al. 2008

Page 16: Rethinking our Current Approach: Starting with the Problem

V. Insufficient Labor Demand No growth/restrictive labor

legislation Too costly to hire

Constraints Intervention

Page 17: Rethinking our Current Approach: Starting with the Problem

V. Insufficient Labor Demand No growth/restrictive labor

legislation Too costly to hire

Public works/service + training (SR)

Wage subsidy for low productivity workers

Constraints Intervention

Page 18: Rethinking our Current Approach: Starting with the Problem

Pulling it all together: Evidence-based ALMP in response to employment barriers

Constraint ALMP with some evidenceTechnical , General, Life skills mismatch

Job training+, life skills, information about returns to skill investments

Poor matching Employment offices

Poor signaling Skills certification, training program accreditation

Lack of entrepreneurial capital (skills, social, $)

Mentoring, entrep training, micro-finance

Insufficient labor demand Public works/service, wage subsidies

18

Page 19: Rethinking our Current Approach: Starting with the Problem

Conclusions & Next Steps We can conclude

Many different constraints may interrupt the job match process

Probably more than one constraint at play in any country/for any target group … what are they?

We have some ideas about interventions Moving forward

Develop diagnostic tools & identify the constraints that are most important in specific contexts

Continue to build the knowledge base of effective interventions

Page 20: Rethinking our Current Approach: Starting with the Problem

We welcome your feedback When applying the framework to

your region Are there constraints that we missed? Is there diagnostic literature that we

missed? Are there interventions that we should

be aware of?

Wendy: [email protected]

Laura: [email protected]

Page 21: Rethinking our Current Approach: Starting with the Problem

References Betcherman, Gordon, Martin Godfrey, Susana Puerto, Friederike Rother, and Antoneta

Stavreska “A Review of Interventions to Support Young Workers: Findings of the Youth Employment Inventory” SP Discussion Paper #715 (World Bank)

Blom and Hobbs( 2007) School and Work in the Eastern Caribbean: Does the Education System Adequately Prepare Youth for the Global Economy? (World Bank: Washington, DC)

Cunningham, Wendy, Lorena Cohan, Sophie Naudeau, and Linda McGinnis. 2008. Supporting Youth at-Risk: A Policy Toolkit for Middle-Income Countries (World Bank)

Cunningham, Wendy, Linda McGinnis, Rodrigo Garcia-Verdu, Cornelia Tesliuc, and Dorte Verner (2008) Youth at-Risk in Latin America and the Caribbean: Understand the Causes, Realizing the Potential (World Bank: Washington, DC).

Peeters, Pia, Wendy Cunningham, Arvil van Adams, and Gayatri Acharya (2009) Youth Employment in Sierra Leone: Sustainable Livelihood Opportunities in a Post-Conflict Setting (World Bank: Washington, DC)

Puerto, Olga (2007). “Learning from International Experience: The Youth Employment Inventory” (World Bank: Washington, DC)

Sanchez Puerta, Laura. 2008. “Managing Labor Market Risks and Creating Better Jobs: Alternative Designs for Income Protection and Active Labor Market Policies” (manuscript)

Katz, Elizabeth. 2008. “Programs Promoting Young Women’s Employment: What Works?” http://siteresources.worldbank.org/INTGENDER/Resources/GenderYouthEmploymentKatz.pdf