Session 3. National Employment Strategies and

Policies:The International Context

Makiko MatsumotoEmployment Strategy Department, ILO

25 May 2004, Turin

Outline

Motivation

ILO instruments

Key components of National Employment Policy (NEP)

Why Employment Policy?

Answer determines the functional role to be given to a national employment policy

General economic policies may not be sufficient in addressing employment concerns

Over time, provide coherence and balance to various measures and programmes/projects related to labour market

Motivations and justifications: economic, social and political

Monitoring labour market situations for identifying areas of policy interventions and adjustments

Employment Policy Convention (C122)

ILO Global Employment Agenda (GEA)

Key ILO Instruments

Convention 122 (1964)

Objective:

An employment policy to stimulate economic growth and development, based on full, productive and freely chosen employment• Work for all

• Productive work

• Freedom of choice of employment

Convention 122 (cont.)

Adaptation of national employment policy to:• The level of economic development

• Coordination of objectives: employment and other socio-economic

Participation of employers, workers and the persons affected during policy formulation and implementation

ILO Global Employment Agenda

Approved by GB in March 2003 Objectives:

• Quantity and quality of employment

• Better functioning labour markets

Approach: demand and supply side Identification of policy-specific areas of

intervention : 10 core elements

ILO GEA : The Structure 1 Enhancing demand for employment through

stimulation of the economy:

• Trade and investment

• Technological change

• Sustainable development

• Macroeconomic policy

ILO GEA : The Structure 2

Addressing the supply side of employment:• Entrepreneurship

• Knowledge and skills development

• Active labour market policies

• Social protection

• Occupational safety and health

• Productive employment for poverty reduction

ILO GEA : The Structure 3

Cross-cutting issues:

• Social dialogue

• Non-discrimination – ethnicity, race, gender, age

ILO GEA : Implementation

3 levels:

• National – national employment plans

• Regional – meeting regional strength, comparative advantages and needs

• Global – international policy coordination and alliance building

ILO Instruments - Implications Priority identification: adaptation of general

guidelines on employment policies to specific national socio-economic and policy environment

Policy mix needs to address both demand and supply side of the labour market – this will require inter-ministerial cooperation

Stake-holder dialogue and participation is the key to policy process in formulation and implementation

Components of NEP: The Minimum Set

National priorities

Policy objectives

Component 1

LMI and analysis

Component 2 Component 3

FinancingImplementation

FinancingImplementation

FinancingImplementation

ReviewDialogue

0.5, 1, 2 years

Components of NEP: The Minimum Set Objectives and priorities : long and short-term, clarity

and feasibility Simple situational analysis : labour market

information Policy scopes and proposed policy reform

components: coherence, action-oriented clarity, relevance and feasibility

Review: assessment method and frequency Financing Continuous dialogue with social partners and key

stakeholders from the initial formulation stage to implementation

Objectives of EP: Examples European Employment Strategy

• Launched in Luxembourg Jobs Summit in Nov 1997:• High level of employment (equally important as growth

and stability)

• To achieve decisive progress in employment promotion within 5 years

• New goal set in Lisbon Economic Council Mar 2000:• EU to become the most competitive and dynamic

knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010

• Targets: Employment rate should reach 70%, at least 60% for women and 50% for older workers by 2010

Analysis & monitoring: Example

EU Employment Strategy guideline for monitoring indicators, for instance:• Unemployment and employment rates, including long-

term unemployment

• Growth in labour productivity

• Enterprise birth

• Employment growth,

• Etc.

• Reference: http://europa.eu.int/comm/employment_social/employment_strategy/indic/list_from_compendium_jer2002.pdf

Policy Scopes of NEP:Examples and lessons

In Europe, including the EU accession countries and others wishing to join the EU, main issues addressed by the NEPs tended to be:• Focus on the supply side measures, with more focus

on education and training of youth. Adult training underdeveloped in a number of countries

• Labour market flexibility and employment secuirty dilemma

• Trend towards activation of labour market policy (but large differences exist across countries)

Policy Scopes of NEP:Examples and lessons (cont.)

• Special programmes for disadvantaged groups (youth, elderly, women, disabled persons, ethnic minorities)

• Employment and social policy not always well coordinated

• Promotion of entrepreneurship needs improvement

• Employment promotion and wage bargaining working well in some countries

• Stimulation of job creation through economic incentives (special economic zones)

Review: Example

EU Employment Strategy

• Country review and assessment of progress of National Action Plans on employment, monitoring indicators

• Peer reviews – identification and exchange of good practices and potential for transfer in other countries

• Frequency of review: in line with policy life cycle, financing and capacity availability.

Financing: Example

In many European NEPs, for each proposed policy measures, financing means and implementation units are identified.

Examples of financing means:• State budget

• Savings arising from proposed policy changes

• Collaboration of budget with other ministries co-responsible for implementation

NEP:Some lessons and challenges Lack of coordination between economic and employment

policy Weak labour demand due to low economic growth, low

employment-intensity of growth, obstacles to good enterprise development (particularly SMEs), low pace of restructuring of SOEs

Education and training policies not fully in compliance with labour market needs

Labour market institutions and policies severely underdeveloped

Weak social protection systems, covering only parts of population

Social dialogue often underdeveloped and contributing little to good employment policy formulation and implementation