9th Hemispheric Meeting Poverty Reduction and Social Protection Network Employment and Labor Insertion Policies to Overcome Poverty Active Labor Market Policies and Human Capital Development The Mexico case Roberto Flores Lima September 14 th, 2007

Contents Evolution of the Active Labor Market Policies Structured Employment Management of Employment Policies and Active Labor Market Policies

Evolution of Labor Market Policies

Agreements for Stability and Growth National Productivity Program Evolution of Labor Market Policies

Agreements for Stability and Growth 1.Evolution of Labor Market Policies

Population Serviced and Placed by the National Employment Service’s Labor Pool Thousands ServicedPlaced 1.Evolution of Labor Market Policies

Labor Competence Standardization Committees Committees Labor Competence Certifying Bodies Certifying Bodies Thousands Certified Competence Units Certificates 1.Evolution of Labor Market Policies

Evolution of Labor Market Policies

2. Structured Employment Structured Subordinate Employees:  written contract;  complementary annual salary and paid vacation;  access to medical care and a 20 to 60 hour working week Structured Employers and Self-employed:  Constituted as commercial societies;  Engaged in education, health or non-profit organizations;  Engaged in independent activities and have premises and an office;  Engaged in independent activities, they have an office or study or facilities; they keep accounting books or SHCP record;  Engaged in independent activities, they do not have premises, facilities nor study, but they do keep accounting books or SHCP record

2. Structured Employment 0% 50% 100% Subordinate Employees by Economic Condition and Sex Total 34.6%32.2%33.2% Women 37.3%27.2%35.6% Men 33.0%35.4%31.6% No Structured; 2. Not Structured; 3 Intermedia te

2. Structured Employment 2005 Type of Economic Condition ManWomanTotal Structured Not structured Intermediate Total Subordinate Employees Average Income per hour Equivalent to US $ 2.9. Man-hour wages Manufacture Industry: Mexico US $ 2.7; United States US $ and France US $ Average schooling years: Structured 11.5; Not structured 7 and Intermediate 8.8

2. Structured Employment 1995 Employers and Self-employed by type of Economic Condition and Sex Not structured 71.5%83.1%76.1% Structured 27.1%16.2%22.7% MenWomenTotal Source: National Occupation and Employment Poll. STPS-INEGI

2. Structured Employment 2005 Equivalent to US$ 3.64 Average schooling years: Structured 11.2; Not Structured 6.9 años ManWomanTotal Structured Not Structured Type of economical condition Average Income per working hour Employers and Self-employed

Structured Employment Distribution curve of remunerations of employed population % REMUN

3. Management of Employment Policies and Active Labor Market Policies Policies that encourage coordinated public and private interventions, aimed at supporting gathering spaces based on markets that operate with competitive equity (reduction of credit costs; infrastructure investment; entrepreneurial regulation; reduction of the costs of setting-up and operating companies). Policies that strengthen the acquisition and production capacities of the local markets and coordinate them efficiently with external ones.

3. Management of Employment Policies and Active Labor Market Policies Security and labor regulation schemes that provide enough social support to facilitate productive restructuring that promote the use of the available resources in efficient companies, that will generate constant and paid “work”. (Exceed security only for wage-earning employment) To foster linkage-association between education and productive sectors in all education, instruction and training plans to favor: a) investment in education-instruction-training b) relevance in the education-instruction-training contents c) investment return in education-instruction-training (labor productivity- companies and people)

3. Management of Employment Policies and Active Labor Market Policies Active labor market policies are indispensable for:  succeeding in making the labor market work better and encourage equity;  contributing to make labor placement faster and pertinent;  Encouraging permanent training in the population in order to improve the productive performance of companies and people It is essential to create a new institutionality for the design, monitoring and evaluation of public policies, and to assess their impact systematically and consistently.

Thank You