Session 3. National Employment Strategies and Policies: The International Context Makiko Matsumoto Employment 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 2Component 3 Financing Implementation Financing Implementation Financing Implementation Review Dialogue 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: st_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