Wendy Cunningham & Laura Sanchez Puerta Skills & Employability for the 21 st Century Workshop World Bank June 8, 2009

 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?

 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

Has in mind a job & wage he is willing to accept Has a set of skills Has in mind a set of skills she needs Has in mind a wage, she is willing to offer 4

Has in mind a job & wage he is willing to accept Has a set of skills Has in mind a set of skills she needs Has in mind a wage, she is willing to offer 5

Propose 5 categories of constraints to market clearing

Is the missing factor  Technical skills  General skills  Life skills Caribbean: Employers’ assessment of most desired skill set Source: Blom and Hobbs( 2007) ConstraintsIntervention

Is the missing factor  Technical skills  General skills  Life skills Demand-driven, comprehensive voctec+life skills+internship training programs Information on returns to skill investments  2 nd chance education programs Caribbean: Employers’ assessment of most desired skill set Source: Blom and Hobbs( 2007) ConstraintsIntervention

Many workers use informal mechanisms to find jobs (Peru) Source: Cunningham et. al ConstraintsIntervention

More importantly (?) many employers use informal employee search mechanisms (Sierra Leone) Source: Peeters, et. al ConstraintIntervention

More importantly (?) many employers use informal employee search mechanisms (Sierra Leone) Employment offices with social workers (for both clients)  Web-based job information boards Source: Peeters, et. al ConstraintsIntervention

 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 ConstraintsIntervention

 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 ConstraintsIntervention

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

Constraints to starting a business?  Financial capital  Social capital  Human capital  Micro-finance  Entrepreneurship mentoring  Entrepreneurship training  Bundled? ConstraintsIntervention Share of each age group in each sector, 1 st quintile (Brazil) Source: Cunningham, et. al. 2008

 No growth/restrictive labor legislation  Too costly to hire ConstraintsIntervention

 No growth/restrictive labor legislation  Too costly to hire  Public works/service + training (SR)  Wage subsidy for low productivity workers ConstraintsIntervention

ConstraintALMP with some evidence Technical, General, Life skills mismatch Job training+, life skills, information about returns to skill investments Poor matchingEmployment offices Poor signalingSkills certification, training program accreditation Lack of entrepreneurial capital (skills, social, $) Mentoring, entrep training, micro-finance Insufficient labor demandPublic works/service, wage subsidies 18

 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

 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: Laura:

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 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 “Managing Labor Market Risks and Creating Better Jobs: Alternative Designs for Income Protection and Active Labor Market Policies” (manuscript) Katz, Elizabeth “Programs Promoting Young Women’s Employment: What Works?”