Indhira Santos

Carolina Sánchez-Páramo

Omar S. Arias

María E. Dávalos

Erwin R. Tiongson

Carola Gruen

Natasha de Andrade Falcão

Gady Saiovici

Cesar A. Cancho

What can be done to create more and better jobs in Europe and Central Asia? And should there be specific policies to help workers access those jobs? The authors of this book examine these questions through the lens of two contextual factors: the legacy of centralized planned economies and the mounting demographic pressures associated with rapid aging in some countries and soaring numbers of youth entering the workforce in others. The authors find the following: Market reforms pay off, albeit with a lag, in terms of jobs and productivity. A small fraction of superstar high-growth firms accounts for most of the new jobs created in the region. Skills gaps hinder employment prospects, especially of youth and older workers, because of the inadequate response by the education and training systems to changes in the demand for skills. Employment is hindered by high implicit taxes on formal work and barriers that affect especially women, minorities, youth, and older workers. Low internal labor mobility prevents labor relocation to places with greater job creation potential. Back to Work: Growing with Jobs in Europe and Central Asia asserts that to get more people back to work and to grow with jobs, countries, especially late reformers, need to regain the momentum for economic and institutional reforms that existed before the economic crisis. They should lay the fundamentals to create jobs for all workers, by pushing reforms to create the enabling environment for existing firms to grow, become more productive, or exit the market and let new firms emerge and succeed (or fail fast and cheap). They should also implement policies to support workers so that those workers are prepared to take on the new jobs being created, by having the right skills and incentives, unhindered access to work, and being ready to relocate.

Growing with Jobs in Europe and Central Asia

Back to Work

Michelle Riboud

Carlos Silva-Jauregui

"Whether or not labor market rigidities are an important contributor to persistently high levels of unemployment remains at the center of an important debate in Europe. European labor markets are often viewed as rigid and inflexible in opposition to those in North America where legislation is less protective and fosters more mobility. This paper shows that the labor market policies adopted by Central and Eastern European countries, aspiring to join the European Union, do not appear excessively rigid. However, significant and wide- ranging economic reform programs make it difficult to assess the impact of labor market institutions."

Institutional Reform and Labor Market Performance in Central and Eastern Europe

Does Eurosclerosis Matter?

Norbert Rüdiger Schady

Sánchez-Páramo and Schady describe the evolution of relative wages in five Latin American countries--Argentina, Brazil, Chile, Colombia, and Mexico. They use repeated cross-sections of household surveys, and decompose the evolution of relative wages into factors associated with changes in relative supply and relative demand. The authors have three main conclusions: * Increases in the relative wages of the most skilled (university-educated) workers took place concurrently with increases in their relative abundance in all of the countries except Brazil. This is strong evidence of increases in the demand for skilled workers. * Increases in the wage bill of skilled workers occurred largely within sectors, and in the same sectors in different countries, which is consistent with skill-biased technological change. * Trade appears to be an important transmission mechanism. Increases in the demand for the most skilled workers took place at a time when countries in Latin America considerably increased the penetration of imports, including imports of capital goods. The authors show that changes in the volume and research and development intensity of imports are significantly related to changes in the demand for more skilled workers in Latin America. Their research complements earlier work on the effects of technology transmitted through trade on productivity and on the demand for skilled labor. This paper--a product of Public Services, Development Research Group--is part of a larger effort in the group to understand the impact of globalization on human capital outcomes.

Technology, Trade, and the Rising Demand for Skilled Workers in Latin America

Off and Running?

Carolina Sánchez-Páramo

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