How Active Should Our Active Labor Market Policies Be in a Globalizing World?
February 7, 2017Competitiveness and Productivity

Jobs are the number one policy concern of policymakers in many countries. More than 100 million Africans will enter the labor force over the next decade, and youth unemployment rates are 30 percent or higher in some countries of the Middle East and North Africa (MENA). Technological changes that make automation of jobs increasingly feasible, and concerns that globalization is making it harder to find jobs in a number of industries—even as other opportunities grow—has drawn renewed attention to the issues of skill matching and mobility across occupations and locations. These factors all make it seem imperative that policymakers employ increasingly more active labor market policies.

In this talk, David McKenzie will draw on evaluations of labor market policies that have provided vocational training, wage subsidies, job search assistance, and assistance moving to argue that many active labor market policies are much less effective than policymakers typically assume. He will argue that urban labor markets actually work reasonably well in many cases, with fewer market failures than we might think. As a result, there is less of a role for many traditional active labor market policies than is common practice. He will then discuss examples of job creation policies that do seem to offer promise, and the circumstances under which traditional policies may still be useful.

  • Image

    David McKenzie, Lead Economist, Research Department

    David McKenzie is a Lead Economist in the Development Research Group, Finance and Private Sector Development Unit. He received his B.Com.(Hons)/B.A. from the University of Auckland, New Zealand and his Ph.D. in Economics from Yale University. Prior to joining the World Bank, he spent four years as an assistant professor of Economics at Stanford University. His main research is on migration, enterprise development, and methodology for use with developing country data. He has published more than 100 articles in journals such as the Quarterly Journal of Economics, Science, Review of Economics and Statistics, Journal of the European Economic Association, Economic Journal, American Economic Journal: Applied Micro, Journal of Econometrics, and all leading development journals.
  • Image

    Asli Demirgüç-Kunt, Director of Research Department

    Asli Demirgüç-Kunt is the Director of Research in the World Bank. After joining the Bank in 1989 as a Young Economist, she has held different positions, including Director of Development Policy, Chief Economist of Financial and Private Sector Development Network, and Senior Research Manager, doing research and advising on financial sector and private sector development issues.
  • Image

    Michal Rutkowski, Senior Director, Social Protection, Labor and Jobs Global Practice

    Michal Rutkowski is the Senior Director for Social Protection, Labor and Jobs – overseeing the World Bank’s work in developing systems that protect the poorest and vulnerable from crises and shocks, and supporting private sector-led growth. Until July 2016, he was the Director for Multilateral Organizations, and prior to that the Country Director for the Russian Federation and the Resident Representative in Moscow for three years. Mr. Rutkowski joined the World Bank in 1990. He was a country economist for the Russian Federation between 1995-1996, and after taking a brief leave from the Bank, returned as Sector Manager for social protection between 1998-2004, where he led a team of professionals working on pensions, labor market and social assistance reforms in 28 countries of Central and Eastern Europe and former Soviet Union, as well as in Turkey.

The Policy Research Talks showcase the latest findings of the research department and their implications for World Bank operations. The goal of the monthly event is to facilitate a dialogue between researchers and operational staff, so that we can challenge and contribute to the World Bank's intellectual climate and re-examine conventional wisdom in current development theories and practices.  Read More »

Event Details
  • Time: 12:30 – 2:00 PM, February 7, 2017
  • Location: MC 13-121, World Bank Main Complex
  • CONTACT: Tourya Tourougui