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Labor Market Reforms for Job Creation and Competitiveness

Labor Market Reforms for Job Creation and Competitiveness. Gordon Betcherman World Bank Black Sea Conference on Regional Integration and Inclusive Growth. Employment rates are generally low in Black Sea countries. Employment rate, 15-64 year olds. Lisbon target. Three messages.

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Labor Market Reforms for Job Creation and Competitiveness

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  1. Labor Market Reforms for Job Creation and Competitiveness Gordon Betcherman World Bank Black Sea Conference on Regional Integration and Inclusive Growth

  2. Employment rates are generally low in Black Sea countries Employment rate, 15-64 year olds Lisbon target

  3. Three messages • Job creation involves multi-sectoral reforms • Protect workers not jobs • Investments in education and skills critical

  4. M I L E S acroeconomic stability nvestment climate abor market reforms ducation and skills ocialsafety net Job creation requires more than labor market reforms Labor demand Labor supply

  5. Obstacles to growth

  6. Links between LM regulations and institutions and competitiveness Policies for labor adjustment LM regulatory framework Labor costs Skills training policies • LM flexibility • Appropriate cost structure • Productive workforce • Inclusive labor market Competitiveness

  7. Transition/developing countries often have more protective rules than developed countries

  8. “Protecting workers, not jobs” will lead to better outcomes in the labor market • Current model often protects jobs through strong labor market regulations • Reduces flexibility and encourages informality • Hinders dynamism and provides limited real protection • Reforms to protect workers better address combined challenge of flexibility and protection (flexicurity) • Strengthen training and reemployment programs • Provide transitional income support for unemployed workers • Regulations to protect workers’ basic rights

  9. How different OECD countries balance protecting jobs vs workers Protect workers Protecting jobs

  10. Modern firms demand higher skills and better education Percentage of workforce with tertiary education “Modern” firms “Traditional” firms

  11. Aging will place a premium on education % Population Change, 2000-2025

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