Title page
Contents
Abstract 3
About the authors 3
Introduction 8
1. Conceptual framework 9
1.1. Government intervention in the labour market 9
2. Literature review 13
2.1. Fiscal multipliers 13
2.2. Direct public job creation 15
2.2.1. Effects on private sector employment, participation and net unemployment 15
2.2.2. Some evidence on public sector employment in advanced countries 16
2.2.3. Some evidence on public works in developing countries 17
2.3. Active labour market programmes 19
2.3.1. Public employment services 19
Empirical evidence 20
2.3.2. Training-based programmes 21
Empirical evidence 22
2.3.3. Employment subsidies 22
The effectiveness of hiring subsidies during crises 25
Tax policy to stimulate an inclusive labour market 25
Short-time work schemes in advanced countries 27
2.3.4. In-work benefits 28
2.4. Unemployment protection 30
Recent evidence on unemployment benefits 32
2.5. Old-age pensions 34
2.6. Disability benefits 35
2.7. Which policies work best for women? 36
Conclusion 38
Summary 38
Gaps in the literature 40
Annex 42
Some theories on the impact of fiscal interventions on the labour market 45
References 56
Acknowledgements 66
Boxes
Box 1. Mahatma Gandhi National Rural Employment Guarantee Scheme, India 19
Box 2. Evidence from meta-analysis of the effect of ALMPs 39
Annex Tables
Table A1. Fiscal spending and transfer programmes and their impact on labour market outcomes: selected empirical studies 48
Annex Figures
Figure A1. Tax expenditures by country income groups 42
Figure A2. Share of public sector employment in total employment 42
Figure A3. Female versus male share in employment by institutional sector in selected European countries 43
Figure A4. Female versus male share in employment by institutional sector in selected African countries 43
Figure A5. Take-up of employment retention schemes for selected European countries 44
Figure A6. Percentage of persons above statutory retirement age receiving a pension, by region, latest available year 44
Figure A7. Labour market flows 45
Figure A8. Beveridge curve and the matching function 46