Employment in Crisis

Page 113

T o w a r d a n I n t e g r a t e d P o l i c y R e s p o n s e

MAP 4.1  Unemployment insurance throughout the world

Countries with a national unemployment income protection plan Available Not available No data

IBRD 45553 | FEBRUARY 2021

Unemployment insurance: Falling short of an adequate crisis response Job displacement support is effectively out of reach for most workers in the LAC region. Only about 12 percent of unemployed workers in the region have received unemployment benefits (ILO 2019). This rate of effective coverage falls far below that observed in developing and emerging-market ­countries in Central and Eastern Europe and in some countries in Asia and the Pacific (see figure 4.5). Widespread, u n reg u lated i n formal employment practices are the principal culprit for the small share of workers who can access unemployment income support in the LAC region. This low rate of access is the case even in countries with comprehensive sets of unemployment insurance instruments, such as Argentina, Brazil, and Ecuador (ILO 2020). For informal workers, any kind of displacement income support is generally weak—informal urban workers often fall into poverty during crises—and 55 percent of all workers in the LAC region hold this status (Messina and Silva 2020).

However, informal employment practices are only part of the problem. Workers with formal but more precarious contracts may be statutorily excluded from coverage by unemployment income support programs (Fietz 2020). And even among formally employed workers with “standard” employment contracts, effective coverage is disappointingly low. Demanding eligibility requirements that fail to reflect the patterns of employment and tenure achieved even by many formal workers impede effective coverage. Regulatory and administrative failures often mean that contributions are not received. And the transaction costs of securing benefits can be prohibitively high, particularly if the benefits are meager. Beyond the exceptional case of Barbados, whose system delivers benefits to 88 percent of unemployed workers, only in The Bahamas, Chile, and Uruguay do national unemployment insurance arrangements appear to provide widespread, effective coverage (figure 4.5, panel b). Outside these three countries, even in the remaining few LAC

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References

23min
pages 151-159

Notes

6min
pages 149-150

Conclusion

6min
pages 147-148

4.18 Tackling structural issues that worsen the impacts of crises on workers

1min
page 146

4.12 Employment and reemployment policies, by the nature of the shock causing displacement

5min
pages 130-131

4.4 Permanent, systemic shocks: Responses to job dislocation caused by structural changes

3min
page 132

4.6 Evidence on the effects of place-based policies on mobility and labor market outcomes

3min
page 145

4.17 Labor market regulation instruments and the duration of unemployment

15min
pages 139-143

4.11 Positive effects of welfare transfers on local formal employment

5min
pages 126-127

4.5 How well have regional policies performed at strengthening economic opportunities?

3min
page 144

4.1 Family allowances as de facto unemployment insurance

3min
page 123

4.8 Insufficient support, with many left behind

2min
page 122

selected LAC countries

2min
page 121

Aggregate: Stronger macroeconomic stabilizers

6min
pages 106-107

4.1 Landscape of formal unemployment income support in the LAC region

2min
page 112

4.1 How adjustment works and a triple entry of policies to smooth it

1min
page 105

4.1 Unemployment insurance throughout the world

1min
page 113

Introduction

8min
pages 101-103

Three key policy dimensions

3min
page 104

References

11min
pages 96-100

Notes

3min
page 95

Places: The role of local opportunities and informality

6min
pages 92-93

Introduction

5min
pages 75-76

Workers: A bigger toll on the unskilled

6min
pages 77-78

Conclusion

3min
page 68

3.1 Effect on wages of displacement caused by plant closings in Mexico

3min
page 79

and informal sectors, 2005–17

1min
page 66

A changing employment structure and the disappearance of good jobs

3min
page 65

2.2 Cyclicality of net flows across sectors and out of employment, 2005–17

6min
pages 55-56

Key insights

15min
pages 29-33

References

5min
pages 42-43

Labor market flows: Unemployment versus informality

2min
page 50

Introduction

8min
pages 47-49

Notes

3min
page 41

1.4 Addressing crises’ impacts and preparing workers for change: Policy reforms

1min
page 39

1.3 Stabilizers and macroeconomic frameworks: Policy reforms

7min
pages 36-38

Rationale for this report

1min
page 25
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