## _061512

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---

### Executive summary — overview and purpose
- Sample: 58 advanced and emerging economies.
- Objectives:
  - (i) identify key structural labor-market weaknesses in advanced and emerging economies;
  - (ii) discuss the impact of tax and expenditure policies on employment;
  - (iii) provide a menu of tax and expenditure measures to boost employment.
- Focus: incentives to increase labor demand and supply rather than the impact of fiscal policy on employment through aggregate demand effects.

### Key labor-market trends and challenges
- Employment and participation:
  - Average labor force participation rates have risen over the past 20 years, mainly due to female entry; female participation rates remain almost 20 percentage points lower than those for men.
  - Participation of older men (age 55–64): overall average of 67 percent, compared with 92 percent for the 25–54 age group.
- Crisis-related changes:
  - Employment rates declined by 3½ percentage points in advanced Europe and by 3 percentage points in emerging Europe since the onset of the global financial crisis.
  - More than four out of every 10 persons of working age is now without a job in Greece, Italy, and Spain.
  - In the United States, employment rates reached a 25-year low in 2010 and remained depressed in early 2012.
- Unemployment (by 2011):
  - Advanced Europe: 9 percent.
  - Other advanced economies: 6 percent.
  - Emerging Europe: 10½ percent.
- Cross-country variation:
  - One of every three advanced economies experienced a ten-year low in employment rates in 2010.
  - Employment rates below 50 percent in several emerging economies (e.g., Egypt, Morocco, Jordan) even without large crisis impacts.

### How fiscal policy affects labor markets — channels and evidence
- Main channels:
  - Design of tax systems (labor tax wedges).
  - Structure of social benefits (unemployment benefits, pensions, family benefits).
- Tax effects:
  - Taxes on labor (personal income taxes and social security contributions) reduce labor demand (raise labor costs) and reduce labor supply (lower after-tax wages).
  - Final consumption taxes (VAT, excises) can reduce real wages and affect labor supply.
  - Corporate taxes can reduce investment and production and indirectly affect labor supply.
- Social benefits effects:
  - Weaken the link between labor supply and incomes; affect retirement, participation, job search, and job acceptance.
  - Means-tested benefits can reduce work incentives as benefits are withdrawn with earnings.
- Empirical literature counts (Table 2 summary on structural unemployment):
  - Labor tax wedge: Number of studies 20 — Raise unemployment: 15; Not significant/ambiguous: 5; Reduce unemployment: 0.
  - Benefit replacement rate: Number of studies 20 — Raise unemployment: 16; Not significant/ambiguous: 4; Reduce unemployment: 0.
  - ALMPs: Number of studies 11 — Raise unemployment: 0; Not significant/ambiguous: 5; Reduce unemployment: 6.
  - Union density/coverage: Number of studies 20 — Raise unemployment: 6; Not significant/ambiguous: 12; Reduce unemployment: 2.
  - Union coordination: Number of studies 18 — Raise unemployment: 3; Not significant/ambiguous: 4; Reduce unemployment: 11.
  - Employment protection: Number of studies 18 — Raise unemployment: 6; Not significant/ambiguous: 10; Reduce unemployment: 2.

### Policy recommendations — advanced economies (short- and medium-term)
- Short-run (reduce unemployment):
  - Lower labor tax wedges (e.g., reduce employer social security contributions).
  - Expand wage subsidies, especially for low-wage earners.
  - Expand active labor market programs (ALMPs): training, job assistance, improved matching.
- Medium-term (boost labor supply and participation):
  - Targeted tax relief for single parents and secondary earners.
  - Redesign child benefits to encourage parental labor force participation.
  - Reform pension and disability schemes to incentivize later retirement and reduce non-employment exits.
  - Condition receipt of social benefits on employment (in-work benefits).
- Design principles:
  - Target measures to limit fiscal cost and adverse equity effects.
  - Recognize supply-boosting measures typically take more time to raise employment.

### Policy recommendations — emerging economies
- Priorities:
  - Structural reforms in labor, capital, and product markets often more important than fiscal reforms.
  - As social benefit systems expand, design fiscal policies to promote employment and avoid informality.
- Fiscal levers:
  - Address distortions from high labor tax wedges.
  - Improve pension design where inefficient structures harm employment incentives.
  - Use effective ALMPs and consider individual saving accounts for certain risks.
- Implementation caveats:
  - Effectiveness varies by labor market institutions, employment challenges, and administrative capacity.

### Tradeoffs and country-specific approaches
- Tradeoffs:
  - Employment-promoting policies may conflict with equity and fiscal consolidation.
  - Reforms must be judged against fiscal constraints and broader objectives.
- Need for tailored strategies:
  - Policies should reflect country-specific institutional settings and administrative capacity.

### Regional contrasts and problem areas
- Employment gaps:
  - Differences over 15 percentage points between high-employment advanced economies (Scandinavia and Switzerland) and low-employment advanced economies (southern Europe).
- Regional problem clusters:
  - High youth unemployment: Southern and Eastern Europe, MENA.
  - Elevated long-term unemployment: Southern, Central, and Eastern Europe.
  - High unemployment among the unskilled: advanced economies ~50 percent above average; Central and Eastern Europe often exceed 20 percent.
  - Low female participation (25–54): MENA ~60 percentage points lower than males; Latin America and Asia ~30 percentage points; Southern Europe ~20 percentage points.
  - Low participation of older workers (55–64): often 30–40 percentage points lower than prime-age groups in MENA and parts of Europe.

### Fiscal-policy instruments to boost labor demand — key findings and examples
- Reducing labor taxes:
  - Price elasticity of labor demand close to −1 (Cahuc and Zylberberg, 2004).
  - Simulation: cut employer social contribution rates by 3 percentage points → direct revenue loss ≈ 1 percent of GDP → increase domestic labor demand by 2.5 percent (example for average OECD country).
  - Technical note: at labor costs of 122 percent of the gross wage (OECD average), lowering the contribution rate by 3 percentage points reduces labor costs by approximately 2.5 percent.
  - Targeting: reductions most effective if targeted to low-wage earners.
- Revenue-neutral tax shifts (labor → consumption/property taxes):
  - Can act as “fiscal devaluation” in open economies with fixed exchange rates.
  - Portugal example: fiscal devaluation equivalent to 1 percent of GDP would raise employment in the short term by between 0.2 and 1 percent (ECB, 2011).
  - Long-term: effects may gradually disappear as wages adjust; possible positive long-term growth/employment effects via broader tax base.
  - Distributional concern: consumption taxes are usually slightly regressive; may require offsetting measures.
- Business tax incentives:
  - Lowering cost of capital tends to expand labor demand on balance (Chirinko, 2002).
  - Corporate tax reductions may favor skilled workers more than low-skilled workers.
  - Targeted tax measures often less effective and more distortionary than general business tax relief.

### Expenditure-side demand measures — evidence and cautions
- Hiring and wage subsidies:
  - Effective if targeted to generate new jobs and focused on low-wage workers.
  - Hiring subsidies targeted at “new” jobs are complex to monitor and often have low take-up and small employment effects.
- Employment support schemes (short-time work):
  - About 70 percent of advanced and 45 percent of emerging economies have such schemes.
  - Evidence of effectiveness during downturns (e.g., Germany, Japan); should be withdrawn as conditions improve.
- Public works:
  - Effective in increasing employment in the short run; better when offered at low wages to encourage self-selection.
  - Should be phased out as activity recovers.
- Temporary public-sector employment:
  - Not cost-effective as long-term strategy; risks crowding out private employment and creating fiscal burdens.

### Policies to boost labor supply — objectives, elasticities, and targeted reforms
- Objectives and channels:
  - Increase participation and hours to spur growth, support fiscal consolidation, and offset aging.
  - Supply reforms act gradually; wages must adjust and demand must absorb increased supply.
- Elasticities and examples:
  - Micro wage elasticities: between 0.2 and 0.3 on average; macro studies: around 0.5.
  - Quantified example: a 10 percentage point higher after-tax wage (for example due to a reduction in the personal income tax rate by 6 percentage points10) would raise total labor supply by 2 to 5 percent.
  - Bassanini and Duval (2006): a 10 percentage point higher labor tax wedge in OECD countries would raise structural unemployment by an average of 2.8 percentage points.
- Targeted tax relief groups (higher labor supply elasticities):
  - Women/secondary earners: replace family taxation with individual taxation; higher tax exemption for women; target single parents.
  - Older workers: specific earnings tax credits (examples: Australia, Denmark, the Netherlands, Sweden).
  - Low-skilled workers: in-work tax credits for low-wage earners; more than half of advanced economies have introduced such credits.

### In-work tax credits and childcare
- In-work tax credits:
  - Design: phased out with income; when phased out on family income can create high marginal tax rates for both partners.
  - U.S. evidence: net gain of the earned income tax credit for low-skilled workers is only 30 percent per dollar spent (Rothstein, 2010).
  - Administrative constraint: most appropriate where tax administration is strong and withholding is used.
- Childcare subsidies:
  - Elasticity of female labor supply with respect to price of childcare usually between −0.13 and −0.2.
  - If subsidies reduce childcare price by 50 percent, labor supply of young mothers rises by between 6.5 and 10 percent.

### Social benefits, activation, unemployment benefits, and pensions — findings and reform options
- Unemployment benefits:
  - Structuring benefits to decline over time motivates more intensive job search.
  - Average indicators:
    - Average Replacement Rate =  52
    - Average Duration = 15.4
  - Individual unemployment savings accounts:
    - Part of contributions credited to individual accounts; draw during unemployment; after exhaustion individuals can borrow from the government at the same interest rate.
    - Used in emerging economies including Brazil and Chile.
  - Experience rating: links employer UI premiums to historical layoffs to reduce layoffs and dampen turnover.
- Pensions:
  - Insufficient adjustment for early/late retirement creates incentives to retire early.
  - Moving to an age-neutral pension scheme in a group of 15 OECD countries would increase participation rates of older male workers by roughly 5 percentage points.
  - Greater reliance on defined contribution schemes can strengthen the link between contributions and benefits and reduce disincentives.
- Disability benefits:
  - Require stringent medical and work-capacity evaluations by independent evaluators; integrate partial-capacity individuals into unemployment systems and ALMPs.

### Appendix statistics — unemployment benefits (Appendix Table 7) — key aggregates (preserved exactly)
- Average (advanced economies):
  - Spending 2007 (Percent of GDP): 0.8
  - Spending 2009 (Percent of GDP): 1.7
  - Contribution Requirement (Months): 9.4
  - Maximum Duration (Months): 16.5
  - Average Replacement Rate: 51.8
  - Full Rate Equivalent (Months): 9.1
  - OECD Score on Eligibility Criteria — Total: 3.2
  - Entitlement Conditions: 3.0
  - Job search and Availability: 3.3
  - Job search Monitoring: 3.1
  - Sanctions: 3.2
- Advanced Europe (aggregate):
  - Spending 2007 (Percent of GDP): 0.9
  - Spending 2009 (Percent of GDP): 1.7
  - Contribution Requirement (Months): 11.0
  - Maximum Duration (Months): 18.1
  - Average Replacement Rate: 52.7
  - Full Rate Equivalent (Months): 10.8
  - OECD Score on Eligibility Criteria — Total: 3.2
  - Entitlement Conditions: 3.1
  - Job search and Availability: 3.4
  - Job search Monitoring: 3.1
  - Sanctions: 3.4
- Other Advanced (aggregate):
  - Spending 2007 (Percent of GDP): 0.5
  - Spending 2009 (Percent of GDP): ...
  - Contribution Requirement (Months): 5.0
  - Maximum Duration (Months): 11.2
  - Average Replacement Rate: 45.3
  - Full Rate Equivalent (Months): 3.2
  - OECD Score on Eligibility Criteria — Total: 2.9
  - Entitlement Conditions: 2.8
  - Job search and Availability: 2.9
  - Job search Monitoring: 3.5
  - Sanctions: 2.4
- Selected country examples:
  - Denmark:
    - Spending 2007 (Percent of GDP): 1.9
    - Spending 2009 (Percent of GDP): 2.1
    - Contribution Requirement (Months): 12.1
    - Maximum Duration (Months): 24.0
    - Average Replacement Rate: 90.0
    - Full Rate Equivalent (Months): 43.2
    - OECD Score on Eligibility Criteria — Total: 2.8
    - Entitlement Conditions: 2.0
    - Job search and Availability: 4.1
    - Job search Monitoring: 2.0
    - Sanctions: 3.0
  - Spain:
    - Spending 2007 (Percent of GDP): 2.1
    - Spending 2009 (Percent of GDP): 3.7
    - Contribution Requirement (Months): 12.0
    - Maximum Duration (Months): 24.0
    - Average Replacement Rate: 62.5
    - Full Rate Equivalent (Months): 15.0
    - OECD Score on Eligibility Criteria — Total: 3.6
    - Entitlement Conditions: 4.0
    - Job search and Availability: 3.5
    - Job search Monitoring: 3.0
    - Sanctions: 3.8
  - United States:
    - Spending 2007 (Percent of GDP): 0.3
    - Spending 2009 (Percent of GDP): ...
    - Contribution Requirement (Months): 4.7
    - Maximum Duration (Months): 22.8
    - Average Replacement Rate: 53.3
    - Full Rate Equivalent (Months): 3.2
    - OECD Score on Eligibility Criteria — Total: 3.1
    - Entitlement Conditions: 3.5
    - Job search and Availability: 2.0
    - Job search Monitoring: 2.0
    - Sanctions: 5.0

### Appendix statistics — family benefits in emerging economies (selected aggregates and examples)
- Average (all listed countries):
  - Total Spending in 2007 (Percent of GDP): 0.9
  - Minimum Contribution Maternity (Weeks): 0.2
  - Maternity Total Duration (Weeks): 14.3
  - Maternity Paid Leave (Weeks): 81.2
  - Maternity Full-Rate Equivalent (Weeks): 29.1
  - Parental Minimum Contribution (Weeks): 31.3
  - Parental Paid Leave (Weeks): 16.8
  - Parental Duration if Student (Years): 30.0
  - Parental Duration Non Student (Years): 18.7
  - Means Tested (=1): 15.6
  - Average Benefit (Percent Average Wage): 0.7
- Emerging Europe (aggregates):
  - Total Spending in 2007 (Percent of GDP): 1.6
  - Maternity Paid Leave (Weeks): 125.3
  - Maternity Full-Rate Equivalent (Weeks): 50.9
  - Parental Minimum Contribution (Weeks): 42.1
  - Parental Duration Non Student (Years): 20.6
  - Child Benefits Total Spending in 2007 (Percent GDP): 0.1
- Other Emerging (aggregates):
  - Total Spending in 2007 (Percent of GDP): 0.4
  - Maternity Total Duration (Weeks): 16.7
  - Maternity Paid Leave (Weeks): 15.0
  - Maternity Full-Rate Equivalent (Weeks): 16.0
  - Parental Paid Leave (Weeks): 18.9
  - Parental Duration Non Student (Years): 16.9
  - Child Benefits Total Spending in 2007 (Percent GDP): 0.0
- Selected country examples:
  - Argentina:
    - Total Spending in 2007 (Percent of GDP): 0.6
    - Parental Benefits 2010/11 Duration Non Student (Years): 18.0
  - Brazil:
    - Total Spending in 2007 (Percent of GDP): 0.6
    - Parental Paid Leave (Weeks): 0.0
    - Parental Duration Non Student (Years): 14.0
  - Bulgaria:
    - Total Spending in 2007 (Percent of GDP): 2.0
    - Maternity Paid Leave (Weeks): 27.0
    - Maternity Full-Rate Equivalent (Weeks): 19.0
    - Parental Paid Leave (Weeks): 52.0
    - Parental Duration if Student (Years): 59.0
    - Parental Duration Non Student (Years): 20.0
    - Child Benefits Total Spending in 2007 (Percent GDP): 0.8
  - China:
    - Total Spending in 2007 (Percent of GDP): 0.1
    - Parental Paid Leave (Weeks): 0.0
    - Maternity Total Duration (Weeks): 13.0
  - Hungary:
    - Total Spending in 2007 (Percent of GDP): 3.0
    - Minimum Contribution Maternity (Weeks): 0.7
    - Maternity Total Duration (Weeks): 26.0
    - Maternity Paid Leave (Weeks): 160.0
    - Maternity Full-Rate Equivalent (Weeks): 160.0
    - Parental Paid Leave (Weeks): 160.0
    - Parental Duration if Student (Years): 23.0
    - Parental Duration Non Student (Years): 16.0
    - Means Tested (=1): 0.0
    - Average Benefit (Percent Average Wage): 0.1
    - Child Benefits Total Spending in 2007 (Percent GDP): 3.3
  - Poland:
    - Total Spending in 2007 (Percent of GDP): 0.8
    - Minimum Contribution Maternity (Weeks): 0.3
    - Maternity Total Duration (Weeks): 4.0
    - Maternity Paid Leave (Weeks): 174.0
    - Maternity Full-Rate Equivalent (Weeks): 174.0
    - Parental Paid Leave (Weeks): 174.0
    - Parental Duration if Student (Years): 21.0
    - Parental Duration Non Student (Years): 18.0
    - Means Tested (=1): 1.0
    - Average Benefit (Percent Average Wage): 0.1
    - Child Benefits Total Spending in 2007 (Percent GDP): 1.6

### Regulation, institutions, and micro evidence — main findings
- Minimum wage:
  - Official minimum wage exists in 21 OECD countries; levels range from around 25 percent of average wage (Korea and Mexico) to almost 50 percent (Australia, France, New Zealand).
  - Empirical studies generally support a negative elasticity of employment to the minimum wage, mainly affecting low-paid employment (Neumark and Wascher, 2011).
- Employment protection:
  - Stricter employment protection reduces flows in and out of employment and leads to longer unemployment duration.
  - Employment protection reduces job-finding rates and employment levels of youth, immigrants, and women.
- Flexible contracts and dual markets:
  - Employment protection raises the share of temporary contracts; dual markets may be inefficient.
- Product-market regulation and unions:
  - Entry barriers and anti-competitive regulation generally correlate with higher unemployment.
  - Union effects are inconclusive; bargaining centralization matters.
- Housing/mobility:
  - Low regional mobility and housing transaction costs can increase unemployment duration and mismatches.

### Caveats and implementation constraints
- Most empirical evidence focuses on advanced economies; applicability to emerging economies is limited where tax and benefit coverage remains low and informality is significant.
- Evidence reflects average policy impacts; heterogeneity in institutions, initial conditions, and administrative capacity can produce different outcomes.
- Diminishing returns: programs that work on a small scale may lose effectiveness when expanded.

*Source: IMF staff analysis and synthesis of labor-market trends, fiscal policy impacts, and policy recommendations contained in the provided document.*

### Executive Summary ......................................................................................................

### EXECUTIVE SUMMARY

### Overview and purpose
- Low employment rates in many advanced and emerging economies reflect both weak cyclical conditions since the onset of the global financial crisis and deep-rooted labor-market weaknesses.
- The paper (58 advanced and emerging economies) aims to: (i) identify key structural labor-market weaknesses in advanced and emerging economies; (ii) discuss the impact of tax and expenditure policies on employment; and (iii) provide a menu of tax and expenditure measures to boost employment.
- Focus: incentives to increase labor demand and supply rather than the impact of fiscal policy on employment through aggregate demand effects.

### Key labor-market trends and challenges
- Employment and participation:
  - Average labor force participation rates have risen over the past 20 years, primarily due to females entering the work force; female participation rates remain almost 20 percentage points lower than those for men.
  - Participation of older men (age 55–64) is low: overall average of 67 percent, compared with 92 percent for the 25–54 age group.
- Crisis-related changes:
  - Employment rates declined by 3½ percentage points in advanced Europe and by 3 percentage points in emerging Europe since the onset of the global financial crisis.
  - More than four out of every 10 persons of working age is now without a job in Greece, Italy, and Spain.
  - In the United States, employment rates reached a 25-year low in 2010 and remained depressed in early 2012.
- Unemployment:
  - By 2011, unemployment rates had risen to 9 percent in advanced Europe, 6 percent in other advanced economies, and 10½ percent in emerging Europe.
  - Youth unemployment trends mirror total unemployment but at higher levels.
- Cross-country variation:
  - Employment losses were greatest where output declines were largest, but the responsiveness of employment to output changes varies widely across countries.
  - In several emerging economies (e.g., Egypt, Morocco, Jordan), employment rates remain below 50 percent even without large crisis impacts.
  - One of every three advanced economies experienced a ten-year low in employment rates in 2010.

### How fiscal policy affects labor markets (summary of conclusions)
- Fiscal policy affects labor markets through:
  - The design of tax systems (e.g., labor tax wedges) and
  - The structure of social benefits (e.g., unemployment benefits, pensions, family benefits).
- Effective policy design must consider interactions with labor market institutions, administrative capacity, and fiscal constraints.

### Policy recommendations — Advanced economies
- Short-run measures to reduce unemployment:
  - Lower labor tax wedges, for example by reducing employer social security contributions.
  - Expand wage subsidies, especially for low-wage earners.
  - Expand active labor market programs (ALMPs) such as training and job assistance to improve matching and reduce frictions.
- Medium-term measures to boost labor supply and participation:
  - Targeted tax relief for single parents and secondary earners.
  - Redesign child benefits to encourage parental labor force participation.
  - Reform pension and disability schemes to incentivize later retirement and reduce non-employment exits.
  - Condition receipt of social benefits on employment (e.g., “in-work benefits”) to raise employment over the medium term.
- Design principles:
  - Limit fiscal cost and adverse equity effects by targeting measures to specific worker groups.
  - Recognize that measures to boost labor supply will typically take more time to raise employment.

### Policy recommendations — Emerging economies
- Priorities:
  - Structural reforms in labor, capital, and product markets are often more important than fiscal reforms for strengthening employment outcomes.
  - As social benefit systems expand, appropriately designed fiscal policies become increasingly important to promote employment and avoid a shift toward informality.
- Fiscal levers with scope for reform in some countries:
  - Address distortions from high labor tax wedges.
  - Improve pension design where inefficient structures harm employment incentives.
  - Use effective ALMPs and consider individual saving accounts for certain risks.
- Country-specificity:
  - The effectiveness of reforms varies considerably across economies and depends on labor market institutions, the nature of employment challenges, and administrative capacity.

### Tradeoffs and country-specific approaches
- Policy tradeoffs:
  - Policies to promote employment can involve tradeoffs with other public policy goals (e.g., equity, fiscal consolidation).
  - Reforms must be judged relative to fiscal constraints and broader policy objectives.
- Need for tailored strategies:
  - Country-specific approaches are required to formulate appropriate strategies to boost employment, considering institutional settings and administrative capacity.

*Source: EXECUTIVE SUMMARY — IMF staff analysis and synthesis of labor-market trends, fiscal policy impacts, and policy recommendations contained in the provided document.*

### 10.      Employment outcomes vary markedly across regions. Among the advanced

### _061512 - 10.      Employment outcomes vary markedly across regions. Among the advanced

### Employment outcomes and regional contrasts
- Differences in employment rates between high-employment advanced economies (Scandinavia and Switzerland) and low-employment advanced economies (southern Europe) are over 15 percentage points (Figure 3).
- In emerging economies, employment rates are lowest in the Middle East and North Africa (MENA), South Africa, and Turkey; relatively high in some Latin American countries (Brazil, Peru) and some emerging European economies (Kazakhstan, Russia).
- Comparative snapshots use averages for 2007 and 2010 and percent changes over 2007–2010 to illustrate cross-country shifts in employment and real GDP.

### Key labor-market problems by region (disaggregated overview, Table 1)
- High youth unemployment
  - Especially acute in Southern and Eastern Europe, and the Middle East and North Africa.
  - Youth unemployment is often over twice the national average in these groups.
- Elevated long-term unemployment
  - Particularly in Southern, Central, and Eastern Europe.
  - Less of an issue in Scandinavian countries and other advanced economies, though increasing in the United States.
  - Long spells may cause labor force exit and human capital loss.
- High unemployment among the unskilled
  - In advanced economies, unskilled unemployment is approximately 50 percent above the average.
  - In Central and Eastern European countries, unskilled unemployment often exceeds 20 percent.
  - High unskilled unemployment contributes to higher inequality.
- Low female participation (under 55 years)
  - Female participation in the 25–54 age group is approximately 60 percentage points lower than males in MENA, 30 percentage points lower in Latin America and Asia, and 20 percentage points lower in Southern Europe.
- Low participation of older workers (55–64)
  - In MENA and parts of Europe, participation for ages 55–64 is generally between 30 and 40 percentage points lower than prime-age groups (partly reflecting health and ability to work).

- Table 1 classification thresholds (as used in the source):
  - Green = relatively good performance with limited room for improvement:
    - Unemployment: Total < 5; Youth < 15; Long < 20; Low < 10.
    - Participation: Total > 75; M25–54 > 90; M55–64 > 70; F25–54 > 75; F55–64 > 55.
  - Orange* = intermediate performance, with some room for improvement.
  - Red ** = relatively weak performance with large room for improvement:
    - Unemployment: Total > 10; Youth > 20; Long > 40; Low > 20.
    - Participation: Total < 55; M25–54 < 80; M55–64 < 60; F25–54 < 60; F55–64 < 40.

### Fiscal policies affecting labor markets — channels and trends
- Key policy areas influencing employment: tax design and social benefit structure.
  - Taxes on labor (personal income taxes and social security contributions)
    - Directly reduce labor demand by raising labor costs.
    - Reduce labor supply by lowering after-tax wages.
  - Final consumption taxes (VAT, excises)
    - Can reduce real wages and thus affect labor supply similarly.
  - Corporate taxes
    - Can reduce investment and production and indirectly affect labor supply if firms pass costs to employees.
  - Social benefits (pensions, family, unemployment-related, social assistance)
    - Weaken the link between labor supply and incomes; affect retirement decisions, labor force participation, job search, and job acceptance.
    - Means-tested benefits can reduce work incentives as benefits are withdrawn with earnings.

- Tax structure cross-country patterns
  - Advanced Europe: relatively high tax-to-GDP ratios across all major taxes, including direct labor taxes.
  - Other advanced economies: high income tax ratios, but much lower social security contributions and lower general sales taxes.
  - Emerging Europe: higher social security contributions relative to some peers.
  - Other emerging economies: personal income taxes and social security contributions relatively insignificant; corporate income taxes are a larger revenue source—reflecting significant labor market informality.

- Long-term shifts in tax mix (1980–2010)
  - General trend: burden shifted away from personal income toward consumption taxes (except in other emerging economies).
  - Example: Between 1980 and 2010, personal income tax revenue declined by about 1½ percentage points of GDP in other advanced economies, while consumption tax revenues rose by a similar amount.
  - Corporate tax revenues rose as a percentage of GDP despite lowering statutory rates, owing to gradual broadening of tax bases.
  - In other emerging economies, tax-to-GDP ratios increased across the board (except trade taxes).

### Social benefits, pension spending, and crisis response
- Relative sizes of the welfare state (2007 averages)
  - Advanced Europe: social benefits around 15 percent of GDP.
  - Emerging Europe: social benefits around 12 percent of GDP.
  - Other advanced economies: 9 percent of GDP.
  - Other emerging economies: 6 percent of GDP.
  - Pensions account for over two-thirds of social benefit spending in all regions except other emerging economies.
- Pension trends
  - Public pension spending increased sharply in European countries between 1970 and 1980 due to increased population coverage.
  - Pension spending stabilized around 6 percent of GDP in other advanced economies, but continued to increase in European countries owing to higher benefits and population aging.
  - Pension reforms after the mid-1990s stabilized spending at around 9–10 percent of GDP in Europe.
  - In other emerging economies, gradual increase in pension coverage drove steady pension spending growth.
- Welfare spending and the crisis
  - Between the early 1990s and 2007, increased pension spending was more than offset by declines in other welfare components (lower unemployment and reforms).
  - Between 2007 and 2009, welfare spending increased in virtually all countries—especially those hit hard by the crisis (Estonia, Iceland, Ireland, Lithuania), where increases exceeded 2 percentage points of GDP.
  - On average, over 60 percent of the increase in advanced Europe was due to higher unemployment-related benefits.

### How fiscal policy affects employment — conceptual framework and empirical evidence
- Conceptual points
  - In contexts of involuntary unemployment following output shocks, labor-demand policies are more effective in the short run for increasing employment.
  - In the medium term, stimulating labor supply is important to move employment to higher equilibrium levels.
  - Active labor market policies (ALMPs) that improve matching can have permanent effects by reducing frictional/structural unemployment.
  - Illustration: a leftward shift in labor demand causes unemployment (E1–E0). Demand-side policies can shift labor demand back; supply-side policies raise supply but do not raise employment unless wages adjust.
- Empirical evidence summary (Table 2)
  - Taxes and social benefits can affect participation rates, hours worked, and unemployment.
  - Microeconomic studies find certain ALMPs (job search assistance, training programs) can reduce unemployment.
  - Institutional variables (minimum wages, employment protection, union indicators) matter but results are less conclusive or mixed.
- Table 2 (summary of literature counts on effects on structural unemployment)
  - Labor tax wedge: Number of studies 20 — Raise unemployment: 15; Not significant/ambiguous: 5; Reduce unemployment: 0.
  - Benefit replacement rate: Number of studies 20 — Raise unemployment: 16; Not significant/ambiguous: 4; Reduce unemployment: 0.
  - ALMPs: Number of studies 11 — Raise unemployment: 0; Not significant/ambiguous: 5; Reduce unemployment: 6.
  - Union density/coverage: Number of studies 20 — Raise unemployment: 6; Not significant/ambiguous: 12; Reduce unemployment: 2.
  - Union coordination: Number of studies 18 — Raise unemployment: 3; Not significant/ambiguous: 4; Reduce unemployment: 11.
  - Employment protection: Number of studies 18 — Raise unemployment: 6; Not significant/ambiguous: 10; Reduce unemployment: 2.

*Source: IMF staff analysis and underlying data and tables from the referenced chapter.*

### 20.      Three caveats should be kept in mind when assessing the implications of the

### _061512 - 20.      Three caveats should be kept in mind when assessing the implications of the

### Caveats when applying the literature to country-specific policy advice
- Empirical evidence on the impact of tax and expenditure policies on employment has mainly focused on advanced economies; results may not be fully applicable to emerging economies, which still need to expand coverage of workers under the income tax and social security systems without curtailing employment or exacerbating incentives for informality.
- The evidence reflects the average impact of specific policies across countries and may hide important variations in effectiveness because of differences in labor market institutions, initial employment conditions, and administrative capacity.
- Some policies may face diminishing returns; programs that work well on a small scale should not necessarily be expanded (example: hiring subsidies can lose effectiveness as they expand beyond target groups with high rates of long-term unemployment).

### A. Policies to Boost Labor Demand — Overview
- Labor demand can expand through higher aggregate demand (including exports) and by raising the labor-intensity of production.
- Crisis responses have included reducing (non-wage) labor costs and new programs to create or maintain jobs; such measures can stimulate labor demand in the short run but may not increase employment over the medium term and may need to be phased out as activity recovers.

### Taxation — Reducing labor taxes
- Empirical estimates for advanced economies suggest the price elasticity of labor demand is close to −1 (Cahuc and Zylberberg, 2004).
- Example simulation: if an average OECD country cut employer social contribution rates by 3 percentage points—implying a direct revenue loss of approximately 1 percent of GDP—this would increase domestic labor demand by 2.5 percent.
- Over time, increased labor demand would feed into higher wages and mitigate beneficial employment effects.
- Technical note: Social contributions generally apply to wages net of employer social contributions. At labor costs of 122 percent of the gross wage (the OECD average), lowering the contribution rate by 3 percentage points reduces labor costs by approximately 2.5 percent.

- Targeting:
  - Reductions in non-wage labor costs are most effective if targeted to low-wage earners.
  - Empirical evidence suggests demand for low-skilled labor is relatively elastic (Hammermesh, 1993).
  - Targeted tax relief examples: a threshold below which no or lower social contributions are levied.

### Tax shifts (revenue-neutral shifts from labor to consumption/property taxes)
- A revenue-neutral shift from labor to consumption taxes could boost labor demand by lowering (non-wage) labor costs.
- In open economies with fixed exchange rates such shifts can act as a “fiscal devaluation,” reducing real labor costs and improving competitiveness.
- Model simulation example: for Portugal, a fiscal devaluation equivalent to 1 percent of GDP would raise employment in the short term by between 0.2 and 1 percent (ECB, 2011).
- Long-term effects:
  - Price adjustments will eventually drive up wage costs; impact on employment is expected to gradually disappear across time (De Mooij and Keen, 2012).
  - There may be positive long-term effects on growth and employment via broader tax base effects (Auerbach and Kotlikoff, 1987; Daveri and Tabellini, 2000; Arnold, 2008).
- Distributional concerns:
  - A shift from social contributions to consumption taxes may increase inequality and require offsetting measures.
  - Consumption taxes are usually slightly regressive (although less so on a lifetime basis) while labor taxes are usually progressive.
  - Tax shifts can reduce the real value of social transfers as price levels rise.

### Social contributions versus taxes (implications for employment)
- Financing social benefits through payroll contributions rather than taxes can be better for employment only if workers perceive a strong link between contributions and benefits.
- Where perceived links are weak, relying on broader taxes could increase employment because taxes can bear on capital income, transfers, and property, reducing labor costs.
- Empirical evidence suggests increases in social contributions reduce employment (OECD, 2007).
- Reforms must also consider equity and administrative capacity.

### Business tax incentives
- Reductions in business taxes can boost labor demand, including over the longer term, but are likely to favor more skilled workers.
  - Lowering the cost of capital has two opposing effects: substitution from labor to capital (reducing labor demand) and higher investment that raises output and labor demand. On balance, most empirical studies suggest labor demand expands (Chirinko, 2002).
  - Reductions in the cost of capital reduce unemployment (Phelps, 1994; Blanchard, 1997).
  - Substitution between capital and labor tends to be easiest for low-skilled labor; corporate tax reductions might have a relatively weaker effect on low-skilled labor demand (Duffy and others, 2004).
- Targeted business tax measures (for specific firms/sectors) are often less effective in generating employment than general business tax relief:
  - Many countries offer favorable tax facilities for small businesses; the economic rationale is weak.
  - Emerging economies use special incentives (tax holidays, low-tax zones, sectoral incentives) to attract foreign investment, but these policies are generally less effective and more distortionary and vulnerable to abuse.

### Box summaries (programmatic responses during crisis)
- Since the onset of the global economic crisis, most advanced and emerging economies introduced or expanded programs to support labor demand: credit to SMEs, wage subsidies for existing and new jobs, reductions in non-wage labor costs, short-time work schemes, and public works programs.
- Advanced economies relied more on wage subsidies for new jobs and short-time work schemes; emerging economies more often increased credit/support to SMEs, wage subsidies for existing jobs, and public works.
- Expansion of ALMPs (Active Labor Market Programs):
  - Share of advanced economies introducing or expanding ALMPs is nearly 80 percent, mostly for training and job search/intermediation.
  - Most emerging economies (over 60 percent) also expanded ALMPs, though effectiveness may be limited by implementation capacity.

### Expenditures — Hiring subsidies, employment support, public works
- Hiring and wage subsidies:
  - Can be effective if appropriately targeted to generate new jobs rather than extend hours of existing employees.
  - More effective when targeted to workers for low-wage jobs and when targeted to workers rather than firms.
  - Hiring subsidies targeted at “new” jobs are complex to monitor and often have low take-up and small employment effects.
- Employment support schemes (short-time work):
  - Can reduce layoffs; about 70 percent of advanced and 45 percent of emerging economies have such schemes.
  - Evidence of effectiveness during downturns, especially in Germany and Japan.
  - Should be withdrawn as conditions improve to avoid locking workers into unproductive jobs and reduce fiscal costs.
  - Consideration could be given to wage loss insurance to facilitate movement to firms with better long-term prospects.
- Public works programs:
  - Effective in increasing employment in the short run; net impact enhanced by offering employment at low wages (encourages self-selection).
  - Should be phased out as economic activity recovers.
- Temporary public-sector employment programs:
  - Not cost-effective as long-term strategy; participation does not favorably affect future employment prospects and skills are often not transferable to the private sector.
  - Risk of political pressure to convert temporary jobs into permanent positions.
- Large public sector risks:
  - Tends to crowd out private employment and generate large fiscal costs.
  - Public-sector jobs can pay more for unskilled workers than private sector, creating a pool of applicants and higher private sector wage demands with negative aggregate employment effects; particularly relevant in the MENA region.

*Source: _061512 - 20.      Three caveats should be kept in mind when assessing the implications of the (IMF PDF excerpt).*

### 34.      Policies to boost labor supply are generally desirable in the medium and long

### _061512 - 34.      Policies to boost labor supply are generally desirable in the medium and long

### Overview: objectives and channels
- Policies to boost labor supply are generally desirable in the medium and long term; policies that improve job matching are needed also in the short term.
- Increasing labor supply—in the form of both higher labor-force participation and longer working hours—can:
  - spur economic growth;
  - contribute to fiscal consolidation by expanding the tax base and reducing social spending;
  - offset some effects of population aging.
- Some supply-oriented reforms can also boost employment in the short run by improving labor-market functioning and reducing structural unemployment (e.g., training programs, strengthened job-search requirements).

### Labor supply responses and market complementarities
- Labor supply reforms typically have gradual effects as people adjust participation and hours.
- Policies that increase labor supply require wages to adjust to actually raise employment; absorption by demand depends on the pace of economic growth.
- The effectiveness of supply policies depends on the flexibility of labor, capital, and product markets; complementarities with reforms in these markets may be needed.
- Cross-country evidence: employment in the United States tends to be more responsive to increases in labor force participation rates than in Europe (Wasmer, 2009).

### Taxation: effects, elasticities, and reform options
- Marginal versus average tax wedges:
  - Marginal tax wedges are generally higher than average tax wedges, reflecting the progressivity of most income tax systems.
- Typical estimated wage elasticities of labor supply:
  - Micro studies: between 0.2 and 0.3 (on average over different income groups).
  - Macro studies: around 0.5.
- Quantified example:
  - A 10 percentage point higher after-tax wage—for example due to a reduction in the personal income tax rate by 6 percentage points10—would raise total labor supply by 2 to 5 percent.
- Tax wedges and unemployment:
  - Bassanini and Duval (2006): a 10 percentage point higher labor tax wedge in OECD countries would raise structural unemployment by an average of 2.8 percentage points.
- Policy implications and options:
  - Revenue-neutral tax reforms can mitigate labor supply distortions where fiscal constraints limit tax cuts.
  - Tax base broadening cum rate reduction may improve labor supply incentives with modest distributional implications if deductions reduced primarily affect higher-income groups.
  - Progressive income tax schedules can reduce tax wedges for low-skilled workers where distortions are largest.
  - Limits exist on taxing high-income earners due to evasion and underreporting concerns.

### Targeted tax relief: groups and rationale
- Targeting tax relief to groups with higher labor supply elasticities can reduce distortions; three salient groups:
  - Women/secondary earners:
    - Female labor supply is more responsive to taxes than male labor supply.
    - Options: higher tax exemption for women (where legal), targeting single parents, replacing family taxation with individual taxation to reduce high tax wedges for secondary earners.
  - Older workers:
    - Older workers are more sensitive to financial incentives than younger workers.
    - Examples of policy: specific earnings tax credits for older workers (Australia, Denmark, the Netherlands, Sweden).
  - Low-skilled workers:
    - Labor supply elasticities for low-skilled men are larger than for high-skilled men.
    - Rationale for targeted “in-work” tax credits for low-wage earners; more than half of advanced economies have introduced such credits.

### Box 5 — In-Work Tax Credits and Benefits: design, effects, and constraints
- Purpose: stimulate labor force participation and provide income support for low-wage earners.
- Design features and trade-offs:
  - In-work credits reduce net tax liability and are usually phased out as income rises.
  - If phased out with family income, can create high marginal tax rates for both partners and adverse labor supply effects for secondary earners.
  - If phased out with individual income, can better emphasize labor-market participation.
  - Sometimes combined with hours-worked criteria to avoid income support for high-skilled part-time workers.
- Potential adverse effects:
  - Increased labor supply may reduce low-skilled wages, shifting incidence to employers.
  - U.S. evidence suggests net gain of the earned income tax credit for low-skilled workers is only 30 percent per dollar spent (Rothstein, 2010).
- Empirical evidence:
  - Evaluation studies in the United Kingdom and the United States find positive net employment effects, but small in aggregate because credits apply to a small portion of the labor force and phase-outs discourage longer hours.
- Administrative considerations:
  - In-work credits are most appropriate where tax administration is strong and withholding is used.
  - Costs can be substantial where taxpayers do not file returns, withholding is weak, or schemes extend to the self-employed.
  - In the United States, self-assessment basis leads to non-compliance and false claims.

### Social benefits and activation: reducing disincentives
- Passive benefits dilute incentives to return to employment; activation policies (ALMPs) can reduce disincentives and improve job prospects.
- Quantified effects:
  - OECD example: a 10 percentage point higher benefit replacement rate would result in a 1 percentage point higher structural unemployment rate (Bassanini and Duval, 2006).
- Participation tax rates and means-tested benefits:
  - Participation tax rates (proportion of gross in-work income lost through taxes and decreased benefits on entering the labor force) equal or exceed 100 percent for one-earner families in nine OECD countries, with most of this “tax” from withdrawal of social benefits.
- Policy options to redesign social benefits:
  - Tighten eligibility criteria, reduce duration of benefits, and/or decrease benefit levels where high—while maintaining protection against poverty.
  - Attach conditions to benefits (e.g., in-work benefits, participation in ALMPs) to balance insurance and incentives.
  - Coordinate reforms across unemployment, disability, and early retirement benefit systems to avoid substitution between exits from employment.

### Eligibility, enforcement, and benefit levels
- Eligibility and enforcement:
  - Limit unemployment insurance eligibility to those with sufficient contributions and employment history; condition continued eligibility on participation in ALMPs.
  - Disability benefits: require stringent medical and work-capacity evaluations by independent evaluators; integrate partial-capacity individuals into unemployment systems and ALMPs (examples: Australia, the Netherlands).
  - Increasing the age for full pension benefits can delay exit from the labor force.
- Benefit duration and levels:
  - Krueger and Meyer (2002): a 10 percent increase in unemployment benefits raises average duration of unemployment by around 5 percent.
  - Example calculation: for economies with replacement rates above 50 percent, a reduction to the average of 42 percent would decrease the duration of unemployment by 8 percent.
  - Replacement rates for low-income households should remain sufficiently high to avoid pushing households into poverty.

### Family benefits, childcare, and female labor supply
- Parental leave and child allowances:
  - Publicly financed maternal/parental leave with job-return guarantees can keep mothers connected to the labor market, but very long paid leave can harm future employment prospects.
  - High child allowances reduce incentives for women to enter the labor market, especially those with low earnings capacity.
  - Reducing benefits for older school-aged children and linking benefits to labor force participation can increase re-entry incentives.
- Childcare subsidies:
  - Reviews (Gong and others, 2010; Kalb, 2009) find elasticity of female labor supply with respect to price of childcare usually between –0.13 and –0.2.
  - If subsidies reduce the price of childcare by 50 percent, labor supply of young mothers will rise by between 6.5 and 10 percent.

*Source: IMF staff analysis in the provided chapter content.*

### 44.      Reforms to the structure of benefits can help offset labor market disincentives.

### 44.      Reforms to the structure of benefits can help offset labor market disincentives.

### Unemployment benefits — findings and reform options
- Structuring unemployment benefits so that they decline over time motivates workers to undertake more intensive job search.
- Initial replacement rates should be set below full replacement to reduce incentives to enter unemployment, but high enough to facilitate an initial period of intensive job search aimed at improving job match quality and thus worker productivity.
- Increased use of individual unemployment savings accounts could help to reduce the incidence and duration of unemployment. Under this system:
  - part of the unemployment insurance contribution is credited to an individual account on which a person receives interest;
  - during a period of unemployment, individuals can draw money from their account;
  - once the account is exhausted, individuals can borrow from the government at the same interest rate.
- Individual accounts are used in a number of emerging economies, including Brazil and Chile.
- Individual accounts could be combined with layoff taxes or “experience rating,” whereby firms with higher layoffs in a previous year face higher unemployment contribution rates.
- Countries could be encouraged to use experience rating instead of employment protection legislation to reduce incentives for layoffs.

- Key numeric indicators presented in the source:
  - Average Replacement Rate =  52
  - Average Duration = 15.4

### Pension benefits — findings and reform options
- Insufficient adjustment of pension benefits for early and late retirement often makes it financially beneficial to retire as early as possible, resulting in effective retirement ages well below official retirement ages in many countries.
- Features that create an implicit tax on continued work include:
  - individuals often can draw a pension only once they stop working (or must pass an earnings test to draw a pension);
  - additional years of pension contributions beyond the official retirement age not resulting in higher benefits.
- Adjusting pension benefits for early and late retirement to make them actuarially neutral can reduce distortions and increase employment rates among older age groups.
- Empirical estimate: moving to an age-neutral pension scheme in a group of 15 OECD countries would increase participation rates of older male workers by roughly 5 percentage points.
- Labor supply disincentive effects of pension systems can also be reduced through increased reliance on defined contributions schemes with a strong link between contributions and benefits.

### Experience rating (Box 6) — role and evidence
- Problem: Unemployment insurance (UI) with uniform payroll taxes can result in excess layoffs and employment instability because uniform tax rates entail a cross-subsidy from low- to high-layoff firms.
- Experience rating (ER) links the UI premium a firm pays to its historical layoffs; in a fully experience-rated system the firm bears the entire additional insurance cost of increasing its layoffs.
- Partial ER (e.g., with lower and upper bounds on premiums) may be optimal if layoffs are initially excessive because firms are risk-averse or credit constrained.
- Empirical evidence:
  - U.S. studies find temporary layoffs are inversely correlated with the degree of experience rating (Topel, 1983; Baicker, Goldin, and Katz, 1997).
  - ER dampens labor turnover, stabilizes employment, and reduces UI claims (Anderson and Meyer, 1994, 2000).
- Cross-country variation:
  - The U.S. system has a significant component of firm-specific ER.
  - Firm-specific ER exists in some European countries (e.g., penalties for permanent collective dismissals in Italy; layoffs of older workers in France and Germany).
  - Sector-specific schemes exist in a limited way (e.g., Finland and the Netherlands) where unemployment benefits are partly financed through sector-specific funds.

### Designing fiscal policies to strengthen employment — key criteria
- Short- and medium-term objectives:
  - Immediate priority where unemployment has risen sharply is to restore labor demand.
  - Countries with high cyclical unemployment should limit policy measures that depress demand.
  - Measures to tackle high natural rates of unemployment (e.g., ALMPs to improve matching) are immediate priorities.
  - Measures to foster higher labor force participation have lower short-run impact on employment and may increase measured unemployment initially, but need not be delayed.
- Fiscal constraints:
  - Countries with tight fiscal constraints should prioritize budget-neutral or budget-saving reforms (e.g., revenue-neutral shifts to mitigate labor tax wedge; expenditure reforms to limit benefits disincentives).
  - Targeted programs tend to have lower fiscal costs and be more cost effective.
- Cost effectiveness varies by country and program scale; hiring subsidies can lose effectiveness when expanded beyond target groups.
- Complementary labor market reforms enhance fiscal policy effectiveness (e.g., wage flexibility, product and capital market reforms).
- Equity goals:
  - Reforms should try to mitigate trade-offs between employment and equity (e.g., in-work tax credits and benefits, ALMPs).
  - Many reforms that strengthen incentives to work—such as reducing the level of unemployment benefits—tend to increase wage dispersion but may raise employment for low-income workers, offsetting household-level equity effects.

### Reducing unemployment — policy recommendations
- Reduce non-wage labor costs; tax shifts are particularly attractive in Eurozone countries with high unemployment and large trade deficits.
- Expand ALMPs where unemployment spells are long and rising, especially where current ALMP spending is relatively low (examples: Baltic States, Greece, Slovak Republic).
- Redirect ALMP spending away from public sector jobs toward more effective programs (job-search assistance, wage subsidies, training) in countries such as Belgium, Denmark, and Poland.
- Scale up training, apprenticeship, and job search assistance programs in countries with high unemployment (Estonia, Greece, Ireland, Portugal, Slovak Republic, Spain) to:
  - improve labor market prospects of the unemployed;
  - keep them attached to the labor market and maintain or improve work skills;
  - avoid cyclical unemployment turning into higher structural unemployment.
- Redesign unemployment benefits:
  - Consider shorter duration of benefits in Belgium and Iceland.
  - Tighten eligibility criteria in the Czech Republic and Denmark.
  - Strengthen job-search requirements in Italy and Sweden.
  - Better use sanctions on non-compliant recipients and compulsory participation in activation programs in several countries.
  - Note: Replacement rates are relatively high in Denmark and the Netherlands.
- Reduce youth unemployment with comprehensive packages addressing skills, on-the-job training access, hiring/firing regulations, and high minimum wages for youth; complement with fiscal policies (job-search assistance, targeted study-and-work programs, tailored wage subsidies). Benefits for unemployed youth should be conditional on program participation.
- Lower the tax wedges facing low-skilled workers to boost employment:
  - Targeted reductions in employer social security contributions, especially for low-wage earners where the link with benefits is weak.
  - Greater use of in-work tax credits; at least 14 advanced economies apply in-work tax credits.
  - Lower marginal tax rates for low-wage earners where flat income taxes and low basic allowances make the system regressive.

### Reforms in emerging economies — considerations
- High unemployment often reflects poor functioning of labor, product, and capital markets; first-best response is regulatory reform rather than fiscal policies.
- Given limited social benefits, fiscal reforms have a modest role but improved ALMPs and reduced tax wedges can help.
- Transform short-term workfare programs (e.g., Employment Guarantee Schemes) into effective ALMPs focused on skills and private-sector job placement.
- Administrative capacity constraints in many emerging economies limit ALMP implementation; use of private sector providers, NGOs, religious institutions, and competitive bidding for training providers has had success (examples: Peru, Argentina, Colombia, Mexico, Thailand).
- Integrate ALMPs with unemployment insurance where possible; learn from reforms in Brazil, Chile, and Romania.

### Increasing labor force participation — policy recommendations
- General reforms to spur participation, with particular focus on women and older workers:
  - Reduce the labor tax wedge; highest in Europe where they exceed 45 percent in Austria, Belgium, France, Germany, Italy and Hungary.
  - Strengthen actuarial links in social insurance (e.g., defined contribution or notional contribution schemes for pensions; individual savings accounts for unemployment insurance).
- Increase female labor force participation through:
  - Reducing the secondary earner tax wedge (relevant where family taxation applies, e.g., France, Portugal, United States) or lowering marginal tax rates/targeted in-work tax credits for secondary earners.
  - Reform child support: replace unconditional income support to families with child-targeted support for those in work (e.g., childcare subsidies for working mothers, currently relatively low in Austria, Ireland, Japan, Korea, and Portugal).
  - Curtail the duration of paid parental leave benefits where excessively long; current duration exceeds 100 weeks in Austria, the Czech Republic, Finland, France, Norway, Poland, and the Slovak Republic.

*Source: IMF chapter — Reforms to the structure of benefits can help offset labor market disincentives.*

### 54.      Policy reforms could raise labor force participation among those 55 and older.

### 54.      Policy reforms could raise labor force participation among those 55 and older.

### Policies to expand elderly participation — summary of reforms
- Increase effective retirement ages:
  - Options: (i) increasing statutory retirement ages, noted as especially low in some Eastern European countries (particularly for women) as well as in France, Greece, and Korea; and (ii) fully adjusting pension benefits in several countries to a level that is “actuarially fair”―the neutral benchmark under which no participation distortion occurs.
- Tougher rules for disability benefits and greater allowance for partial disability:
  - Participation in disability benefit programs exceeds 10 percent of the labor force in Hungary, Norway, and Sweden.
  - Link disability benefits to work capacity and integrate those with greater capacity into the labor market to increase labor force participation.
  - Strengthen medical assessment rules in Denmark, Norway, and the United States, e.g., by requiring certification from independent medical staff.
  - Greater emphasis on linking benefits to the work capacity of claimants could increase elderly labor force participation in Austria, Belgium, and Portugal.
  - Strengthening the attachment of disability claimants to the labor force through integration into ALMPs could help in Greece, Ireland, and Portugal.

### Tax wedges, social insurance expansion, and emerging economies
- One of the most important challenges in emerging Europe and Latin America in boosting labor force participation is to reduce tax wedges, especially as social insurance is expanded to a larger share of the work force.
- Expansion of social insurance should be based on programs that involve lower tax wedges and fewer labor market distortions than those prevalent in many economies.
- Broader coverage of unemployment benefits could be in the form of individual accounts; examples given: Brazil and Chile. These schemes provide a safety net for workers with minimal adverse labor-market incentives.

### Pension reforms in emerging economies
- Reforms should focus on increasing normal pension ages to at least 65 years for both men and women.
  - This would entail an increase in retirement ages in many emerging economies but still maintain them below that of advanced economies with longer life expectancies.
- Given high levels of labor market informality and low rates of coverage, countries could consider expanding social pensions for low-income workers, financed from general revenues.

### Table 4 — Summary: Fiscal Policy Reforms to Increase Labor Force Participation (selected entries)
- Reduce the labor tax wedge:
  - Advanced Economies: Austria, Belgium, Estonia, Finland, France, Germany, Greece, Italy, and Sweden
  - Emerging Economies: Colombia, Egypt, Hungary, Latvia, Lithuania, and Romania
- Expand the use of individual accounts for social insurance benefits:
  - Advanced Economies: Most emerging economies (table entry under Advanced Economies reads "Most emerging economies")
  - Emerging Economies: (table entry under Emerging Economies blank for this row)
- Reduce the secondary earner tax wedge:
  - Advanced Economies: Austria, Belgium, Czech Republic, France, Germany, Italy, and Slovak Republic
  - Emerging Economies: Hungary and Turkey
- Increase child care subsidies:
  - Advanced Economies: Austria, Ireland, Japan, Korea, Portugal, Slovak Republic, and United States
  - Emerging Economies: (no specific emerging-country list in that row)
- Condition child support on labor force participation:
  - Advanced Economies: Many advanced economies
  - Emerging Economies: Most emerging economies
- Reduce the duration of paid parental leave:
  - Advanced Economies: Austria, Czech Republic, Estonia, Finland, France, Germany, Norway, Slovak Republic, and Sweden
  - Emerging Economies: Bulgaria, Hungary, Kazakhstan, and Poland
- Increase effective retirement ages:
  - Advanced Economies: Many advanced economies
  - Emerging Economies: Most emerging economies
- Adjust pension benefits to the actuarially fair levels:
  - Advanced Economies: Belgium, Germany, Norway, and Slovenia
  - Emerging Economies: India and Mexico
- Expand social pensions for low-income workers, financed through general revenues rather than increasing the tax wedge:
  - Advanced Economies: India, Indonesia, and Thailand (entry under Advanced Economies lists these countries)
  - Emerging Economies: (table structure lists these under Emerging Economies column for the row “Expand social pensions…”)
- Strengthen medical assessment rules:
  - Advanced Economies: Australia, Denmark, Finland, Germany, Ireland, New Zealand, Norway, Sweden, United Kingdom, and United States
  - Emerging Economies: (no specific emerging-country list in that row)
- Greater emphasis on linking benefits to work capacity of claimants:
  - Advanced Economies: Austria, Belgium, Czech Republic, Finland, Germany, Netherlands, Portugal, Slovak Republic, Spain, and Sweden
  - Emerging Economies: Mexico and Poland
- Strengthen work incentives and support:
  - Advanced Economies: Czech Republic, Greece, Ireland, Italy, Korea, New Zealand, Portugal, Slovak Republic, and United States
  - Emerging Economies: Mexico

Notes from the table:
- Footnote 1: For countries with male labor force participation rate lower than 85 percent.
- Footnote 2: For countries with female labor force participation rate lower than 70 percent.
- Note: Based on information from Appendix 2. In many cases, data are not available for the full set of emerging economies.

*Source: _061512 - 54.      Policy reforms could raise labor force participation among those 55 and older.*

### Appendix Table 7

### Appendix Table 7. Unemployment Benefits in Advanced Economies

### Data definitions and notes
- Sources: OECD, Eurostat, SSA and staff estimates based on Social Security Programs Throughout the World.
- Full-rate equivalent (FRE) is defined as: FRE = Duration of leave in weeks * average payment (as per cent of average wage earnings) received by the claimant.
- Each component of the OECD eligibility indicator is given a score between 1 (least strict) and 5 (most strict); the overall indicator is the weighted average of the individual components. These indicators were constructed in "Eligibility Criteria for Unemployment Benefits" OECD Social, Employment and Migration Working Papers No. 131.
- Shading identifies countries that are in the top-third of the advanced country group in terms of spending and benefit generosity, and the bottom-third in terms of strictness of eligibility criteria.
- Table columns (as presented): Spending 2007 (Percent of GDP); Spending 2009 (Percent of GDP); Contribution Requirement (Months); Maximum Duration (Months); Average Replacement Rate; Full Rate Equivalent (Months); OECD Score on Eligibility Criteria — Total; Entitlement Conditions; Job search and Availability; Job search Monitoring; Sanctions.

### Key aggregate statistics (preserve values exactly as presented)
- Average:
  - Spending 2007 (Percent of GDP): 0.8
  - Spending 2009 (Percent of GDP): 1.7
  - Contribution Requirement (Months): 9.4
  - Maximum Duration (Months): 16.5
  - Average Replacement Rate: 51.8
  - Full Rate Equivalent (Months): 9.1
  - OECD Score on Eligibility Criteria — Total: 3.2
  - Entitlement Conditions: 3.0
  - Job search and Availability: 3.3
  - Job search Monitoring: 3.1
  - Sanctions: 3.2

- Advanced Europe (aggregate):
  - Spending 2007 (Percent of GDP): 0.9
  - Spending 2009 (Percent of GDP): 1.7
  - Contribution Requirement (Months): 11.0
  - Maximum Duration (Months): 18.1
  - Average Replacement Rate: 52.7
  - Full Rate Equivalent (Months): 10.8
  - OECD Score on Eligibility Criteria — Total: 3.2
  - Entitlement Conditions: 3.1
  - Job search and Availability: 3.4
  - Job search Monitoring: 3.1
  - Sanctions: 3.4

- Other Advanced (aggregate):
  - Spending 2007 (Percent of GDP): 0.5
  - Spending 2009 (Percent of GDP): ...
  - Contribution Requirement (Months): 5.0
  - Maximum Duration (Months): 11.2
  - Average Replacement Rate: 45.3
  - Full Rate Equivalent (Months): 3.2
  - OECD Score on Eligibility Criteria — Total: 2.9
  - Entitlement Conditions: 2.8
  - Job search and Availability: 2.9
  - Job search Monitoring: 3.5
  - Sanctions: 2.4

### Selected country-level examples (values preserved exactly)
- Denmark:
  - Spending 2007 (Percent of GDP): 1.9
  - Spending 2009 (Percent of GDP): 2.1
  - Contribution Requirement (Months): 12.1
  - Maximum Duration (Months): 24.0
  - Average Replacement Rate: 90.0
  - Full Rate Equivalent (Months): 43.2
  - OECD Score on Eligibility Criteria — Total: 2.8
  - Entitlement Conditions: 2.0
  - Job search and Availability: 4.1
  - Job search Monitoring: 2.0
  - Sanctions: 3.0

- Spain:
  - Spending 2007 (Percent of GDP): 2.1
  - Spending 2009 (Percent of GDP): 3.7
  - Contribution Requirement (Months): 12.0
  - Maximum Duration (Months): 24.0
  - Average Replacement Rate: 62.5
  - Full Rate Equivalent (Months): 15.0
  - OECD Score on Eligibility Criteria — Total: 3.6
  - Entitlement Conditions: 4.0
  - Job search and Availability: 3.5
  - Job search Monitoring: 3.0
  - Sanctions: 3.8

- United States:
  - Spending 2007 (Percent of GDP): 0.3
  - Spending 2009 (Percent of GDP): ...
  - Contribution Requirement (Months): 4.7
  - Maximum Duration (Months): 22.8
  - Average Replacement Rate: 53.3
  - Full Rate Equivalent (Months): 3.2
  - OECD Score on Eligibility Criteria — Total: 3.1
  - Entitlement Conditions: 3.5
  - Job search and Availability: 2.0
  - Job search Monitoring: 2.0
  - Sanctions: 5.0

### Observations evident from the table
- Cross-country heterogeneity is large across all measured dimensions: spending (2007 and 2009), contribution requirements, maximum duration, replacement rates, and full-rate equivalents.
- OECD eligibility scores vary across countries on all subcomponents (Entitlement Conditions; Job search and Availability; Job search Monitoring; Sanctions), yielding different overall strictness levels.
- Some advanced countries report notably high replacement rates and long effective benefit generosity (e.g., Denmark: Average Replacement Rate 90.0; Full Rate Equivalent (Months) 43.2), while others show low spending and limited duration (e.g., United Kingdom: Spending 2007 0.2; Maximum Duration (Months) 6.1; Full Rate Equivalent (Months) 0.5).

*Source: Appendix Table 7 — Unemployment Benefits in Advanced Economies (PDF content provided).*

### Appendix Table 15. Family Be

### Appendix Table 15. Family Benefits in Emerging Economies

### Key cross-country statistics and averages (from table)
- Average (all listed countries):
  - Total Spending in 2007 (Percent of GDP): 0.9
  - Minimum Contribution Maternity (Weeks): 0.2
  - Maternity Total Duration (Weeks): 14.3
  - Maternity Paid Leave (Weeks): 81.2
  - Maternity Full-Rate Equivalent (Weeks): 29.1
  - Parental Minimum Contribution (Weeks): 31.3
  - Parental Paid Leave (Weeks): 16.8
  - Parental Duration if Student (Years): 30.0
  - Parental Duration Non Student (Years): 18.7
  - Means Tested (=1): 15.6
  - Average Benefit (Percent Average Wage): 0.7
  - Child Benefits Total Spending in 2007 (Percent GDP): 0.0
  - Parental Benefits 2010/11 Duration of Student (Years): 1.7
  - Parental Benefits 2010/11 Duration Non Student (Years): 19.2
  - Child Benefits 2010/11 Total Childcare Benefits Spending in 2007 (Percent of GDP): 15.7
  - (Final numeric column): 0.6

- Emerging Europe (regional aggregates):
  - Total Spending in 2007 (Percent of GDP): 1.6
  - Minimum Contribution Maternity (Weeks): 0.3
  - Maternity Total Duration (Weeks): 10.1
  - Maternity Paid Leave (Weeks): 125.3
  - Maternity Full-Rate Equivalent (Weeks): 50.9
  - Parental Minimum Contribution (Weeks): 42.1
  - Parental Paid Leave (Weeks): 12.9
  - Parental Duration if Student (Years): 55.4
  - Parental Duration Non Student (Years): 20.6
  - Means Tested (=1): 16.7
  - Average Benefit (Percent Average Wage): 0.6
  - Child Benefits Total Spending in 2007 (Percent GDP): 0.1
  - Parental Benefits 2010/11 Duration of Student (Years): 2.5
  - Parental Benefits 2010/11 Duration Non Student (Years): 21.1
  - Child Benefits 2010/11 Total Childcare Benefits Spending in 2007 (Percent of GDP): 17.0
  - (Final numeric column): 0.6

- Other Emerging (regional aggregates):
  - Total Spending in 2007 (Percent of GDP): 0.4
  - Minimum Contribution Maternity (Weeks): 0.1
  - Maternity Total Duration (Weeks): 16.7
  - Maternity Paid Leave (Weeks): 15.0
  - Maternity Full-Rate Equivalent (Weeks): 16.0
  - Parental Minimum Contribution (Weeks): 15.0
  - Parental Paid Leave (Weeks): 18.9
  - Parental Duration if Student (Years): 15.6
  - Parental Duration Non Student (Years): 16.9
  - Means Tested (=1): 14.4
  - Average Benefit (Percent Average Wage): 0.8
  - Child Benefits Total Spending in 2007 (Percent GDP): 0.0
  - Parental Benefits 2010/11 Duration of Student (Years): 0.9
  - Parental Benefits 2010/11 Duration Non Student (Years): 17.3
  - Child Benefits 2010/11 Total Childcare Benefits Spending in 2007 (Percent of GDP): 14.4
  - (Final numeric column): 0.5

- Selected country examples (values preserved exactly as in table):
  - Argentina:
    - Total Spending in 2007 (Percent of GDP): 0.6
    - Parental Benefits 2010/11 Duration Non Student (Years): 18.0
  - Brazil:
    - Total Spending in 2007 (Percent of GDP): 0.6
    - Parental Paid Leave (Weeks): 0.0
    - Parental Duration Non Student (Years): 14.0
  - Bulgaria:
    - Total Spending in 2007 (Percent of GDP): 2.0
    - Maternity Paid Leave (Weeks): 27.0
    - Maternity Full-Rate Equivalent (Weeks): 19.0
    - Parental Paid Leave (Weeks): 52.0
    - Parental Duration if Student (Years): 59.0
    - Parental Duration Non Student (Years): 20.0
    - Means Tested (=1): n.a.
    - Child Benefits Total Spending in 2007 (Percent GDP): 0.8
  - China:
    - Total Spending in 2007 (Percent of GDP): 0.1
    - Parental Paid Leave (Weeks): 0.0
    - Maternity Total Duration (Weeks): 13.0
  - Hungary:
    - Total Spending in 2007 (Percent of GDP): 3.0
    - Minimum Contribution Maternity (Weeks): 0.7
    - Maternity Total Duration (Weeks): 26.0
    - Maternity Paid Leave (Weeks): 160.0
    - Maternity Full-Rate Equivalent (Weeks): 160.0
    - Maternity Full-Rate Equivalent (Weeks) alternative value: 76.1
    - Parental Paid Leave (Weeks): 160.0
    - Parental Duration if Student (Years): 23.0
    - Parental Duration Non Student (Years): 16.0
    - Means Tested (=1): 0.0
    - Average Benefit (Percent Average Wage): 0.1
    - Child Benefits Total Spending in 2007 (Percent GDP): 3.3
  - Poland:
    - Total Spending in 2007 (Percent of GDP): 0.8
    - Minimum Contribution Maternity (Weeks): 0.3
    - Maternity Total Duration (Weeks): 4.0
    - Maternity Paid Leave (Weeks): 174.0
    - Maternity Full-Rate Equivalent (Weeks): 174.0
    - Maternity Full-Rate Equivalent (Weeks) alt: 39.1
    - Parental Paid Leave (Weeks): 174.0
    - Parental Duration if Student (Years): 21.0
    - Parental Duration Non Student (Years): 18.0
    - Means Tested (=1): 1.0
    - Average Benefit (Percent Average Wage): 0.1
    - Child Benefits Total Spending in 2007 (Percent GDP): 1.6

(Note: many country cells in the original table are represented by "..." or "n.a." indicating missing or not applicable data; those entries are preserved as shown.)

### Table sources and definitions highlighted in the appendix
- Sources: OECD, Eurostat, ILO, and staff estimates based on Social Security Programs throughout the World.
- Note: 2007 Spending values for the following list of countries: Australia, Canada, Israel, Japan, Korea, New Zealand, Switzerland, the United States, Thailand, Turkey, and Ukraine.
- Full-rate equivalent (FRE) definition: FRE = Duration of leave in weeks * average payment (as per cent of average wage earnings) received by the claimant.
- Shading in table: indicates countries in the top-third of the emerging country group in terms of benefit generosity, except for child-care benefits where it identifies those with the lowest spending.

---

### Appendix 3 — Regulation, labor-market institutions, and employment: main findings
- Minimum wage legislation:
  - An official minimum wage exists in 21 OECD countries.
  - Levels vary from around 25 percent of the average wage (Korea and Mexico) to almost 50 percent of the average wage (Australia, France and New Zealand).
  - Minimum wages are expected to reduce employment by rationing labor demand for low-paid workers, though some imperfect labor market models challenge this.
  - Empirical studies generally support a negative elasticity of employment to the minimum wage, with little consensus on effect size (Neumark and Wascher, 2011).
  - Significant effects are reported mainly for low-paid employment, increasing as the minimum wage increases.

- Employment protection legislation:
  - Covers dismissal procedures, severance pay, notice periods, and contract rights for temporary workers.
  - In theory: increases firing costs (reducing unemployment inflows) but makes hiring more costly (reducing job creation) — net impact ambiguous.
  - Cross-country regressions using the OECD indicator produce widely varying results.
  - Robust finding: stricter employment protection reduces flows in and out of employment, leading to longer unemployment duration (Young, 2003; OECD, 2004).
  - Employment protection reduces job-finding rates and employment levels of youth, immigrants and women (Martin and Scarpetta, 2011) and tends to favor insiders (prime-aged and older males).

- Flexible contracts:
  - Temporary contracts can circumvent strict employment protection.
  - Evidence indicates employment protection raises the share of temporary contracts in OECD countries (Jaumotte, 2011).
  - Temporary contracts increase labor-market flexibility but tend to be positively correlated with unemployment (Blanchard and Landier, 2002).
  - A dual labor market (strict protection + flexible contracts) may be inefficient for aggregate labor-market performance.
  - Flexible contracts change the mix of temporary and permanent contracts without necessarily affecting overall employment (Garibaldi and Mauro, 2002).

- Product-market regulation:
  - Entry barriers reduce competition and economic activity, lowering labor demand.
  - An OECD indicator of anti-competitive regulations (seven non-manufacturing industries) is typically positively correlated with unemployment (OECD, 2006).

- Labor unions:
  - Unions may raise wages via monopsony power, potentially increasing unemployment.
  - The impact depends on bargaining centralization; full decentralization or full centralization may yield lower unemployment than intermediate coordination (Calmfors and Driffill, 1988).
  - Empirical evidence is inconclusive (Flanagan, 1999); indicators of trade union coordination are generally associated with lower unemployment.
  - Cross-country studies show only weak evidence on the impact of union density or coverage on structural unemployment.

- Housing and mobility:
  - Lack of regional mobility can cause persistent disparities in unemployment and mismatch between supply and demand (Blanchard and Katz, 1992).
  - Oswald (1999) posits homeownership reduces mobility and worsens labor-market outcomes; empirical support is mixed (Battu and others, 2008).
  - Transaction costs in housing (including property transfer taxes) reduce job offer acceptance and increase unemployment duration.
  - Lowering property transaction taxes may help reduce structural unemployment (Van Ewijk and Van Leuvensteijn, 2009).

---

### Appendix 4 — Micro estimates on labor supply elasticities: core points
- Three elasticities:
  - Income elasticity: negative; empirical values between −0.1 and −0.3.
  - Compensated (Hicksian) elasticity: positive (pure substitution effect).
  - Uncompensated (Marshallian) elasticity: net effect of income and substitution effects; theoretically ambiguous. This is the primary focus in the appendix.

- Empirical regularities:
  - Larger responses at the extensive margin (participation vs non-participation) than at the intensive margin (hours worked).
  - Group-specific findings:
    - Married men: generally unresponsive to tax; estimates between 0 and 0.1 (a 10 percent higher net wage increases male labor supply by a maximum of 1 percent).
    - Low-skilled men: larger elasticities often found; participation margin important.
    - Older workers: more responsive to after-tax wages than younger workers (French and Jones 2011); participation margin important due to retirement options.
    - Married women: more elastic labor supply than men; studies suggest elasticity between 0.5 and 1.0, though variation is large and recent studies report smaller elasticities. Participation elasticities exceed hours elasticities.
    - Single persons: elasticities between those for married men and married women; family circumstance matters more than gender.
    - Single mothers: participation elasticity among the highest, often exceeding 1 (evidence from targeted tax credits in the United States and the United Kingdom).

---

### Appendix 5 — Data definitions (select definitions preserved exactly)
- Labor force participation rate: percentage of working age population, aged 15 to 64, either employed or unemployed, actively seeking work, and able to start work. Data sources: OECD for OECD countries; ILO Key Indicators and Eurostat for non-OECD.
- Unemployment rate: percentage of the labor force not employed and actively seeking new work for a country-specific period. Data sources: OECD; ILO Key Indicators; Eurostat; IMF World Economic Outlook for 2010 and 2011 international comparisons.
- Employment rate: percentage of working age population registered as employed. Sources: OECD Labor Force Statistics; Eurostat for EU; ILO for other countries.
- Long-term unemployment: percentage of unemployment persisting for at least one year prior to data collection. Sources: OECD; Eurostat for EU non-OECD.
- Average annual hours worked: hours worked per worker, including part-time and full time employees for an entire work year. Source: OECD Labor Force Statistics.
- Part-time employment: percentage of those employed who work less than 20 hours per week on average. Source: OECD Labor Force Statistics.
- Labor tax wedge: sum of personal income tax and employee plus employer social security contributions together with any payroll tax less cash transfers, expressed as a percentage of total labor costs. Source: OECD Taxing Wages Database; World Bank for non-OECD.
- Income taxes as share of GDP: taxes on income, profits, and capital gains generally levied on categories (i)–(vi) as listed in source text.
- Individual income taxes as a share of GDP: income taxes paid by individuals, not including social security contributions. Source: IMF Tax Revenue Database.
- Corporate income taxes as a share of GDP: income taxes paid by corporations, not including employer social security contributions. Source: IMF Tax Revenue Database.
- Value added taxes as a share of GDP: tax revenues ultimately paid by a consumer for the value added to a product or service at each stage of manufacture or distribution. Source: IMF Tax Revenue Database.
- Social contributions as a share of GDP: social security contributions from employers, employees, self-employed, and all unallocable sources. Source: IMF Tax Revenue Database.
- Personal income tax rate: top rate charged by the federal government on a person’s total income. Source: International Bureau of Fiscal Documentation (IBFD).
- Social security contribution rates: rates at which amounts are gathered by governments from income to cover social expenses like public health insurance and retirement. Source: IBFD.

*Sources: OECD, Eurostat, ILO, and staff estimates based on Social Security Programs throughout the World (as presented in Appendix Table 15 and accompanying appendices).*

### References

### References

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### Childcare, family policy, and labor supply
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### Databases, datasets, and institutional reports
- European Commission, Directorate General for Economic and Financial Affairs and Economic Policy Committee LABREF database http://ec.europa.eu/economy_finance/db_indicators/labref/index_en.htm.
- International Monetary Fund, 2010, World Economic Outlook, April.
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- World Bank, 2011b, The Jobs Crises: The Household and Government Responses to the Great Recession in Eastern Europe and Central Asia.

*Source: _061512 - References*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2012/_061512.pdf_