Can the introduction of a minimum wage in FYR Macedonia decrease the gender wage gap?

This paper relies on simple framework to understand the gender wage gap in Macedonia and then simulates how the gender wage gap would behave after the introduction of a minimum wage. First, it presents a new albeit simple decomposition of the wage gap into three factors: (i) a wage level factor, that measures the extent to which the gender gap is driven by differences in wage levels among low-skilled workers of oppositesex; (ii) an skills endowment factor, that quantifies the extent to which the gender wage gap is driven because the share of high-skilled workers differs by gender; and (iii) returns to education factor, that measures the extent to which the gender gap exists is driven by differences by gender in returns to education. Second, the paper presents simple set of simulations that indicate that the introduction of a minimum wage in Macedonia can contribute to decrease the gender wage gap by up to 23 percent. Nevertheless, in order to get a significant improvement in the wage gap a rather high minimum wage may required, which may contribute to reductions in employment.Labor Markets,,Gender and Development,Labor Policies,Access to Finance

Can the Introduction of a Minimum Wage in FYR Macedonia Decrease the Gender Wage Gap?

This paper relies on a simple framework to understand the gender wage gap in Macedonia, and simulates how the gender wage gap would behave after the introduction of a minimum wage. First, it presents a newâÃÂÃÂalbeit simpleâÃÂÃÂdecomposition of the wage gap into three factors: (i) a wage level factor, which measures the extent to which the gender gap is driven by differences in wage levels among low-skilled workers of opposite sex; (ii) a skills endowment factor, which quantifies the extent to which the gender wage gap is driven by the difference in the share of high-skilled workers by gender; and (iii) returns to education, which measures the extent to which the gender gap is driven by differences by gender in returns to education. Second, the paper presents simple set of simulations that indicate that the introduction of a minimum wage in Macedonia could contribute to decrease the gender wage gap by up to 23 percent. Nevertheless, in order to significantly improve the wage gap, a rather high minimum wage may be required, which may contribute to reductions in employment.Minimum wages; Gender Gap; Wage Differentials; Macedonia

Labor Markets and School-to-Work Transition in Egypt: Diagnostics, Constraints, and Policy Framework

Analysis in this policy note indicates a rapid deterioration in employment opportunities for young individuals transitioning from school to work in Egypt. Despite substantial improvements in labor market outcomes in recent years (in raising employment and participation and in lowering unemployment), unemployment rates in Egypt remain exceedingly high among youth entering the labor market for the first time. A slow school-to-work transition remains the main reason behind high unemployment rates. Young entrants to the labor market have become more educated than ever before: the share of the working-age-population with university education in Egypt has increased significantly between the years 1998 and 2006 (from 14% to 19% among men and from 9% to 14% among women). However, youth are unable to capitalize the time and resources invested in their education as the labor market is not providing enough good-quality jobs for them. To cope with scarce formal jobs, young-educated workers are opting to work in the informal sector and/or withdraw from the labor force, which is contributing to a deadweight loss of recent investments in education. There are three key factors that seem to explain why school-to-job transition remains low in Egypt: investments in the private sector remain low and capital intensive, new graduates are not equipped with the skills demanded by the private sector, and the public sector still provides incentives for educated individuals (mainly women) to queue for private sector jobs. There are several policy options used in the international context to further enhance the performance of the labor market; such as removing obstacles in regulation, enhancing employability of new entrants, reforming the civil service, and designing targeted programs aiming to boost labor demand.Labor markets; Egypt; unemployment; training; labor regulation; school-to-job transition

Key characteristics of employment regulation in the Middle East and North Africa

This note provides a general background of the main features of labor regulation in the Middle East and North Africa (MENA) and benchmarks them against international best practices. The note compiles information on available labor laws and other legal acts concerning employment protection regulation. Within the broader scope of labor regulation, and in order to assure regional comparability, information collected focuses on key issues in the labor law associated with commencing or terminating employment and during the period of employment (including maternity benefits). The main sources the data are the World Bank doing business 2010 and International Labour Organisation (ILO) databank. This note is a tool to provide policymakers and international organizations with a regional diagnose of how labor regulation affects labor market outcomes in MENA and inform client governments about strategic approaches to employment creation through labor policy and reform. This activity comes as a response to regional priorities in the context of the Arab World Initiative (AWI). One of the six strategic themes of the AWI focuses explicitly on employment creation as a top priority. Part of the World Bank's mandate under the AWI is to inform client governments about strategic approaches to employment creation through labor policy and reform.Labor Markets,Labor Policies,Labor Standards,Work&Working Conditions,Labor Management and Relations

Does participation in productive associations signal trust and creditworthiness ? evidence for Nicaragua

This article studies the extent to which participation in productive associations in Nicaragua contributes to increase individuals'access to social programs and credit services. By participating in productive associations, individuals give a good signal to firms and are rewarded with better transactions and more access to the services they provide, ceteris paribus. Estimates using 2005 data indicate that households that participate in productive associations display higher access to credit and to social programs that promote investment. Additionally, participation in productive associations is weakly associated to more favorable credit outcomes among those households that receive loans, such as lower interest rates and a lower probability of wanting more credit than what was accessible to them.Access to Finance,,Corporate Law,Labor Policies,Debt Markets

Do subsidized health programs in Armenia increase utilization among the poor?

This article analyzes the extent to which the Basic Benefit Package (BBP), a subsidized health program in Armenia, increases utilization and affordability of outpatient health care among the poor. The authors find that beneficiaries of the BBP pay approximately 45 percent less in fees for doctor visits (and display 36 percent higher outpatient utilization rates) than eligible users not receiving the BBP. However, even among BBP beneficiaries the level of outpatient health care utilization remains low. This occurs because the program mainly provides discounted fees for doctor visits, but fees do not constitute the main financial constraint for users. The authors estimate suggest that other non-fee expenditures, such as prescription medicines, constitute a more significant financial constraint and are not subsidized by the BBP. As a result, outpatient health care remains expensive even for BBP beneficiaries.Health Monitoring&Evaluation,Health Systems Development&Reform,Health Economics&Finance,Population Policies,Public Sector Expenditure Analysis&Management

Is Social Assistance Contributing to Higher Informality in Turkey?

Although still low for European standards, investments in Social Assistance (SA) transfers in Turkey have been increasing in recent years. The government is expanding access to subsidized health for individuals in the informal sector through a rapid expansion of the Green Card program. Generous non-contributory programs, such as the Green Card, may create perverse incentives for individuals to join or remain in the informal sector as they can access free services without paying taxes and/or contributions, thus potentially being able to get higher “net” labor earnings than in the formal sector. Despite the fact that the Green Card is a large and generous program offered to individuals in the informal sector, empirical analysis in this report does not find an actual impact of the program (or of its rapid expansion) on informality. The reason behind this finding is the existence of a very large differential in wages between formal and informal workers explained by differences worker’s productivity. Low-wage workers facing the possibility to move from the informal sector to the formal sector would have strong incentives to do so even if this would imply losing all SA benefits. As such, the expected monetary and job security gains of having a formal job dominate those of having an informal job even after accounting for SA transfers.Informality, Social Assistance, Green Card, Turkey

Labor Markets and School-to-Work Transition in Egypt: Diagnostics, Constraints, and Policy Framework

Analysis in this policy note indicates a rapid deterioration in employment opportunities for young individuals transitioning from school to work in Egypt. Despite substantial improvements in labor market outcomes in recent years (in raising employment and participation and in lowering unemployment), unemployment rates in Egypt remain exceedingly high among youth entering the labor market for the first time. A slow school-to-work transition remains the main reason behind high unemployment rates. Young entrants to the labor market have become more educated than ever before: the share of the working-age-population with university education in Egypt has increased significantly between the years 1998 and 2006 (from 14% to 19% among men and from 9% to 14% among women). However, youth are unable to capitalize the time and resources invested in their education as the labor market is not providing enough good-quality jobs for them. To cope with scarce formal jobs, young-educated workers are opting to work in the informal sector and/or withdraw from the labor force, which is contributing to a deadweight loss of recent investments in education. There are three key factors that seem to explain why school-to-job transition remains low in Egypt: investments in the private sector remain low and capital intensive, new graduates are not equipped with the skills demanded by the private sector, and the public sector still provides incentives for educated individuals (mainly women) to queue for private sector jobs. There are several policy options used in the international context to further enhance the performance of the labor market; such as removing obstacles in regulation, enhancing employability of new entrants, reforming the civil service, and designing targeted programs aiming to boost labor demand

Is Social Assistance Contributing to Higher Informality in Turkey?

Although still low for European standards, investments in Social Assistance (SA) transfers in Turkey have been increasing in recent years. The government is expanding access to subsidized health for individuals in the informal sector through a rapid expansion of the Green Card program. Generous non-contributory programs, such as the Green Card, may create perverse incentives for individuals to join or remain in the informal sector as they can access free services without paying taxes and/or contributions, thus potentially being able to get higher “net” labor earnings than in the formal sector. Despite the fact that the Green Card is a large and generous program offered to individuals in the informal sector, empirical analysis in this report does not find an actual impact of the program (or of its rapid expansion) on informality. The reason behind this finding is the existence of a very large differential in wages between formal and informal workers explained by differences worker’s productivity. Low-wage workers facing the possibility to move from the informal sector to the formal sector would have strong incentives to do so even if this would imply losing all SA benefits. As such, the expected monetary and job security gains of having a formal job dominate those of having an informal job even after accounting for SA transfers