Income support systems for the unemployed : issues and options

The report reviews the performance of various income support systems for the unemployed, and provides guidelines for developing and transition economies. It finds that: a) Unemployment insurance enables a high degree of consumption smoothing, performs well under various types of shocks, and acts as an automatic stabilizer. But it also creates reemployment disincentives, and wage pressure which increase the equilibrium unemployment rate, contributing to persistent unemployment. b) Unemployment assistance, while enabling more effective targeting, may not bring savings in comparison to unemployment insurance, and may well prove fiscally unsustainable. c) Unemployment insurance savings accounts, internalize the costs of unemployment benefits, and thus avoid the moral hazard inherent in traditional unemployment insurance, given the weak monitoring capacity of developing countries, an important advantage. d) Public works program is effective in reaching the poor, can attract informal sector workers, and provides flexible, fast responses to shocks. Despite its high non-wage costs, and possible stigmatization of participants, it is found suitable for developing countries, particularly as a complementary program. e) Severance pay offers few advantages - it adversely affects efficiency, produces high litigation costs, and offers limited risk-pooling.Environmental Economics&Policies,Rural Poverty Reduction,Safety Nets and Transfers,Services&Transfers to Poor,Health Economics&Finance

Short-run learning dynamics under a test-based accountability system : evidence from Pakistan

Low student learning is a common finding in much of the developing world. This paper uses a relatively unique dataset of five semiannual rounds of standardized test data to characterize and explain the short-term changes in student learning. The data are collected as part of the quality assurance system for a public-private partnership program that offers public subsidies conditional on minimum learning levels to low-cost private schools in Pakistan. Apart from a large positive distributional shift in learning between the first two test rounds, the learning distributions over test rounds show little progress. Schools are ejected from the program if they fail to achieve a minimum pass rate in the test in two consecutive attempts, making the test high stakes. Sharp regression discontinuity estimates show that the threat of program exit on schools that barely failed the test for the first time induces large learning gains. The large change in learning between the first two test rounds is likely attributable to this accountability pressure given that a large share of new program entrants failed in the first test round. Schools also qualify for substantial annual teacher bonuses if they achieve a minimum score in a composite measure of student test participation and mean test score. Sharp regression discontinuity estimates do not show that the prospect of future teacher bonus rewards induces learning gains for schools that barely did not qualify for the bonus.Tertiary Education,Education For All,Secondary Education,Teaching and Learning,Primary Education

Unemployment benefit systems in Central and Eastern Europe : a review of the 1990s

One of the most conspicuous consequences of the transition of former socialist economies has been the emergence of large-scale, open unemployment - a phenomenon unheard of before the transition. These economies have thus been confronted with the difficult task of protecting the unemployed while avoiding undue fiscal costs and minimizing work disincentives created by such protection. Faced with the prospect of high unemployment, many transition economies introduced traditional, OECD-style unemployment insurance programs. The purpose of this paper is to evaluate those programs by examining their distributive and efficiency effects. To address distributive issues (an aspect so far neglected by researchers), we analyze data from household expenditure surveys and try to answer the following to questions: Which groups of workers benefited most? How have these programs changed the pre-transfer distribution of income? To examine efficiency effects, we review the existing literature. The questions that have received the most attention are: Have unemployment benefits created work disincentives? In particular, have more generous replacement rates and longer benefit durations affected the length of unemployment spells? We also examine whether the introduction of unemployment benefit programs has helped to speed up enterprise restructuring.Labor Markets,Health Monitoring&Evaluation,Social Protections&Assistance,Youth and Governance,Environmental Economics&Policies

The informal sector revisited : a synthesis across space and time

The concept of the informal sector (IS) has recently received widespread and growing attention. Indeed, it may be fair to talk about a re-emergence of the concept in the debate related to social protection and poverty reduction. We argue that with this new found prominence, it is even more important that we better understand the IS. Only with an improved understanding of the issues and dimensions of the IS can we design policies and programs which effectively address the needs of workers engaged in informal sector activities. This paper is an attempt to contribute to such an increased understanding by highlighting important pieces in understanding the concept of the IS across (1) time, briefly discussing how our view of the concept of the IS has evolved over time and (2) space, presenting empirical evidence and stylized features across regions. After presenting the current state of knowledge of the IS, we distill key aspects and issues of the IS and discuss their implications for policy design and implementation, especially in the context of fighting poverty and improving livelihoods of the poor in developing countries.Poverty Assessment,Health Economics&Finance,Environmental Economics&Policies,Legal Products,Urban Partnerships&Poverty

Short-run Learning Dynamics under a Test-based Accountability System: Evidence from Pakistan

Low student learning is a common finding in much of the developing world. This paper uses a relatively unique dataset of five semiannual rounds of standardized test data to characterize and explain the short-term changes in student learning. The data are collected as part of the quality assurance system for a public-private partnership program that offers public subsidies conditional on minimum learning levels to low-cost private schools in Pakistan. Apart from a large positive distributional shift in learning between the first two test rounds, the learning distributions over test rounds show little progress. Schools are ejected from the program if they fail to achieve a minimum pass rate in the test in two consecutive attempts, making the test high stakes. Sharp regression discontinuity estimates show that the threat of program exit on schools that barely failed the test for the first time induces large learning gains. The large change in learning between the first two test rounds is likely attributable to this accountability pressure given that a large share of new program entrants failed in the first test round. Schools also qualify for substantial annual teacher bonuses if they achieve a minimum score in a composite measure of student test participation and mean test score. Sharp regression discontinuity estimates do not show that the prospect of future teacher bonus rewards induces learning gains for schools that barely did not qualify for the bonus

Evaluating Public Per-Student Subsidies to Low-Cost Private Schools: Regression-Discontinuity Evidence from Pakistan

This study estimates the causal effects of a public per-student subsidy program targeted at low-cost private schools in Pakistan on student enrollment and schooling inputs. Program entry is ultimately conditional on achieving a minimum stipulated student pass rate (cutoff) in a standardized academic test. This mechanism for treatment assignment allows the application of regression-discontinuity (RD) methods to estimate program impacts at the cutoff. Data on two rounds of entry test takers (phase 3 and phase 4) are used. Modeling the entry process of phase-4 test takers as a sharp RD design, the authors find evidence of large positive impacts on the number of students, teachers, classrooms, and blackboards. Modeling the entry process of phase-3 test takers as a partially-fuzzy RD design given treatment crossovers, they do not find evidence of significant program impacts on outcomes of interest. The latter finding is likely due to weak identification arising from a small jump in the probability of treatment at the cutoff

Harmful Child Labor: A Theoretical And Empirical Analysis

This dissertation comprises of three chapters on the economics of harmful child labor. The first chapter is theoretical. Using household survey data from the Philippines, the second and third chapters examine whether a model assumption and an explanation for a model prediction in the first chapter are supported empirically. In Chapter 1, I model the labor market and welfare effects of banning harmful child labor. The effects are examined in two informational cases: (1) the parent has perfect information on harmful child labor and (2) the parent does not. The effects under both cases are contrasted between when the parent is the welfare evaluator for the household and when the child is, given imperfect parental altruism. Under both informational cases, the ban generates re-equilibrating labor market adjustments that expand employment and reduce wages in the non-harmful child labor market, as well as reduce child labor force participation. Under the first case, the ban is welfarereducing. Under the second case, it is generally welfare-reducing; under special conditions, it can be welfare-improving. Under both informational cases and when the child is the welfare evaluator, a ban is generally welfare-ambiguous; under special conditions, it can be welfare-improving. In Chapter 2, I examine the existence and magnitude of positive compensating wages for harmful child labor. Among the various harmful child labor measures examined, I find consistent evidence of a large and significant earnings premium for physically-strenuous labor at both the conditional mean and median. The result at the conditional mean is largely driven by the large and increasing premia as one moves down the lower half of the conditional earnings distribution. In Chapter 3, proxying the asymmetry in preferences and power statuses between the parent and child by the contradictory response of the parent when the child reports a work injury or illness, I examine whether parent-child injury report mismatches have an impact on the probability of harmful child labor. I find consistent evidence that mismatches have a large and significant positive effect on the probability of harmful child labor

Teacher Performance Pay: Experimental Evidence from Pakistan

This paper presents evidence from the first three years of a randomized controlled trial of a government-administered pilot teacher performance pay program in Punjab, Pakistan. The program offers yearly cash bonuses to teachers in a sample of public primary schools with the lowest mean student exam scores in the province. Bonuses are linked to three school-level indicators: the gain in student exam scores, the gain in school enrollment, and the level of student exam participation. Bonus receipt and size are also randomly assigned across schools according to whether or not the teacher is the school’s head. On average, the program increases school enrollment by 4.1 percent and student exam participation rates by 3.4 percentage points, both in the third year. The analysis does not find that the program increases student exam scores in any year. Mean impacts are similar across program variants. The positive mean impact on school enrollment is mainly seen in urban schools and the positive mean impact on student exam participation rates is only seen in rural schools

Private School Participation in Pakistan

Private schooling is an important feature of the educational landscape in Pakistan and is increasingly a topic of public and government discourse. This study uses multiple rounds of national household sample surveys to examine the extent and nature of private school participation at the primary and secondary levels in Pakistan. Today, one-fifth of children -- or one-third of all students -- go to private school in Pakistan. Private school students tend to come from urban, wealthier, and more educated households than do government school students and especially out-of-school children. Important differences exist across Pakistan s four provinces with respect to the characteristics of private school students relative to government school students, as well as in the composition of private school students. Private schooling is highly concentrated, with a few districts (situated mainly in northern Punjab province) accounting for most of the private school students. Private school participation among children varies largely from one household to another, rather than within households, and to a greater extent than does government school participation. The spatial patterns of private school supply are often strongly correlated with the spatial patterns of private school participation. In the 2000s, private school participation rates grew in Punjab, Sindh, and Khyber Pakhtunkhwa provinces and across socioeconomic subgroups, contributing in particular to the growth in overall school participation rates for boys, children from urban households, and children from households in the highest wealth quintile. Nevertheless, the composition of private school students has become less unequal over time. This trend has been driven mainly by Punjab province, which has seen declines in the shares of private school students from urban households and households in the highest wealth quintile