Labor Intermediation Services: A Review for Latin America and Caribbean Countries

Abstract

Labor intermediation services are used to improve the connection between job seeker and job. They aim not only to get job seekers more quickly into new jobs but also to make a better quality match, getting the more appropriate worker into the right job. Done well, labor intermediation helps reduce short-term unemployment, reduce job rotation, reduce the cost of new hires, improve productivity and firm growth, and importantly, reduce job discrimination. For many years, labor intermediation services were embodied in a single national public employment service that varied in quality and investment. Today, we find a range of public and private intermediation services and a wider range of products and services, including those to link workers to training, self-employment, and social services. This policy brief first examines the characteristics of labor intermediation services, then reviews key reform efforts in developed and Latin America and Caribbean economies, and lays out the principal institutional models or public/private configurations that can be found in these countries. It concludes by providing a series of recommendations and considerations for Latin American and Caribbean countries seeking to reinvigorate or reform labor intermediation services. In particular, the policy brief offers some key considerations for adapting labor intermediation services to the realities of Latin American and Caribbean economies.