The COVID-19 pandemic has severely disrupted economies and labour markets in all world regions.
Labour market programmes are a key part of the mix of policy responses that governments have put in place to protect jobs, enterprises and incomes from the fallout of the pandemic. As in previous crises, policy-makers in emerging and developed economies have used labour market policies to deal with immediate labour market deterioration in various ways: to speed up return to work, adapt skills, facilitate workforce reallocation and cushion temporary income losses after unemployment spells. However, in contrast with past downturns, in this crisis labour market institutions have had to deal not only with a fall in aggregate demand, but also with the effects of lockdown restrictions and physical distancing measures aimed at slowing the spread of the coronavirus.
International empirical evidence shows that employment services are one of the most cost-effective active labour market interventions aimed at facilitating labour market transitions for workers and enterprises. Since the global economic and financial downturn of 2008–09, public employment services (PES) have become an important point of access for jobseekers, workers and employers to a range of passive and active labour market support mechanisms. In the current crisis, PES operations have been of critical importance in assisting workers and employers dealing with redundancies, furloughs or reduced work schedules.
Labour market policies and programmes have been critically important in assisting workers and employers to deal with redundancies, furloughs or reduced work schedules as a result of COVID-19.
The COVID-19 crisis has severely disrupted economies and labour markets in all world regions, with estimated losses of working hours equivalent to nearly 400 million full-time jobs in the second quarter of 2020, most of which are in emerging and developing countries, according to ILO estimates (ILO, 2020a). Income compensation and active labour market policies (ALMPs) are key elements of the policy-maker’s toolbox in addressing the challenges posed by the crisis. Often delivered through public employment services (PES), labour market policies and programmes have been central to cushioning redundancies, preserving jobs and skills, facilitating employment in essential production and services, and keeping people connected to the labour market, including disadvantaged workers in the informal economy and new forms of employment.
Prior adoption of technology and the ability to adjust quickly facilitated the capacity of PES to respond effectively and maintain services during the containment period. PES that had invested in technology for service delivery prior to this crisis and those with a clear digital transformation strategy could rely on remote delivery channels to ensure service continuity during full or partial lockdown. In addition to technology based delivery, flexibility in reorganizing operations and partnerships has contributed substantially to boosting the capacity of PES to cope with both the sudden surge in demand for critical services and the disruptions associated with measures to control the pandemic. Critical services maintained in local labour markets have included the processing of unemployment insurance claims, referrals to welfare support, and enhanced matching services to sectors still actively recruiting amid the pandemic.
Active labour market support is likely to be more effective when delivered as an integrated package.
The COVID-19 crisis is likely to have lasting impacts on jobs, enterprises and skills, making it more challenging for employers and workers to navigate the labour market in the ensuing recession, particularly in economies with large informal labour markets. A stronger connection between policy measures to ensure business continuity, active labour market support and social protection systems can help governments prevent more people from falling into poverty and unemployment. While job creation measures should be emphasized, support for enterprises of all sizes should be linked to productivity, job and income preservation objectives as well as labour reallocation during recovery.
Governments must actively support the job transitions of displaced workers and groups most at risk of unemployment and discouragement.
Maintaining active labour market programmes and PES funding throughout the recovery period will ensure that services are scaled up sufficiently to facilitate reintegration in employment. Women, youth, migrant workers and older workers, as groups that are often over-represented among the low-skilled and in those sectors hardest hit by the effects of the pandemic, are more likely to find their jobs threatened in the recession induced by COVID-19. Targeted labour market interventions and broader access to PES are critical to maintain the employability and job-readiness of groups experiencing greater vulnerability and job instability. Inclusive and gender-sensitive approaches can accelerate the recovery and encourage labour market participation. Actively involving employers and other relevant partners such as private employment agencies in these processes can facilitate access to jobs.
Chosen excerpts by Job Market Monitor. Read the whole story @ COVID-19: Public employment services and labour market policy responses