Labour market performance and migration flows - European ...

European CommissionOccasional Paper 60, Volume I3. National Employment Policies and Labour Markets Reform inAMCsFaced by such daunting challenges and the added pressure the global economic crisis is certain toimpose, it can be stated emphatically that AMC employment policies are not up to these challenges. Acommon element is the dissociation between good performance of macroeconomic indicators and alagging behind in terms of better employment and increased social welfare for different segments of thepopulation (National Background Papers and Middle East Youth Initiative, 2009).A comprehensive employment policy should comprise the following elements: (i) investmentpromotion (mainly related to macroeconomic and sectorial policies) and a friendly businessenvironment for the private sector to encourage job creation; (ii) active labour market policies(ALMPs), direct State intervention in the labour markets to increase the employability of workers; and(iii) labour market regulation. However, the performance of employment policy has to face theconstraints derived, for all AMCs, from the size of first job-seekers unemployment, institutionalrigidities and the extent of the informal sector, which sets a limit on the effect of institutionalregulation and the performance of the labour market. Indeed, the importance of informal employmentover total employed population points to the weak impact of institutions and institutional reforms onthe development of employment and labour market structure. This is a vicious circle that is verydifficult to break: labour reforms are ineffective because of the size of the informal economy, and thelack of effective implementation of labour regulation strengthens informal employment.The other component which should be encouraged in all AMCs is the training-employmentinterface across all education levels and cycles. Any employment policy should, by nature, bearticulated with an education and training policy aiming at increasing the employability of the young.This is at the heart of the failure of the education system both in terms of its internal (school dropouts)and external (lack of integration into the labour market) effectiveness.The situation varies across AMCs, but all of them offer wide scope for employment policyupgrading, both in terms of institutional setting and in terms of instruments. In Jordan, for instance, thework of the Ministry of Labour and its local offices largely centres on issuing work permits to foreignworkers and ensuring compliance with labour regulations. Relatively few efforts and resources aredirected towards the provision of active labour market programs.In other AMCs, it is still not possible to speak of genuine national employment policies as such.The Lebanese Government, for instance, does not have a national employment strategy whichidentifies labour market challenges and tries to address them in a consistent manner. There is aMinistry of Labour (MoL) in Lebanon, but it has a minimal role in developing and engaging innational employment policy. No serious reform program is being currently contemplated. A draftLabour Law was proposed in 1992 and again in 2000 but remains just that, a draft. For this, there are,to date, no Active Labour Market Policies in the country. This situation is a by-product of at least twomain factors: (i) labour market challenges have always been diffused in Lebanon by a ‘passive’ policyof encouraging emigration, as the Lebanese authorities have failed to address, in the last decades, the‘push’ factors that cause Lebanon’s mainly skilled workforce to seek jobs abroad; (ii) Lebanesepolicy-makers have done very little to address the issue of high reservation wages (mostly linked tohigh private educational investments and a high cost of living), which discourage Lebanese workersfrom engaging in low-skilled jobs. Instead, an influx of foreign workers has been encouraged to takeon low-skilled jobs, particularly in the construction and agricultural sectors. Thus, the case of Lebanonbrings to the fore the structural linkage between employment and migration policies. This lack of a52