GENERATING DEMAND FOR LABOR: ADDRESSING CENTRAL ASIA’S DEMOGRAPHIC AND POLICY CHALLENGES ROBERT S. CHASE, PH.D. LEAD ECONOMIST, WORLD BANK GROUP ASTANA ECONOMIC FORUM MAY 21, 2015 Astana Economic Forum May 21, 2015
Dec 28, 2015
GENERATING DEMAND FOR LABOR:ADDRESSING CENTRAL ASIA’S DEMOGRAPHIC AND POLICY CHALLENGES
ROBERT S. CHASE, PH.D.LEAD ECONOMIST, WORLD BANK GROUPASTANA ECONOMIC FORUMMAY 21, 2015
Astana Economic Forum
May 21, 2015
Foundations: World Development Report (2013) &
“Back to Work: Growing with Jobs in Europe and Central Asia” (2014)
Europe & Central Asia Employment Context: Reform Agenda
• Strongest reform record among middle income regions…
• … with significant variation in implementation speed of reforms
Esto
nia
Hung
ary
Slov
ak R
epub
licPo
land
Latv
iaLi
thua
nia
Bulg
aria
Croa
tiaRo
man
iaFy
r Mac
edon
iaSl
oven
iaTu
rkey
Alba
nia
Geo
rgia
Arm
enia
Mon
golia
Kyrg
yz R
epub
licRu
ssia
n Fe
dera
tion
Mol
dova
Mon
tene
gro
Ukr
aine
Serb
iaKa
zakh
stan
Bosn
ia a
nd H
erze
govi
naAz
erba
ijan
Tajik
ista
nU
zbek
ista
nBe
laru
sTu
rkm
enis
tan
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Doing Business Indicator (Gap to Frontier) Transition Index (EBRD 2012)
Notes: ECA = Europe and Central Asia; LAC = Latin America and the Caribbean; EAP = East Asia and Pacific.
2006 2007 2008 2009 2010 2011 2012 201350
55
60
65
70
75
80
85
90
ECA LAC EAP OECD (EU) OECD (Non-EU)Turkey
Europe & Central Asia Employment Context: Demographics
Source: Back To Work: Growing with Jobs in Europe and Central Asia (2013).
Bulg
aria
Ukr
aine
Geo
rgia
Mol
dova
, Rep
ublic
of
Latv
iaLi
thua
nia
Bela
rus
Russ
ian
Fede
ratio
nCr
oatia
Rom
ania
Esto
nia
Bosn
ia a
nd H
erze
govi
naH
unga
ryPo
land
Serb
iaSl
ovak
iaCz
ech
Repu
blic
Slov
enia
Mac
edon
ia, T
FYR
Arm
enia
Mon
tene
gro
Alba
nia
Azer
baija
nKa
zakh
stan
Turk
eyKy
rgyz
stan
Turk
men
istan
Uzb
ekist
anTa
jikist
an
-20
-10
0
10
20
30
40
50Pe
rcen
t
Older workers will outnumber youth due to:Aging + Low
Fertility + Out-Migration
ECA Countries: Change in 15+ Population 2010 - 2030 (%)
Younger countries also face
demographic pressures:
Out-Migration, youth bulge, and long-run
aging
Preparing Workers for New Jobs – Incentives and barriersRebalancing social protection, work incentives and barriers to labor force participation and
formal employment
BLR
KAZ
KGZ
RUS
TUR
ITA
GRC
ISL
PRTESPARMAZE
BIH
BGR
HRVCZE
ESTGEO
LVA
LTU
MKD
MDAPOL
ROM
SVK
SVNDEU
BELDNK
LUX
NORALB
HUN
MNE
SRBUKR
GBR
SWE
AUT
FIN
IRL
NLD
BA
RR
IER
S
-1
-1/2
s.d
.
me
an
+1
/2 s
.d.
+
1
-1 -1/2 s.d. mean +1/2 s.d. +1
DISINCENTIVES
Low Middle High
Social Protection IndexBLUE GREEN RED
low high
low
hi
gh
low disincentives low barriers
low disincentives high barriers
high disincentives low barriers
high disincentives high barriers
Source: Back To Work: Growing with Jobs in Europe and Central Asia (2013).
Preparing Workers for New Jobs – Labor MobilityMany workers fail to move to areas with higher job creation potential
Percentage of adult (18+) population who moved to a different city in the last 20 years
Source: Back To Work: Growing with Jobs in Europe and Central Asia (2013).
France
Kyrgyzs
tan
Sweden
Germany
Kazakh
stan
Latvi
a
Armenia
Azerb
aijan
Belarus
Russia
Bosnia
Ukraine
Moldova
Kosovo
Hungary
PolandIta
ly0%
10%
20%
30%
40%
50%
60%
70%
11
Diverse Jobs-centered policy agenda:Overall Objectives
Rebalancing the work-social protection pillars of the growth and social model• Transition (modernization) legacy – Advancing reforms,
economic integration and diversification• Facilitate firm entry/exit• Create enabling environment for businesses for high potential to thrive and
create jobs and for others to “fail fast, fail cheap”
• Aging and demographic imperatives – • Create incentives and enable longer and more productive working lives • Promote labor market inclusion, particularly of new entrants
12
Diverse Jobs-centered policy agenda
• Short term:• Macro/fiscal policy to ensure fundamentals for economic recovery
• Longer term:• Promote superstar firms – Eliminate barriers to business
expansion and entrepreneurship• More adaptable workers - Generic skills and market-driven, life-
long learning• Make (formal) work pay – Remove disincentives and barriers to
work• More mobile workers – Remove impediments to labor mobility
13
Diverse Jobs-centered policy agenda: Priorities
• Business climate, labor market and public sector reform• Late modernizers: public sector restructuring; first generation
business climate reforms for productive diversification
• Skills• All countries: strong generic skills foundations among youth
• Incentives and barriers• Young countries: reforming tax and social benefit systems so as to
make formal work pay and smart activation policies
• Internal mobility• All countries: removing barriers associated with administrative
requirements and underdeveloped housing markets;