Gainful employment
is still the most reliable way of escaping poverty. However, access to both
jobs and decent working conditions remains a challenge. Sixty-six per cent of
employed people in developing economies and 22 per cent in emerging economies
are in either extreme or moderate working poverty, and the problem becomes even
more striking when the dependents of these “working poor” are considered.
Thus, it is not just unemployment or inactivity that traps people in poverty,
they are also held back by a lack of decent work opportunities, including
underemployment or informal employment.
Appropriate labour market policies can play an important role in the fight to
eradicate poverty, by increasing access to job opportunities and improving the
quality of working conditions. In particular, labour market policies that
combine income support for jobless people with active labour market policies
(ALMPs).
The new ILO report What works: Promoting pathways to
decent work shows that combining income support with active labour market support
allows countries to tackle multiple barriers to decent work. These barriers can
be structural, (e.g. lack of education and skills, presence of inequalities) or
temporary (e.g. climate-related shocks, economic crises). This policy
combination is particularly relevant today, at a time when the world of work is
being reshaped by global forces such as international trade, technological progress,
demographic shifts and environmental transformations.
Policies
that combine income support with ALMPs can help people to adjust to the changes
these forces create in the labour market. Income support ensures that people do
not fall into poverty during joblessness and that they are not forced to accept
any work, irrespective of its quality. At the same time, ALMPs endow people
with the skills they need to find quality employment, improving their
employability over the medium- to long-term.
New evidence gathered for this report shows that this combination of income
support and active support is indeed effective in improving labour market
conditions: impact evaluations of selected policies indicate how people who
have benefited from this type of integrated approach have higher employment
chances and better working conditions.
One example of how this combined approach can produce results is the innovative
unemployment benefit scheme unrolled in Mauritius, the “Workfare Programme”.
This provides workers with access to income support and three different types
of activation measures; training (discontinued in 2016), job placement and
start-up support. The programme was also open to those unemployed people who
were previously working in an informal job. By extending coverage to the most
vulnerable workers, the scheme has helped reduce inequalities and unlock the
informality trap.
Another success came through a public works scheme implemented in Uruguay as
part of a larger conditional cash transfer programme, the National Social
Emergency Plan (PANES). The programme was implemented during a deep economic
recession and carefully targeted the poorest and most vulnerable.
Beneficiaries of PANES were given the opportunity to take part in public works.
In exchange for full-time work for up to five months, they received a higher
level of income support as well as additional job placement help. This approach
reached a large share of the population at risk of extreme poverty and who
lacked social protection. The report indicates that providing both measures
together was critical to the project’s success.
The effects of these policies on poverty eradication cannot be overestimated.
By tackling unemployment, underemployment and informality, policies combining
income support with ALMPs can directly affect some of the roots of poverty,
while enhancing the working conditions and labour market opportunities for
millions of women and men in emerging and developing countries.
