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Key Approaches to Labor Market Assessment:
An Interactive Guide
Module 5: Policy
Tools and approaches in this section help the user identify key policies, regulations, and institutions that may be impacting the labor market. Jump to the full Module 5.
Why is it important to understand the policies that can impact a labor market?
Labor markets are affected by a wide range of policies. It is important for those engaging in or utilizing labor market assessments to understand how the actions and practices of the government may be impacting the supply of and demand for labor and how the two are intermediated. Relevant policies may include:
- Labor market policies (training and job-search assistance)
- Minimum wage and business regulations including, hiring, firing, employee protections and benefits
- Macroeconomic policies
- Supply side: Education policies (who receives education and training)
- Structural policies: how institutions coordinate with each other and manage and target public funds to improve functioning of the labor market
Approach 5a:
Enabling Environment for Spurring Employment: Policy Questionnaire
Approach 5a:
Enabling Environment for Spurring Employment: Policy Questionnaire
This approach highlights the policy areas impacting the labor market, allowing users to understand the enabling environment in spurring employment and inclusive growth in the economy, and the extent to which policy changes can more effectively contribute to those outcomes. Jump to the full Approach 5a.
Why is this approach important?
By focusing on a range of relevant policies, implementers can identify key policy issues affecting both the supply and demand for jobs and labor, rather than focusing only on labor policy, a necessary but insufficient lever for improving employment.
How do I use this approach?
This questionnaire guides the user through some key questions to ask during the desk and field research phases of an LMA, to better understand which policies might be impacting the labor market and how. The policy section of an LMA will identify the most pertinent policy issues, getting deeper into detail on specific policies in the relevant sections (economic context, demand for skills, supply of skills).
During the research phase, users will identify which of these questions may be important to ask in a specific context, and gather answers through desk research and/or field work, including interviews with policymakers and others from the relevant stakeholder groups. The findings from this investigation will indicate which policy areas currently hinder functioning of the labor market, which areas currently contribute to better outcomes, and how. Learn more about how to use this approach.
Where can I find additional approaches and tools to understand the impact of policy on the labor market?
Additional examples of tools for understanding how policies impact the labor market include the World Bank’s Systems Approach for Better Education Results tool for assessing workforce development systems (SABER-WfD), which focuses on “how well the system is equipping individuals to meet the demand for skills in the labor market” by examining strategy, system oversight, and service delivery.
The World Bank’s Doing Business Project “provides objective measures of business regulations for local firms in 190 economies and selected cities at the subnational level,” including data for labor market regulation, with multiple years of data available for most countries.