Stage 2: From Employment to Labor Intermediation Services

The traditional employment services model that grew up in the advanced economies in the 1940s-60s had it much easier compared to today’s developing and emerging economies. They only had to work marginally well because so many employment-school-work connections happened outside the employment services model. They had relatively reliable sources of public financing, job change was less frequent, and most employment was formal and largely industrial. Post-WWII advanced countries expanded via public financing, as their costs to benefit were largely measured by reducing claims on generous unemployment insurance.

Growing from a core set of employment services into a wider, more efficient range of services that fit more diverse developing economies operating in a more global world means thinking very differently about what services are needed, who provides them and how they are provided. Three “big-picture” changes form the heart of advancing to Stage 2 in a more global era when the public sector cannot do it all and the employment problems come from multiple sources. This chapter lays out these three broad changes while describing under each a host of different routes, programs and ideas tested by country experience.

The first big-picture change is that core employment services need to grow quickly by adding an extended set of labor intermediation services that fit the national economy. Second, to accomplish the leap forward from core employment to labor intermediation services requires attention to greater efficiency and better performance, using management © The Author(s) 2017

J. Mazza, Labor Intermediation Services in Developing Economies, DOI 10.1057/978-1-137-48668-4_4

restructuring, case management and other innovations of the core public- private-NGO service. The third big-picture change is supporting and even monitoring the functioning and growth of the wider intermediation market - thinking about building the range of private, public, non-profit organizations, and schools that can form a national intermediation system here called “Jobs Inc.” Your grandfather’s public employment services never had to think about the importance of both enlarging the pie and making a better one, in which job and school transitions are more frequent and need to function more smoothly. Do not despair if this sounds too complicated! Stage 2 is already under way in strange unlikely places in the developing world! It is a gradual process of evolution, not a big bang!

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