Intermediation Services

The traditional roles of employment services - helping make a better match faster of worker to job - are still amply relevant to contribute to greater productivity and economic performance in today’s developing economies. Clearly changing, as reviewed extensively in this book, is both how this is being done in the modern, global economy and where it is being done and by whom, beyond, across, and within national borders. Letting go of 1960s’ understandings about what it takes to improve the match of workers (their skills, education) to jobs means removing some walls between what were once thought to be the separate policy “silos” of active labor market versus education versus economic development versus social policies.

Developing countries should consider moving from basic employment services to labor intermediation services not only because there are limitations to how much job placement - even hidden in discouraged workers - can be achieved in developing economies but also because in today’s economies job matching and placement (or the old policy of employment services) functions less and less in isolation as a distinct intervention. With rapid job change, greater skills needs, and questions about the quality and job relevance of basic and technical education and training nearly everywhere, good labor intermediation can or should be able to affect a wider range of policies. These include: what and how countries train or educate; how the private sector detects and signals its skill needs; and how workers can aim for and build better careers and paths out of poverty. It should be able to contribute to these changes through its incentives, its savings of time and costs to employers, its information and market signals. To put these modern roles in terms of “market failures” (e.g. in economics-speak), wider roles of labor intermediation services can be relevant, depending on different country contexts, to:

  • • promote labor mobility within nations to areas with greater job openings;
  • • facilitate labor mobility across borders and upon return from abroad;
  • • stimulate the growth of private and NGO intermediation markets, particularly to serve disadvantaged populations better with multiple interventions and systematic follow-up;
  • • speed the transition of workers to new and better employment; and
  • • reduce transitions from un, under and informal employment or idleness.
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