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Cited by 283Labor market dynamics and wage inequalityEducation and Labor RelationsEmployment, Labor, and Gender Studies

How Effective Are Active Labor Market Policies in Developing Countries? A Critical Review of Recent Evidence

McKenzie, David·2017·The World Bank Research Observer
DOI 10.1093/wbro/lkx001
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Abstract

Jobs are the primary policy concern of policymakers in many countries. The 2007–2008 global financial crisis, rising demographic pressures, high unemployment rates, and concerns over automation all make it seem imperative that policymakers employ increasingly more active labor market policies. This paper critically examines recent evaluations of labor market policies that have provided vocational training, wage subsidies, job search assistance, and assistance moving to argue that many active labor market policies are much less effective than policymakers typically assume. Many of these evaluations find no significant impacts on either employment or earnings. One reason is that urban labor markets appear to work reasonably well in many cases, with fewer market failures than is often thought. As a result, there is less of a role for many traditional active labor market policies than is common practice. The review discusses examples of job-creation policies that do seem to offer promise, and concludes with lessons for impact evaluation and policy is this area

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Crossref · 10.1093/wbro/lkx001

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  • Meta-analyses have pointed to low or short-lived returns to standalone vocational skills training programs in low-income settings.

    “Our intervention also builds on existing work examining the impacts of standalone vocational skills training programs, for which meta-analyses have pointed to low or short-lived returns in low-income settings”

    From Women's Empowerment in Action: Evidence from a Randomized Control Trial in Africa (2020) · cites this paper as McKenzie 2017

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Authors
McKenzie, D.
Corresponding author
McKenzie, David
ORCID
McKenzie, David
Venue
The World Bank Research Observer
Publisher
Oxford University Press (OUP)
Published
2017-08
Volume
32
Issue
2
Pages
127-154
ISSN
  • 0257-3032 (ISSN-L)
  • 1564-6971
DOI
10.1093/wbro/lkx001
OpenAlex
W2604058646
Cited by
283
References
29
Citations by year
2026: 21 · 2025: 33 · 2024: 46 · 2023: 37 · 2022: 43 · 2021: 37 · 2020: 19 · 2019: 25 · 2018: 17 · 2017: 3 · 2015: 1 · 2012: 1
FWCI
31.50
Type
journal article
Language
en
Open access
closed
Locations
  • The World Bank Research Observer (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
  • Social Sciences › Political Science and International Relations › Education and Labor Relations
  • Social Sciences › Safety Research › Employment, Labor, and Gender Studies
Keywords
active labour market policy, developing countries, vocational education, wage subsidies, job search assistance, job creation policy, employment effects, earnings outcomes, impact evaluation, urban labor markets, market failure, unemployment

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