Additional Material
Belser & Rama (2001)
State Ownership and Labor Redundancy: Estimates Based on Enterprise-Level Data from Vietnam
Privatizing or restructuring state-owned enterprises may lead to mass layoffs, but the number of redundant workers is usually unknown beforehand. This paper estimates labor redundancy levels in Vietnam by comparing employment across enterprises with different degrees of state ownership. State-owned enterprises are modeled as a hybrid between labor-managed enterprises and profit maximizing enterprises, with the profit motive becoming less prominent as the state share of capital increases. This model leads to an employment equation that is estimated using an enterprise database from Vietnam.
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Betcherman (2002)
An Overview of Labor Markets World-Wide: Key Trends and Major Policy Issues.
This paper provides an overview of labor market trends and key policy issues worldwide. It begins with a statistical overview of major indicators relating to the labor market, highlighting the diverging experiences between the high-income countries and many developing regions. It then reviews four global trends that are rapidly changing labor markets and affecting workers all over the world. These trends are the changing industrial structure which is being accompanied by rapid urbanization; global economic integration; technological change through the information and communication technology revolution; and the informalization of many economic activities. While policy responses to these developments depend on national circumstances, there are certain priorities that apply universally. These priorities - investing in human resources, social protection for workers, and labor market regulation - are reviewed in the final section of the paper.
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Birdsall & Nellis (2002)
Winners and Losers: Assessing the Distributional Impact of Privatization
While most technical assessments classify privatization as a success, this paper notes that the policy remains widely and increasingly unpopular, largely because of the perception that it is unfair. The paper reviews the increasing (but still uneven) literature and conclude that most privatization programs appear to have worsened the distribution of assets and income, at least in the short run. This is more evident in transition economies than in Latin America, and less clear for utilities and infrastructure enterprises such as electricity and telecommunications, where the poor have tended to benefit from much greater access, than for banks, oil companies, and other natural resource producers.
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Blomquist (2002)
Impact Evaluation Case: Tanzania Redeployment Program
Presentation which summarizes the findings of an evaluation of a redeployment program involving training and counselling for 63,000 retrenched civil servants in Tanzania.
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Caberno-Verzosa & Mitchell (2002)
Communicating Economic Reform
Provides guidelines for public information and communication programs in support of economic reform, applicable to labor programs in PPI.
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Carneiro & Gill (1997)
Effectiveness and Financial Costing of Voluntary Separation Programs in Brazil: 1995-1997
The paper documents practical experience with public sector retrenchment in Brazil during the period 1995-1997. The paper describes alternative labor programs used in voluntary severance programs (PDVs) that have been implemented at both the federal and local government levels to encourage voluntary job separations. Similar attempts have been made in some public utilities and banks.
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Chen & Diwan (2000)
When the Bureaucrats Move Out of Business: A Cost-Benefit Assessment of Labor Retrenchment in China
The major focus of this paper is to estimate the likely costs and benefits of SOE reforms on labor in China, although the authors also look at the likely gains attached to a re-allocation of capital between the state and private sectors. The focus is on industry, for whom reasonable historical series of provincial output has been released recently.
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Chong & Rama (2000)
Do Separation Packages Need to Be That Generous? Simulations for Government Employees in Guinea-Bissau
Separation packages may be needed to overcome resistance to public sector downsizing, and can be justified on fairness grounds. But what is the "right" amount of compensation? This paper offers a practical answer to this question, using the case of Guinea-Bissau as an illustration of a loss-based approach.
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Clarke (2001)
Thirsting for Efficiency.
This paper assesses the issues - including labor issues - that arise from two aspects of water reform: a) the political economy of water reform and b) the effect of reform on the performance of water utilities. It describes the roles that potential winners and losers have played in water reforms in Guinea, Chile, Peru, Côte d'Ivoire Mexico and Argentina.
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Cruz (2001)
Addressing Labor Concerns during Privatization: Lessons from the Metropolitan Waterworks and Sewerage System (MWSS), Manila, Philippines.
A PPIAF case study describing the approaches to labor issues addressed during the privatization in the Philippines of the Metropolitan Waterworks and Sewerage System (MWSS), a public water utility in Manila.
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Dar & Gill (1988)
Evaluating Retraining Programs in OECD Countries: Lessons Learned.
Are retraining programs for the unemployed more effective than job search assistance? Governments of the member countries of the Organization for Economic Co-operation and Development have considerable experience with retraining programs in a variety of industrial settings. Evaluations of these programs show that the results are disappointing, however. This article discusses the factors associated with retraining programs for two types of workers: those laid off en masse and the long-term unemployed. Evaluations indicate poor results for both groups: retraining programs are generally no more effective than job search assistance in increasing either reemployment probabilities or post intervention earnings, and they are between two and four times more expensive than job search assistance.
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Dar & Tzannatos (1999)
Active Labor Market Programs: A Review of the Evidence from Evaluations.
In spite of their widespread use, there are polar positions among policymakers and researchers on the effectiveness of active labor market programs - on the one hand, proponents of these programs argue that active labor market programs are both necessary and useful, short only of a panacea for reducing unemployment and protecting workers, while opponents contend that these programs as a waste of public money with high opportunity costs.
Part of this divergence of views arises from the fact that these programs have rarely been rigorously evaluated. Building on studies does by the OECD and the ILO over the past few years, this paper contributes to the discussion by synthesizing the findings of these evaluations - over 100 studies - and attempting to draw some best practice lessons.
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de Ferranti et al. (2000)
Securing Our Future in a Global Economy
Chapter 6 of this book, Helping Workers Deal with the Risk of Unemployment, assesses a set of income support programs that have been tried in the Latin American context. The chapter considers specific programs based on studies commissioned by the World Bank.
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Estache et al. (2000)
Labor Redundancy, Retraining, and Outplacement during Privatization: The Experience of Brazil's Federal Railway.
A detailed case study of the labor program used in support of restructuring and privatization of Brazil's Federal Railway.
The paper is organized as follows: Section 1 provides an introduction to the paper. Section 2 is an overview of the historical evolution of Brazil's Federal Railways (RFFSA) and of the factors that lead to its privatisation; Section 3 discusses the main estimates of the staff retrenchment needs; Section 4 describes the profile of the railway workers; Section 5 explains the overall strategy with which the specific program was built; Section 6 presents the various elements of the program that aim to address its efficiency and social concerns; Section 7 presents the main achievements; and Section 8 concludes with some lessons.
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Fretwell (2002)
Mitigating the Social Impact of Privatization and Enterprise Restructuring.
This paper summarizes practical findings from experience with labor programs world wide – Latin America and Europe in particular. It assesses the objectives of social support programs, pre- and post-layoff services, income support programs, labor redeployment services, and the evaluation and monitoring of labor programs
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Gates & Saghir (1995)
Employee Stock Ownership Plans (ESOPs): Objectives, Design Options and International Experience.
An Employee Stock Ownership Plan (ESOP) is a mechanism to facilitate employee ownership in a company. While broadening employee ownership, ESOPs can be a useful policy instrument for promoting privatization, improving enterprise performance, and raising money for the enterprise. This paper examines international experiences with ESOPs; its primary objective being to lay out the key factors involved in creating an ESOP in order to assist government, business, labor, and development leaders to come to an appreciation of the wide-ranging benefits they offer. After reviewing hundreds of ESOPs in a multitude of environments worldwide, the authors present suggestions culled from the best of these.
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Gupta, Schiller & Ma (1999)
Privatization, Social Impact, and Social Safety Nets
Privatisation promotes economic efficiency and growth, thereby reinforcing macroeconomic adjustment. In the short run, however, it can lead to job losses and wage cuts for workers and higher prices for consumers. This paper discusses these impacts and the fiscal implications of privatisation. It then reviews various methods of privatisation and finds that public sales and auctions can have more negative effects on workers but maximize the government's revenue and gains. Policymakers' options for mitigating the social impact of privatisation are surveyed, and experiences under adjustment programs reviewed.
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Haltiwanger & Singh (1999)
Cross-Country Evidence on Public Sector Retrenchment.
This article reports the results from a survey of public sector employment retrenchment episodes across a wide variety of developing and transition economies. The information collected and analyzed is primarily from internal World Bank documents and in-depth interviews with World Bank staff having operational information about experiences in specific countries. Using the information collected on 41 retrenchment programs across 37 countries, the article analyzes the relationships between the factors leading to retrenchment, the scope and nature of retrenchment, and the methods used to accomplish the retrenchment. The discussion includes an analysis of the mix of involuntary and voluntary employment reduction programs, the compensation schemes offered, the extent of targeting of specific types of workers, the problem of rehiring and calculated summary financial payback indicators.
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Kikeri (1998)
Privatization and Labor: What Happens to Workers When Governments Divest?
World Bank Technical Paper No. 396. notes that, despite its importance, labor is one of the least addressed issues in privatization. The lack of information on the employment impact of privatization has exacerbated the fears and concerns of governments and workers alike. This paper examines the effects of privatization on labor and analyzes the mechanisms that governments can use to minimize the political and social costs of labor restructuring in privatization, by drawing on the experience of mixed economies.
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Lopez-Calva (2001)
Private Participation in Infrastructure and Labor Issues: The Privatization of Mexican Railroads.
A PPIAF Case Study on labor adjustment during the privatization of railroads in Mexico. Making the company attractive to investors, while respecting all the labor rights of the people and reducing labor redundancy, was the main challenge for the privatization team. When the privatization process started in 1996, FNM had around 43, 000 active workers. In 1998, 7% of that labor force (3,000) had opted for retirement, 54% (23,300) had been re-hired by the new companies, and 39% (16,700) ended their relation with the company. The various packages offered to workers are described. The evidence shows that those workers who stayed in the company earn higher wages, though the skilled-to-unskilled salaries ratio also increased after privatization.
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Petrazzini (1996)
Competition in Telecoms: Implications for Universal Service and Employment.
This short note emphasizes the contributions that market liberalization, the introduction of competition and demonopolization have made to the growth of telecommunications services and the growth in employment. During 1990-94, employment in liberalized markets in 26 countries grew by 21 percent, compared to just 3 percent in monopoly markets
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Rama (1997)
Efficient Public Sector Downsizing.
Most downsizing operations exhibit high financial returns, but their economic returns crucially depend on their design. After briefly comparing public sector employment across countries, this paper analyzes the optimal design of downsizing operations from a microeconomic perspective.
The paper addresses a range of design issues, severance compensation, adverse selection, the appropriate sequence of downsizing and privatization, the consequences of early retirement programs and the usefulness of training programs and other active labor market policies. The main findings are organized under form of a decision tree.
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Rama (1999)
Public Sector Downsizing: An Introduction.
Because large-scale involuntary dismissals are often politically difficult, a voluntary approach to reductions in public sector employment is increasingly popular among developing countries. This article attempts to sketch a protocol for public sector downsizing that takes into account the costs and benefits for the workers and the economy.
After reviewing the international experience with downsizing, the article addresses five questions: how to identify the redundant workers, how to predict their losses from separation, how to design compensation and assistance packages, how to assess the financial and economic returns to downsizing, and how to deal with downsizing in one company towns.
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Rama (2001)
The Gender Implications of Public Sector Downsizing
Men and women may be affected differently by major economic reforms and, especially, by public sector downsizing. This article illustrates several analyses that could precede the launching of a sizeable downsizing operation, and outlines policy implications, taking Vietnam as an example. It uses employment data as a basis to assess the prospects for women to get salaried jobs, and to predict how reforms could affect the gender gap in labor earnings. It also analyzes the correlation between female employment and indicators of labor redundancy by sector. Over-staffing is concentrated in male-dominated activities, such as construction, mining and transportation, but is smaller in female-dominated activities, such as footwear, textile and garments. The article then reviews programs that are in place to assist redundant workers, such as early retirement and re-training. It uncovers no evidence of a strong gender bias in them, but does assess the potential gender biases of three standard compensation packages for redundant workers.
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Rama & MacIsaac (1999)
Earnings and Welfare after Downsizing: Central Bank Employees in Ecuador
This article measures the earnings and welfare losses experienced by displaced employees of the Central Bank of Ecuador. It analyses these losses to individual characteristics such as gender, education, seniority, and salary in the public sector. Earnings and welfare losses also vary depending on the nature of displacement, which was voluntary for roughly half the employees and involuntary for the rest. Overall, the losses were larger for employees with less education and more seniority, but not necessarily larger for employees with higher salaries. The article derives the implications of the analyses for the design of assistance programs for displaced workers and, more specifically, for the tailoring of compensation packages to their individual characteristics.
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Ray (2001)
HR Issues in Private Participation in Infrastructure: A Case Study of Orissa Power Reforms
A PPIAF Case Study of the Human Resource issues in power sector reform in Orissa, India. Discusses issues relating to pensions, staff transfers, voluntary retirements, treatment of casual, permanent and different grades of staff, consultation with trade unions, ESOP, employee trusts, in the Orissa State Electricity Board (OSEB) and the Grid Corporation (GridCo).
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Revenga et al (1994)
The Impact of Mexico's Retraining Program on Employment and Wages
This article analyzes the impact and effectiveness of the Mexican labor retraining program for unemployed and displaced workers - Programa de Becas de Capacitacion para Trabajadores (PROBECAT). The methodology followed was to compare the post-training labor market experiences of trainees with those of a comparison group - a matched sample of unemployed individuals who were eligible for, but did not participate in, PROBECAT. The results of this exercise suggest that participation in PROBECAT reduced the mean duration of unemployment for both men and women trainees and increased the monthly earnings of men, but not of women.
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Ruppert (1999)
The Algerian Retrenchment System: A Financial and Economic Evaluation.
The government of Algeria adopted a retrenchment system to facilitate labor shedding in a public sector characterized by redundant workers and in an environment of already high unemployment. This article assesses the financial viability of the retrenchment system and the inherent welfare costs and benefits associated with layoffs. A financial flows model tracks the Unemployment Insurance Fund's revenue and expenditure flows during the projected five-year adjustment period.
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Sin (2003)
Pension Reform Options Simulation Toolkit--PROST
Presentation that summarizes the World Bank Pension Reform Options Simulation Toolkit (PROST). Outlines the key steps and data requirements needed to model reform options for either a national pension system, or a state / closed pension schemes or provident funds.
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Steel (2003)
Using Vouchers to Develop Business Development Service Markets for Kenya's Micro and Small Enterprises.
Presentation that summarizes the experience of a pilot program for training of small enterprises in Kenya that used vouchers as a mechanism both for improving the targeting of training (to over 30,000 recipients) , and encouraging a supply response from service providers (over 1,000).
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Thompson et al (2001)
Private Investment in Railways: Experience from South and North America, Africa and New Zealand.
Reviews experience of private participation in railways, in Africa, America and New Zealand, including the methods of dealing with labor.
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Tynan & Kingdom (2002)
A Water Scorecard.
"A Water Scorecard" considers the process of setting performance targets for water utilities in developing countries. Using data from 246 water utilities in 51 developed and developing countries, this Note highlights the wide variation in performance on key indicators: unaccounted-for water, labor costs, and continuity of service. On the basis of the performance of the top 25 percent of developing country utilities, the Note proposes "best practice" targets for developing countries.
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Valdez (2002)
Case Studies on Human Resource Issues in Private Participation in Infrastructure in Bolivia.
A PPIAF Case Study, which reviews the implementation of labor policies during the capitalization of the Bolivian Railway - Empresa Nacional de Ferrocarriles (ENFE). Given the difficult economic situation of ENFE, and in order to assure the presence of bidders, the government had to downsize substantially the work force. Capitalization of the railroad sector proved to be the most difficult process among the various companies. This paper presents the main outcomes of this process focusing mainly on the railway company but relevant experiences in the various other capitalized/privatized companies such as hydrocarbons, electricity, telecommunications, etc.
The report is divided in three sections: i) a general presentation of the transaction, ii) a description and analysis of human resource issues during the transaction, and iii) a brief presentation of lessons learned from this experience.
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Wodon & Minowa (2001)
Training for the Urban Unemployed: A Reevaluation of Mexico's Training Program, Probecat
This paper discusses evaluation methodologies for a large training program for the unemployed in Mexico, Probecat. The application of alternative sample selection methods in making evaluation comparisons is discussed. Earlier evaluations had yielded encouraging results, but this new assessment suggested that the program did not decrease levels of unemployment nor increase wages of program participants.
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World Bank (2000)
Port Reform Toolkit - Module 7: Port Labor Reform
This Labor Reform Module is one of eight modules comprising the Port Reform Toolkit. The Toolkit is designed to help government officials and private interests, alike, navigate the process of port reform to achieve more modern, efficient, and financially viable seaports and related intermodal facilities and services. The Labor Reform Module deals with one of the most critical elements of port reform - the many labor-related issues associated with port ownership and operations. It is designed to help government decision makers identify the key forces affecting port labor today, understand the need for reform in a competitive environment, evaluate alternative ways of approaching labor reform, and how to pursue reform in a way that maximizes efficiency and minimizes labor dislocation and risks to potential port investors and operators.
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World Bank (2002)
Public Communications Programs for Privatization: A Toolkit for Task Team Leaders and Clients
This Toolkit reviews the experience of the World Bank and other international financial institutions with employing strategic communication programs for privatization. Drawing both from academic research on the subject and from case studies, it highlights some of the best practices and also identifies some of the lessons learned from mistakes. It examines both successes and failures, recommends some principles of good strategic communication and offers a methodology for researching and analyzing the issues associated with privatization. It sets out a phased approach to managing and implementing communication programs.
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