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Protection and Training Institutions for Improving Workforce Integration in Latin America and Asia

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The world of work is going through far-reaching transformations. These transformations have a strong impact on labour markets and pose new challenges for their institutions, including unemployment protection and technical and vocational education and training (TVET), which are crucial to the creation of full and productive employment and decent work for all. Constantly changing labour markets and the growing heterogeneity of labour relations present major challenges for the design of unemployment protection instruments. In addition, a highly skilled workforce is a key element for any development strategy that aims to base economic growth on innovation and knowledge. Moreover, national technical and vocational education and training systems must meet increasingly diverse demands from both the production sector and persons seeking decent work. By analyzing recent experiences in Latin America and Asia in relation to unemployment protection and TVET systems, as well as the challenges the countries of the two regions face as they develop these labour market institutions, this volume seeks to contribute to the debate on the formation of labour market institutions that foster sustainable development in a changing world of work.

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Introduction

Labour relations and employment conditions are regulated through institutions that define the frame of action for the participants, through legal or administrative rules, collective bargaining and market forces. Jointly, these labour market institutions have the twin objectives of protecting the weaker players, in a market in which the power structure is unequally distributed, and of enabling the market to adjust efficiently to economic shocks. Although there is generally a very broad consensus on these twin objectives, there are also discrepancies as to what it means for certain specific institutions. The two objectives are generally present in all institutions, albeit differently weighted. For example, the key objective of institutions that protect workers in the event of unemployment is obvious; but these protection mechanisms can also make adjustment more efficient by facilitating a match between job searchers and job vacancies. Technical and vocational education and training (TVET), can improve a firm’s productivity and competitiveness; but they can also generate wage and non-wage benefits for the workers. An increase in the minimum wage favours lower-income workers and, although it generates higher costs for firms, it can also stimulate productivity improvements.

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