29, August, 2013

Labour Market Information Programmes

How can Labour Market Information Programmes improve the coverage, quality and efficiency of labour markets? This Brief provides key insights by drawing on experiences from across Latin America.

Within the liberal economic model that spread across Latin America during the 1990s, free and open markets were considered the main mechanism for resource allocation. In this context, Latin American governments focused not on providing employment opportunities, but on supporting the workings of the labour market. One area where labour market failure had been identified was in relation to information. In order for the labour market to efficiently allocate workers to jobs, properly informed participants (both firms and workers) were needed. In response, many Latin American countries implemented Labour Market Information (LMI) programmes. This Brief begins by examining the logic underlying LMI programmes, before going on to describe specific characteristics of these programmes in Latin America and their main stages of development. The Brief then provides an overview of monitoring and evaluation indicators and impact assessments before concluding with a discussion of enabling factors and key lessons for other regions.

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Key Lessons:

  • Developing LMI programmes can improve the functioning of the labour market. Although empirical evidence is quite limited, available data suggests that LMI programmes have positive effects on both the probability of finding a job and the quality of jobs available. These programmes have proven to be cost-efficient and much less costly than training programmes.
  • Challenges faced by Latin American countries when adapting LMI programmes from developed country experiences have been related to high levels of informal employment, low educational attainment and a lack of basic labour skills.
  • Partnerships with the private sector improve the efficiency of labour exchange systems and other employment related services. In this sense, the increasing role of private employment agencies in LMI programmes has been an important success factor.

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