Studies on Growth with Equity

What works: Active labour market policies in Latin America and the Caribbean

This report examines the effectiveness of active labour market policies implemented in Latin America, notably policies carried out in Argentina, Colombia and Peru.

Latin America and the Caribbean have achieved significant economic, labour market and social progress in recent decades. However, progress has begun to slow on a number of fronts that will challenge the ability of policy-makers to sustain these gains. In this context, active labour market policies (ALMPs) can play a central role by improving workers’ employability, contributing—directly or indirectly—to productive employment creation. A number of Latin American countries have embraced this policy shift.

This report, part of the Studies on Growth with Equity series, examines the effectiveness of ALMPs implemented in Latin America, notably policies carried out in Argentina, Colombia and Peru. In particular:

  • Chapter 1 presents the main trends of labour market and social indicators in LAC.

  • Chapter 2 reviews the different concepts relevant to understanding ALMPs in a non-OECD country context and presents the results of a unique compendium of labour market policies implemented in selected LAC countries since the 1990s.

  • Chapter 3 reviews both qualitatively and through a meta-analysis the empirical economic literature on impact evaluation of ALMPs, particularly in LAC countries.

  • Chapter 4 presents results of three impact evaluations carried out for the purpose of this report and discusses the main policy lessons on how to leverage these policies to sustain further labour market and social progress.

  • Corrigendum from 1st print edition: In Table 1.1 (pages 42–43), in the columns ‘Employment rate’ and ‘Labour force participation rate’, the values for men and women are inverted for all countries, but not for the regional aggregate “LAC”. The online (PDF) version has been rectified.