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Removing regulatory barriers in services is key to unlocking productivity in Croatia. Croatia has more restrictive regulations than most other EU member states, and prior World Bank research shows that the economic gains to reforms are the highest out of all EU countries. This report provides recommendations on specific measures to reform the regulation of professions. The report focuses on reforms for 24 high-impact occupations which were selected for review based on their economic relevance, the restrictiveness of regulations, and the feasibility of reforms. The World Bank identified 42 restrictions that are most harmful to competition based on market effects. The World Bank recommends the adoption of an omnibus bill covering 45 measures across 24 professions. The recommended measures require changes in 19 laws and 52 by-laws under the responsibility of seven ministries and constitute reforms with high potential to bring productivity gains. The recommended reforms are a cornerstone of the National Reform Program of the Republic of Croatia, the Structural Reform Support Program of the European Commission, and the World Bank Group's Country Partnership Framework.

Labor Market --- Labor Policies --- Labor Policy --- Social Protections and Labor

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This paper empirically studies the dynamics of labor market adjustment following the Brazilian trade reform of the 1990s. The paper uses variation in industry-specific tariff cuts interacted with initial regional industry mix to measure trade-induced local labor demand shocks and examines regional and individual labor market responses to those one-time shocks over two decades. Contrary to conventional wisdom, the analysis does not find that the impact of local shocks is dissipated over time through wage-equalizing migration. Instead, it finds steadily growing effects of local shocks on regional formal sector wages and employment for 20 years. This finding can be rationalized in a simple equilibrium model with two complementary factors of production, labor and industry-specific factors such as capital, that adjust slowly and imperfectly to shocks. Next, the paper documents rich margins of adjustment induced by the trade reform at the regional and individual levels. Workers initially employed in harder hit regions face continuously deteriorating formal labor market outcomes relative to workers employed in less affected regions, and this gap persists even 20 years after the beginning of trade liberalization. Negative local trade shocks induce workers to shift out of the formal tradable sector and into the formal nontradable sector. Non-employment strongly increases in harder hit regions in the medium run, but in the longer run, non-employed workers eventually find re-employment in the informal sector. Working age population does not react to these local shocks, but formal sector net migration does, consistent with the relative decline of the formal sector and growth of the informal sector in adversely affected regions.

Economic Theory & Research --- Emerging Markets --- Labor Markets --- Labor Policies --- Trade Liberalization --- Transitional Dynamics

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The number of individuals who have crossed borders has mushroomed over recent years. The phenomenon of international migration, however, is heterogeneous in terms of the underlying motives and aspirations of migrants. Forced international migrants are involuntarily displaced refugees who flee conflict, violence, or persecution across an international border. Voluntary migrants can additionally be classified into two categories: (i) temporary labor migrants who migrate for economic reasons for a fixed duration of time, and (ii) immigrants who move with the intention of changing their country of residence, due to factors such as wanting to reunite with family or to benefit economically. Bilateral labor agreements (BLAs) between sending and receiving countries are institutional tools designed to facilitate migratory flows and maximize the potential benefits of temporary international migration for all concerned. This study focuses on the employment permit system (EPS) in Korea, a temporary migration program for low-skilled workers considered a good global practice among efforts toward the goal of co-development - that is, the mutual benefit of both sending and receiving nations. The EPS has accomplished several remarkable achievements, including a drastic reduction in migrants' cost burden, enhanced transparency, reduction in the share of workers overstaying, and improved access to worker protection. The process used to match employers and temporary labor migrants also merits significant improvement.

International Migration --- Labor Markets --- Labor Mobility --- Labor Policies --- Poverty Reduction --- Social Protections And Labor

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Only 56 percent of women ages 15-64 participate in the labor market, a slightly higher share than the Europe and Central Asia average, but 18 percentage points lower than the share among men in Armenia. The conflicting demand on women's time for care and work activities represents a fundamental barrier to economic participation and generates a vicious circle of low labor market attachment and prominence of the care provider role that leads to increased vulnerability and gender-based inequalities. International evidence shows that support for childcare and eldercare affects women's labor market participation. This note examines the care needs of families with children and/or elderly household members and the provision of formal care services in Armenia with an emphasis on the availability, price, and quality characteristics. Based on the analysis of an independent mixed-methods dataset collected in several countries of Europe and Central Asia, this note documents the perceptions and barriers in the use of quality formal care in Armenia. Five main messages emerge from the assessment of supply and demand of formal childcare and eldercare in Armenia: 1) Although social norms strongly highlight the role of women as caregiver, there is scope for policy aimed at increasing access and affordability of childcare and early education: Around 24 percent of parents of children ages 0 to 5 currently not attending kindergarten report that the reason of no attendance is lack of the service or being unable to afford it. 2) The demand for childcare services is voiced predominantly by parents perceiving benefits for their child's development and working (or willing-to-work) mothers. 3) Use of childcare is regressive: There are significant differences in enrollment to kindergarten and nursery between the poorest and the richest households (12.7 and 36.4 percent respectively). A well-developed childcare sector not only would help generating economic participation opportunities for women but also implies potential improvements in the school readiness for children especially for the most vulnerable households. 4) Day-care centers and home-based formats-if available-will be more compatible with prevailing standards of care for the elderly. 5) Quality is important for potential users of formal care services and the main challenges of the existing supply involves human resources (HR).

Elder Care --- Labor Policies --- Social Protections and Assistance --- Social Protections and Labor

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Long-term unemployment has been a persisting problem in Europe since the 2008 economic crisis. Long-term unemployment is widespread across Europe, with Southern European countries most heavily affected (e.g. in Greece, the share of long-term unemployed out of the total number of unemployed accounted for 70 percent in 2018). The composition of a country's long-term unemployed (LTU) population can be very heterogeneous, however, there are oftentimes similarities across countries. Lower levels of education and outdated skills are typical characteristics of long-term unemployed. Older workers, migrant workers, ethnic minorities, as well as people with health problems or disabilities are also more vulnerable to long-term unemployment. Many long-term unemployed face multiple barriers to labor market integration. International experience suggests that intensive and comprehensive approaches are needed to effectively support the long-term unemployed. The European Union (EU) has put in place a 'Recommendation on the integration of the long-term unemployed (LTU) into the labor market' highlighting the need for prevention, individualized support and partnerships with employers and other institutions to effectively support this group. Single, isolated measures (e.g. training or wage-subsidies alone) tend to be ineffective. While there is an increasing interest to serve the long-term unemployed in Kosovo (e.g. social assistance beneficiaries), structures and resources of the Employment Agency of Kosovo (EARK) will need to be strengthened to effectively support this target group. Current structures and resources (e.g. in terms of caseload of counselors) are not suited to provide the intensive support the long-term unemployed require. In order to build its capacity to serve the LTU, EARK may need to consider a mix of short-term strategies (incl. partnerships with non-public providers to overcome internal capacity constraints) and medium and long-term strategies (i.e. build capacity, increase resources, and experiment with tailored intervention strategies).

Employment and Unemployment --- Labor Markets --- Labor Policies --- Social Protections and Assistance --- Social Protections and Labor