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Active Labor Market Program (ALMP) Policy Structure Study on East Asia
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Active Labor Market Program (ALMP) Policy Structure Study on East Asia
November 18, 2012Sam GorhamG2 Strategic Partners
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What We’ll Cover …
Active Labor Market Program (ALMP) Overview
Multi-Factor Productivity (MFP) Overview
East Asia Historical Trends
Scenario Overview
Interventions Overview
Policy Options
Recommendation
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What is ALMP?
An employment policy tool intended to increase the quality of the labor supply and demand
Includes job creation, training, and employment services that can affect labor demand and labor supply
The overall objective is to increase employment and income
What is MFP & Why is this used in this study?
Multifactor productivity, known as MFP, includes assumptions and estimates of the growth of human and social capital as the knowledge growth and diffusion of knowledge into the growth rate (MFR)
The MFP model combines capital, labor, and MFR in the computation of GDP
Analyzing the MFP model will help policy-makers assess if ALMP is warranted
East Asia Historical Trend Examples
Population has increased 93% from 1960 and 2010
GDP per capita has increased 671% from 1960 to 2010
Adult literacy rate has increased 61% since 1970
R&D per capita increased 122% between 1996 and 2006
Scenario Overview
Base case Policy First scenario Sustainability First scenario
Interventions Overview Results
As the multi-factor productivity growth additive factor increases, the region’s economic freedom increases
As the growth rate of a system leader increases, the productivity rate in the region increases
As the number of networked people increases, East Asia’s potential for growth increases
As health spending decreases, the MFP growth rate decreases
As the value of education increases, GDP increases
Policy Options
As East Asia policy-makers review investment opportunities for ALMP, they should carefully consider that ALMPs include a wide range of activities to stimulate employment and productivity
Recommendation & Conclusion
Recommendation: East Asia should gradually continue investment in ALMP but be realistic about what ALMPs can do
Bibliography
Active labor market programs & activation policies. Retrieved on November 2, 2012 from web.worldbank.org/WBSITE/EXTERNAL/TOPICS/
Barro, R. & Sala-i-Martin, X. (1995). Economic Growth, McGraw-Hill, New York.
Betcherman, G., Dar, A., Luinstra, A., & Ogawa, M. (2000, January). Active labor market programs: policy issues for East Asia. The World Bank.
Hughes, B. & Hillebrand, E. (2006) Exploring and Shaping International Futures. Boulder, CO: Paradigm Press.
International Futures. Hughes, B. (2011). University of Denver. Retrieved on September 30, 2012 from http://www.ifs.du.edu/
