World Bank Document · 2016-07-16 · CURRENCY EQUIVALENTS (Exchange Rate Effective March 31st, ... CCT Conditional Cash Transfer ... Empleo y Seguridad Social

Document of The World Bank

Report No: ICR00001395

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-73690)

ON A

LOAN

IN THE AMOUNT OF US$350 MILLION

TO THE

ARGENTINE REPUBLIC

FOR A

HEADS OF HOUSEHOLD TRANSITION PROJECT

April 26, 2010

Human Development Sector Department Argentina, Chile, Paraguay and Uruguay Country Management Unit Latin American and the Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective March 31st, 2010)

Currency Unit = Argentine Peso AR$ 3.876 = US$1

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS AGN Auditoría General de la Nación (National Audit Agency) ANSES Administración Nacional de la Seguridad Social (National Administration of Social

Security) CAS Country Assistance Strategy CCT Conditional Cash Transfer CIC Centro Integrador Comunitario (Community Integration Center) EPH Encuesta Permanente de Hogares (Permanent Household Survey) GDP Gross Domestic Product HH Head of Household ICR Implementation Completion and Results Report IERIC Instituto de Estadística y Registro de la Industria de la Construcción (Institute of

Statistics and Registry of the Construction Industry) M&E Monitoring and Evaluation MIS Management Information System MSD Ministerio de Desarrollo Social (Ministry of Social Development) MTESS Ministerio de Trabajo, Empleo y Seguridad Social (Ministry of Labor, Employment and

Social Security) OE Oficinas de Empleo (Employment Offices) PAD Project Appraisal Document PAMI Programa de Asistencia Médica Integral (Integral Medical Assistance Program) PDO Project Development Objectives SAMEEP Servicio de Agua y Mantenimiento Empresa del Estado Provincial (Provincial Water

Service and Maintenance Company) SEPA Sistema de Ejecución de Planes de Adquisiciones (Procurement Plan Execution System) SOE Statement of Expenditures SWAp Sector-wide Approach TA Technical Assistance UK United Kingdom UOCRA Unión Obrera de la Construcción de la República Argentina (Argentine Construction

Workers Union) US United States

Vice President: Pamela Cox

Acting Country Director: Stefan Koeberle

Sector Manager: Helena Ribe

Project Team Leader: Theresa Jones

ICR Team: Theresa Jones and Marcela Salvador

ARGENTINA HEADS OF HOUSEHOLD TRANSITION PROJECT

CONTENTS

Data Sheet A. Basic Information

B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design...............................................12. Key Factors Affecting Implementation and Outcomes ..............................................43. Assessment of Outcomes ............................................................................................84. Assessment of Risk to Development Outcome.........................................................195. Assessment of Bank and Borrower Performance .....................................................206. Lessons Learned........................................................................................................247. Comments on Issues Raised by Borrower/Implementing Agencies/Partners...........25Annex 1. Project Costs and Financing..........................................................................28Annex 2. Outputs by Component..................................................................................28Annex 3. Economic and Financial Analysis .................................................................47Annex 4. Bank Lending and Implementation Support/Supervision Processes.............49Annex 5. Beneficiary Survey Results ...........................................................................51Annex 6. Stakeholder Workshop Report and Results...................................................58Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR.....................59Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders .......................64Annex 9. List of Supporting Documents ......................................................................71MAP

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A. Basic Information

Country: Argentina Project Name: Heads of Household Transition Project

Project ID: P055483 L/C/TF Number(s): IBRD-73690

ICR Date: 06/29/2010 ICR Type: Core ICR

Lending Instrument: SIL Borrower: REPUBLIC OF ARGENTINA

Original Total Commitment:

USD 350.0M Disbursed Amount: USD 350.0M

Revised Amount: USD 350.0M

Environmental Category: C

Implementing Agencies: Ministerio de Trabajo

Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 11/24/2004 Effectiveness: 05/18/2006 05/18/2006

Appraisal: 04/15/2005 Restructuring(s):

Approval: 03/23/2006 Mid-term Review:

Closing: 12/31/2007 09/30/2009 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Moderate

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies:

Moderately Satisfactory

Overall Bank Performance:

Moderately SatisfactoryOverall Borrower Performance:

Moderately Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Other social services 99 99

Sub-national government administration 1 1

Theme Code (as % of total Bank financing)

Improving labor markets 33 33

Other accountability/anti-corruption 17 17

Social safety nets 33 33

Vulnerability assessment and monitoring 17 17 E. Bank Staff

Positions At ICR At Approval

Vice President: Pamela Cox Pamela Cox

Country Director: Stefan G. Koeberle Axel van Trotsenburg

Sector Manager: Helena G. Ribe Ana-Maria Arriagada

Project Team Leader: Theresa Jones Theresa Jones

ICR Team Leader: Theresa Jones

ICR Primary Author: Theresa Jones

Marcela Ines Salvador F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The Project Development Objectives are to help: (i) reduce poverty by supporting the workfare component of the Heads of Household Program, including continued improvements in Program management and governance; and (ii) promote activities aimed at getting more beneficiaries of this Program into full-time employment, thereby enabling them to graduate from the Program. Activities to promote labor market participation by

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beneficiaries would include: (i) workfare sub-projects designed especially to promote employability, for example, by combining them with training, skill certification, and targets for job placement; (ii) support for productive micro-projects; and (iii) the establishment and support to municipal offices of employment services. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Share of participants in lower half of income distribution rising from 88 to 92 percent;

Value quantitative or Qualitative)

88% 91.3% 91.3%

Date achieved 05/18/2006 12/31/2007 12/31/2009 Comments (incl. % achievement)

Indicator 2 : No less than 20 percent of those Heads of Household beneficiaries participating either in workfare activities designed to facilitate employment or training couses, placed in jobs;


Not less than 20% 19.2% 16.4%


Indicator 3 : No less than 20 percent of beneficiaries of grants for productive projects engaged in activities generating income at least equal to AR$150/mo after 18 months of operation


Not less than 20%

Date achieved 05/18/2006 Comments (incl. % achievement)

Indicator 4 : No less than 100,000 (current or newly) ineligible participants dropped from Heads of Household Program.

Value quantitative or

0 333,667 542,357

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Qualitative) Date achieved 05/18/2006 12/31/2007 12/31/2009 Comments (incl. % achievement)

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : No less than a third of the recipients of grants for productive projects enrolled in the Registro de Efectores one year after receipt of the materials and equipment from the grant;

Value (quantitative or Qualitative)

0 23% 28.5%


Indicator 2 : No less than 300,000 Heads of Household participants interviewed in employment offices;


No less than 300,000 329,476 381,125


Indicator 3 : No less than 150,000 Heads of Household participants having taken a labor orientation course; and


No less than 150,000 49,195 95,499


Indicator 4 : No less than 5,000 Heads of Household participants having completed either primary or secondary education cycle.


0 No less than 5,000 2,473 5,943

Date achieved 05/18/2006 12/30/2007 12/30/2007 12/31/2009 Comments (incl. %

v

achievement)

G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 06/18/2006 Satisfactory Satisfactory 105.88 2 10/02/2006 Satisfactory Satisfactory 130.55 3 05/19/2007 Satisfactory Satisfactory 214.70 4 11/01/2007 Satisfactory Satisfactory 261.56 5 03/05/2008 Satisfactory Satisfactory 286.57 6 12/01/2008 Satisfactory Satisfactory 304.94 7 06/30/2009 Satisfactory Satisfactory 349.42 8 12/29/2009 Satisfactory Satisfactory 350.00

H. Restructuring (if any) Not Applicable

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

A. Country and sector issues

Argentina was recovering from a deep economic crisis. At the height of the economic crisis in April 2002, the Government had created a massive emergency safety net, the Heads of Household Program (Program), which was supported by the World Bank (Ln.7157). Economic growth averaged 9 percent during 2003-2005, resulting in a recovery of GDP to its pre-crisis peak. During the upturn, the incomes of the poor grew faster than the average for the population, in part reflecting the impact of the Heads of Household Program. Although the poverty rate fell from its peak of 60 percent to 38.5 percent by the first half of 2005, it was still above the pre-crisis level of 30 percent. Economic growth had improved job creation and social conditions but much remained to be done to help those who had yet to benefit from the recovery.

With the normalization of the economic and social situation, in October 2004, the Government decided on a two-prong transition strategy for the Program to be jointly managed by the ministries of Social Development and Labor1. The strategy was to distinguish among the current Program beneficiaries those that had higher re-employment chances from those that at least currently required a different type of longer-term safety net, linked to building human capital for children. The strategy was termed ‘transitional’ as it aimed to support and test several approaches to raise beneficiaries’ human capital and employment prospects, while at the same time facilitating the transfer of beneficiaries from the current Heads of Household Program to other programs. On March 29, 2006, the Government announced further measures in the transition strategy through the creation of a non-contributory Training and Employment Insurance. Initially, the insurance would only be available to current Heads of Household Program beneficiaries who could opt to switch to the new program.

B. Rationale for Bank assistance

The Bank had supported workfare programs in Argentina since 1995 and worked closely with the Government in the social sectors for two decades. The Bank had collaborated for many years with the Ministry of Labor, in capacity-building and implementation of a previous workfare program (Trabajar), as well as with the Ministry of Social Development in other safety net activities. The Bank had assisted the Government’s crisis response by financing the workfare part of the Heads of Household Program, promoted governance and management reforms in the Program, and helped to evaluate its impact. The Project supported the Country Assistance Strategy (CAS) overall objective of helping to reduce the extent and severity of poverty in Argentina and, specifically

1 Ministry of Labor, Employment and Social Security.

2

through the CAS pillar of social inclusion. It also was closely related to the Bank’s broader role in helping the Government to redirect the emergency programs toward programs that would address medium-term challenges and promote more equity in opportunities for those who had yet to benefit from the economic recovery, including through higher employment levels.

1.2 Original Project Development Objectives (PDO) and Key Indicators The Project Development Objectives were to help: (i) reduce poverty by supporting the workfare component of the Heads of Household Program, including continued improvements in Program management and governance; and (ii) promote activities aimed at getting more beneficiaries of this Program into full-time employment, thereby enabling them to graduate from the Program. Outcome Indicators (targets set for December 2007, the original closing date):2

(i) Share of participants in lower half of income distribution rising from 88 to 92 percent3;

(ii) No less than 20 percent of those Heads of Household beneficiaries participating either in workfare activities designed to facilitate employment or training courses, placed in jobs;

(iii) No less than 20 percent of beneficiaries of grants for productive projects engaged in activities generating income at least equal to AR$150/mo after 18 months of operation; and

(iv) No less than 100,000 (current or newly) ineligible participants dropped from the Heads of Household Program. 4

Intermediate Results Indicators:

(i) No less than a third of the recipients of grants for productive projects enrolled in the Registro de Efectores (and therefore registered as self-employed who would have to pay taxes after receiving a tax break for two years) one year after receipt of the materials and equipment from the grant;

(ii) No less than 300,000 Heads of Household participants interviewed in employment offices;

2 All outcome and intermediate results indicators are net of expected transfer of beneficiaries to the Familias Program. 3 Using data from Permanent Household Survey calculated for individuals post-program payment. 4 This figure includes remaining, albeit small, errors in eligibility, but also new ineligibility during 2006-2007 (e.g., beneficiaries not complying with the work requirement, their child exceeds the eligible age, results of follow-up on new fraud allegations, results of cross-checks with more databases).

3

(iii) No less than 150,000 Heads of Household participants having taken a labor orientation course; and

(iv) No less than 5,000 Heads of Household participants having completed either primary or secondary education cycle.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification There were no revisions to the Project Development Objectives or key indicators.

1.4 Main Beneficiaries, The primary target group was the beneficiaries of the Heads of Household Program who were to be supported to improve their employment outcomes and graduate from the Program. Some of the resources of the loan were also directed to activities to strengthen the capacity of the Ministry, in particular, its initiative to promote a municipal network of employment services and test strategies and instruments to be used to deliver these services.

1.5 Original Components (as approved)

Component A: Heads of Household Program Subprojects. Most loan resources were allocated to financing the transfer payment to those beneficiaries of the Heads of Household Program complying with the requirement to participate in workfare or training/education activities. An important aim of the Heads of Household Transition Strategy was to increase the number of participants who improved their employability by completing basic education, participating in training courses, combining the work requirement with on-the-job training, and participating in sub-projects designed to provide experience and skills for future jobs. Component B: Heads of Household Productive Subprojects. This component supported the provision of grants for productive sub-projects proposed by small groups of Program participants to finance the cost of tools, equipment and inputs. Component C: Employment Services. This component supported the establishment and strengthening of employment services in some municipalities. Component D: Governance Improvements and Monitoring & Evaluation. This component supported governance improvements in the Program and activities of the Ministry of Labor to assist small and medium-sized businesses to meet labor and social security regulations.

1.6 Revised Components

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As explained below, a Project amendment added a component - Activities to Promote the Employability of Participants in the Training and Employment Insurance.

1.7 Other significant changes In mid-2007, the Ministry of Labor and the Bank discussed changes that were needed in the Project in order to address several issues: the continuing decline in workfare compliance; the deterioration in the quality and consistency of the administrative data used to support loan disbursements; and the desire of the Government to extend the closing date. At the same time, the economic context had continued to improve and good progress was being made on the transition strategy, including the decision of some beneficiaries of the Heads of Household Program to opt for the Training and Insurance Program. It was agreed to amend the Project in order to move from supporting the overall workfare part of the Heads of Household Program, to supporting only activities directly linked to improvements in employability. This change also reduced the Project’s fiduciary risk because of the narrower eligibility for financing, as well as the use of more robust administrative data to support disbursement requests. The amendment narrowed eligibility to only those Program beneficiaries participating in activities directly related to improvements in employability (education, training, self-employment subprojects, and combined training/workfare subprojects). The monthly transfers for the Training and Employment Insurance participants engaged in the same activities were made eligible for financing under the Loan, effective October 1, 2007. In addition, the disbursement percentage for these transfers was increased to 90 percent. The Country Director approved these changes. Support to the Training and Employment Insurance fell under the second development objective of the Project. There were no major changes in implementation arrangements.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry Project preparation and design reflected sound analytical and operational analysis derived from Bank involvement in helping the Government respond to the economic crisis, including the original Heads of Household project. Starting in 2004, the Bank supported the Government to develop a transition strategy for the Heads of Household Program, working with the Ministries of Labor and Social Development, in collaboration with the Inter-American Development Bank. The Project incorporated lessons from best practice on workfare design, experience from the previous project, and international experience on employment services and grant financing for productive projects. The Project was intended to support Government in its transition strategy for the Heads of Household Program. The development objectives reflected the transition in the Program by combining its continued operation with improvements in management and governance, as well as the promotion of activities aimed at getting more beneficiaries into full-time employment. These objectives were clear, realistic and important. The transition strategy was an important policy area for the Government and the Project was

5

consistent with the objectives of the strategy to reorient the Program laid out in Decree 1506/04. The Project design built on activities financed under the previous project, but also included innovations such as upgrading workfare activities to improve the employability of participants and support to establish a municipal network of employment services. All components supported achievement of the objectives of the Project and the transition strategy. The Project built on the installed capacity of the Ministry of Labor, which was experienced in the management of previous workfare programs and Bank-financed projects. The transition strategy involved two ministries, but this was necessary given the differentiated approach required for beneficiaries and coordination was satisfactory.

2.2 Implementation The Project was extended twice, the first time by a year, to December 31, 2008, and the second time to September 30, 2009. There were two significant delays early on. First, Bank senior management postponed Board presentation by about 8 months until the Government completed a review of the files of Heads of Household Program participants and addressed any findings, and pending a review by the Bank of any additional remedies and risk mitigation measures which were needed in order to reduce the risks of irregularities and ensure the benefits of the Program. During this period the number of participants in the Heads of Household program declined by 20 percent. Since the largest expenditure category of the loan financed transfers for temporary workers under the Program, this delay reduced the pace of disbursements possible under the loan. Second, works (construction) subprojects did not start being approved until almost a year after Project effectiveness because it took longer than expected to finalize the operational manual. In addition, municipal elections in late 2006 delayed the submission of sub-project proposals. This caused some problems in the execution of these subprojects.

In general, the activities aimed to improve employability were more difficult to implement than expected, in part because the economic recovery made it hard to attract participants who had competing opportunities to earn money through informal work. Enforcement of the work or training/education requirement - historically a problem in the Program – was weak. The supply of training and education courses, especially of adequate quality, was insufficient in many municipalities. In the case of the productive subprojects, there were delays in the activation of the National Register of Participants in Local Development and the Social Economy.

The risks identified in the Project Appraisal Document were generally relevant and adequately mitigated. Strong economic growth during the period supported an improvement in labor market conditions, facilitating the transition strategy and after some initial hesitation, many municipalities opted to establish employment offices. The Ministry of Labor persisted in improving governance of the Program.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

6

Design is assessed as partially satisfactory. Adequate indicators were identified to monitor progress towards the Project Development Objectives, drawn mostly from either existing administrative data or the Permanent Household Survey. The choice of indicators was consistent with the objectives of the Project – temporary employment for the poor in the Heads of Household Program, governance improvements in the Program, and promotion of labor market insertion for workfare participants. The monitoring indicators developed for specific components were fairly comprehensive and operational (Selected indicators are in Annex 2). The fact that the Permanent Household Survey contained a question on Program participation was a significant advantage, facilitating close monitoring and serving as an independent check on the less robust local administrative data on workfare compliance. However, the proposed designs for impact evaluations of employment services and for construction sub-projects were overly ambitious. In the case of the former, the design did not take into consideration the time necessary to install capacity to provide employment services. In the case of the latter, the design was impractical given its complex implementation arrangements. M&E implementation was satisfactory. The Ministry of Labor demonstrated strong capacity in this area and had qualified staff. Data was collected on a timely basis and was made available to operational staff in the Ministry and the Bank. Monthly indicators were collected on overall trends in the Heads of Household Program and in the Training and Employment Insurance. The national database on formal employment was cross-checked periodically in order to track formal employment outcomes. Collection mechanisms were appropriate and attention was paid to ensuring quality and consistency. The arrangements appear to be sustainable beyond the Project as they are being extended to other activities of the Ministry. Although no impact evaluations were carried out, the Bank and Ministry staff developed alternate arrangements. High-quality and useful ex-post evaluations were carried out for the construction and productive subprojects. In order to track progress on the installation of employment services, the Bank and the Ministry collaborated to design and implement a survey of employment offices. One minor difficulty was that owing to internal political disagreements within the Government, after the release of the data for the 1st quarter of 2007, the databases for the Permanent Household Survey were not made public. Although this was a limitation, by that point in time, the Bank and the Borrower were discussing the amendment which discontinued financing of the overall workfare part of the Heads of Household Program, making this information less crucial. The databases were made available again in 2009. M&E utilization was satisfactory. Monitoring indicators were reviewed and used to measure progress and to identify problems for all components. Findings of the ex-post evaluations were used to modify some procedures and to take remedial actions. There could have been more effort to monitor the progress and effectiveness of the Project and the transition strategy as a whole across (and between) the different components and areas of the Ministry of Labor. Feedback mechanisms and use of the data to inform

7

decision making were adequate at the activity level, but less pro-active at an overall and more strategic level.

2.4 Safeguard and Fiduciary Compliance The implementing agency (Ministry of Labor) failed to ensure the carrying out of the monthly concurrent audit, as stipulated in the Loan Agreement. There were several problems with the concurrent audit. First, although it should have started when the Project became effective in May 2006, the agreement between the Ministry of Labor and the National Audit Agency was not signed until November 2006. Second, although the Ministry and the Bank received oral briefings from AGN on the results of their field work, receipt of the reports lagged because of internal administrative delays within the audit agency, as well as the fact that the agreement with the Ministry did not specify the delivery dates. The first report was not received until October 2007. Only 3 additional reports were received (December 2007, September 2008, and July 2009). The field work covered 9 months out of 40 months of project execution. An important reason for carrying out the concurrent audit was to facilitate the issuing of an audit opinion on the Project financial statements. In spite of the spotty performance on the concurrent audit, the delivery and the findings of the annual financial audits were satisfactory. Minor weaknesses included the delayed receipt of one annual audit and a qualification on the opinion for the 2008 audit. There was relatively little procurement in the Project since cash transfers to beneficiaries accounted for 85 percent of loan proceeds. In relation to the procurement carried out under the Project, the Ministry of Labor experienced difficulties in complying with Bank policy and procedural requirements including the use of the Procurement Plans Administration System (SEPA) and of correct procedures, and timely notification of changes to the Bank. 2.5 Post-completion Operation/Next Phase While the Heads of Household Program was an effective program for mitigating the effects of the 2001-02 crisis, it was designed as an emergency program and was never intended to be part of a longer-term social protection strategy. Beginning in 2005, the Government implemented a transition strategy to phase out the Program, which was supported by the Project and completed in 2010, a year earlier than expected. The Bank continues to assist the Government of Argentina to strengthen its social protection system. The Lifelong Learning and Training Project (Ln. 7474) supports active labor market policies of adult education and training to increase the employability and productivity of workers, in addition to the installation of a competency-based qualifications and training system and a youth employment program implemented through the municipal employment offices. The objective of the Basic Protection Project (Ln.7703) is to increase the effectiveness of Argentina’s income transfer programs for the unemployed and families with children, by improving selected design features and the transparency and accountability of Family Allowances and the Training and Employment

8

Insurance. Other specific activities of the Project which aimed to increase employability have been incorporated into the regular structure of the Ministry of Labor. In March 2009, through Ministerial Resolution No. 274, the Ministry of Labor established a budget category for productive subprojects in order to continue support for self-employment, creating a specific area responsible for the activity.

At the beginning of the Project, in part a result of the economic crisis and the rapid scale-up of the Heads of Household Program, about 600 consultants were financed under the loan, a situation recognized as undesirable by the Bank and the Government. The Ministry of Labor agreed to reduce progressively the number of consultants financed by the Project by 50 percent, mainly through their gradual incorporation into the administrative structure of the Ministry. Starting from 610 people in July 2006, by December 2007 the project financed 202 individuals, well below the target of 300. There were further decreases to 103 in December 2008 and 60 by project closing in September 2009.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation The objectives, design and implementation of the Project remain consistent with Argentina’s development priorities and with Bank country and sector assistance strategies. In the most recent Country Partnership Strategy (2010-2012)5, under the pillar for social inclusion, the objective is to “consolidate the reduction in poverty and expand efforts to reverse the longer-term poverty trend by increasing household incomes and integrating marginalized groups into the productive marketplace, to be supported through programs to improve the employability of the most vulnerable”. The report highlighted the dialogue and solid analytical work that had been undertaken to move the Heads of Household Program from emergency income support to a more comprehensive, long-term and sustainable strategy for social protection as well as to a focus on increasing the employability of the poor. Argentina’s generally strong economic performance provided an appropriate context for Project implementation.

3.2 Achievement of Project Development Objectives This section discusses progress on the transition strategy, and achievements on the two development objectives. Table 1 (p.11) contains the data for the key indicators, showing actual performance at both the original and revised closing dates. For details on component outputs see Annex 2.

5 Report No. 48476, May 6, 2009.

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Progress on Transition Strategy As Figure 1 shows, progress on the transition strategy was good. By November 2007, there were about 770,000 beneficiaries in the Program, 30 percent lower than a year earlier and below the enrollment projected in the PAD (940,000). The decrease reflected the transfer of beneficiaries to the Familias conditional cash transfer program and the Training and Employment Insurance, the continued application of controls and governance measures by the Ministry of Labor, and growth in employment. By December 2009, there were only 353,888 beneficiaries in the Program.

Figure 1: Trends in Transition Strategy for Heads of Household

January 2005 – December 2009

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

0

180,000

360,000

540,000

720,000

900,000

1,080,000

1,260,000

1,440,000

1,620,000

1,800,000

Jan-

05

Jul-0

5

Dec

-05

Jan-

06

Jul-0

6

Dec

-06

Jan-

07

Jul-0

7

Dec

-07

Jan-

08

Jul-0

8

Dec

-08

Jan-

09

Jul-0

9

Dec

-09

HH Beneficiaries (Left Axis) Transfer to Seguro (Right Axis)Transfer to Familias (Right Axis) Exit to formal employment (Right Axis)Exit for other reason (Right Axis)

Source: Ministry of Labor

On October 2009, the President signed Decree No. 1602 that gives almost all children under 18 a monthly allowance (US$46), extending a benefit which had been available only for formal salaried workers’ children to children of unemployed and informal workers, and made it conditional on some health and education requirements. All participants in the Heads of Household and the Familias Programs were automatically transferred to the new benefit6. To date, 3.5 million children are registered in the new family allowance (non-contributory), slightly exceeding the number of children of formal employed workers who were already receiving the benefit from the contributory system. Before the reform, family allowances reached about 30 percent of households, by providing benefits to low and middle-income formal salaried workers. They had a small progressive impact on income distribution and reduced poverty (2 percent points based on 2006 data). The reform announced in late 2009 represents an effective approach to

6 Participants in the Training and Employment Insurance with children have to opt for one or the other benefit.

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increase the impact of the Argentine social protection system on the welfare and human capital formation of the poor. Ex-ante simulations show that, if family allowances were extended beyond their current beneficiary population, to cover all children in the first and second quintiles, extreme poverty would drop from 8 percent to below 3 percent of the population, at a cost of only 0.5-0.6 percent of GDP7.

Development Objective 1: To reduce poverty by supporting the workfare component of the Heads of Household Program, including improvements in Program management and governance. Previous analysis had shown that overall the Heads of Household Program had been successful in reaching the poor and mitigating the impact of the social and economic crisis8. Data from the household survey (2nd semester 2006) confirms the continued poverty reduction impact of the Program. In its absence, extreme poverty would have been about 1 percentage point higher (7.8 percent vs. 8.9 percent) with a similar impact on poverty levels (25.0 percent vs. 25.8 percent). The poverty gap would have been higher (10.2 percent vs. 11.2 percent), as well would the Gini Index (0.477 vs. 0.482)9.

In relation to the indicators for the first development objective, the target for the first outcome indicator was met, while the target for the second was exceeded by a substantial margin. The share of participants in the lower half of the income distribution rose from the baseline value of 88 percent to 91.8 percent in the first semester of 2007 and to 94.2 percent in the first semester of 2009. The number of ineligible participants dropped from the Heads of Household Program was more than double the target of 100,000 and the trend continued during 2008-2009, reflecting the activities to improve the beneficiary registry and other governance improvements. In spite of the Project’s performance-based disbursement mechanism, workfare became a less relevant intervention, reflecting among other factors, a favorable economic context that generated more job opportunities. The share of Heads of Household participants in eligible training and education activities, or working 20 hours or more weekly in workfare activities, declined steadily from 55 percent in the second half of 2004 to slightly less than 30 percent in the first half of 2007 (Table A2.1 Annex 2). This trend motivated the amendment which narrowed eligibility for transfer financing at the end of 2007.

Table1: Heads of Household Project - Key Indicators

Indicators Targets set for original Value Value

7 Basic Protection Project (Report 47874-AR), May 4, 2009) and Argentina-Income Support towards the Bicentennial (Report 44194-AR, 2009).

8 See Galasso, Emanuela and Martin Ravallion (2004) “Social Protection in a Crisis: Argentina’s Plan Jefes y Jefas”, World Bank Economic Review, 18(3): 367-399, and Galasso, Emanuela (2004) “An update on the impact of the program Jefes y Jefas”, World Bank, processed.

9 See Table 5.3, p. 65, Argentina-Income Support towards the Bicentennial (Report 44194-AR, 2009.

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closing date (12/ 2007) 12/2007 12/2009 Outcome indicators

(i) Share of participants in lower half of income distribution rising from:

88% to 92% EPH 1st S 2007

91.8%

EPH 1st S2009

94.2%

(ii)

Number of ineligible participants (current or newly) dropped from Heads of Household Program.

No less than 100,000 333,677 542,357

(iii)

Percentage of Heads of Household beneficiaries participating either in workfare activities designed to facilitate employment or training courses, placed in jobs.

No less than 20 percent of those beneficiaries.

19,2%

(Jan. 06 /Dec. 07)

19.9%

(Jan. 06 /Dec 09)

(iv)

Percentage of beneficiaries receiving grants for productive projects engaged in activities generating income at least equal to AR$150/mo after 18 months of operation.

No less than 20 percent of those beneficiaries.

Not available 35.4%

Intermediate Results Indicators

(i)

Percentage of the recipients of grants for productive projects enrolled in the Registro de Efectores (and therefore registered as self-employed that would have to pay taxes after receiving a tax break for two years) one year after receipt of the materials and equipment from the grant.

No less than a third of recipients

23% 28.5%

(ii)

Number of Heads of Household participants interviewed in employment offices.

No less than 300,000 329,476 381,125

(iii)

Number of Heads of Household participants having taken a labor orientation course.

No less than 150,000 49,195 124,91110

(iv)

Number of Heads of Household participants having completed either primary or secondary education cycle.

No less than 5,000 2,47311 5,94312

Development Objective 2: To promote activities aimed at getting more beneficiaries of the Heads of Household Program into full-time employment, thereby enabling them to graduate from the Program.

This section summarizes the contribution of the Project activities which were intended to contribute to the achievement of the second development objective. These included: (i)

10 Includes HH and SCyE beneficiaries with individual labor orientation interviews at the employment offices (95.499) beneficiaries in labor orientation courses (19.580) and beneficiaries in labor orientation courses for independent work (9.832). 11 Partial data covering only thirteen provinces. 12 Idem footnote 9.

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education and training; (ii) workfare subprojects designed to promote employability by combining them with training and skill certification, (iii) support for productive micro-projects; and (iv) the establishment and support to municipal offices of employment services. The focus is on achievements on the key outcome and intermediate results indicators (Table 1). Education and Training. Activities included professional training and completion of basic education. The objective of increasing the number of Heads of Household participants in these activities faced several challenges: insufficient supply of training courses of reasonable quality; the lack of flexible provincial adult education systems; and less than expected counseling of participants given the incipient stage of employment services. Nevertheless, the Program did generate more demand for second chance adult education, and some progress was made in increasing the “weight” of training and education as a participant activity, from 11 percent in 2007 to 20 percent in 2009 (Table A2.2 Annex 2). The intermediate results target of no less than 5,000 participants having completed either the primary or secondary education cycle was not reached by the end of 2007 (the original closing date), but was exceeded by 20 percent by the revised Project closing date. Given the scarcity of flexible modalities it took more time than expected for adults to complete the basic education cycles. These figures also underestimate the actual results of the Project. It proved difficult to obtain information on certification, so the data only reflects the results for 13 out of 24 provinces and is missing the province of Buenos Aires, the largest and proactive in adult education. Workfare Subprojects – Construction. A sector that the Ministry of Labor had identified as promising for generating employment opportunities for Heads of Household and Insurance participants was construction. In order to increase employability, Heads of Household participants interested in construction worked on small infrastructure projects. Participants were to receive on-the-job training towards certification and access to a basic social insurance package available for construction workers13.

Based on the data available at the end of 2009, the training results fell well short of expectations. For about 80 percent of the subprojects covered in the sample for the ex-post evaluation, the results achieved on training were rated as low for a variety of reasons. The tutoring had taken place, but actual construction had been delayed, so participants had gotten little practical experience. Participation of beneficiaries was low, while many of those who did the actual work already had sufficient experience. For some subprojects, the final visit of a representative of the construction union, necessary

13 The Libreta de Aportes is an obligatory document provided by the National Registry of the Construction Industry in order to record information on the employment history of construction workers. The document records the required contribution by the employer during the duration of the contract, to be used to finance an unemployment benefit, which can be accessed by a worker if unemployed. Contractors often require workers to show the libreta before hiring them, before it reduces paperwork for the employer.

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in order to receive the Libreta de Aportes (libreta) had not taken place. As of December 2009, only 1060 libretas had been delivered. While this represented around 60 percent of the participants who had worked in subprojects completed by that date, it represented only 10% of total participants, reflecting significant delays and other implementation problems. The figure was likely to go up since the delivery of about 800 additional libretas was in process at the end of 2009. In sum, implementation of this activity turned out to be very challenging, and would have benefited from more intense and pro-active management. These challenges included: coordination between the training and the construction activities; balancing the importance of the training with the construction activity; and the labor market context. (See annex 2 for more details). Productive subprojects The Project provided support to small groups of beneficiaries of the Heads of Household Program to finance the cost of tools, equipment and inputs for productive activities. An ex-post review of a sample of the productive subprojects (Cirstina Cogliati 2008) rated them on sustainability, trends on production and sales, income levels for the workers, and the quality of management. Slightly over 80 percent of the subprojects were in operation. Within that group, 44 percent were ranked high, 17 percent were ranked medium, 15 percent were ranked low, and the remaining quarter were unsustainable. Taken together the subprojects ranked as either high or medium on sustainability represented two/thirds of those still in operation or about half of the total sample. According to the information gathered, all enterprises ranked as highly sustainable generated stable employment for the participants. For about a third of the sample, the participants earned more than the minimum wage; for only a few active enterprises were earnings lower than the transfer that they received from the Heads of Household Program. Two performance indicators relate to this subcomponent. In line with the information presented above, results on the outcome indicator which measures the share of beneficiaries able to earn through the enterprise more than AR$150/mo. after 18 months of operation, are positive at slightly over a third, above the target of 20 percent. The intermediate indicator is the share of participants who are enrolled in the Registro de Efectores one year after receipt of the materials and equipment. As of December 2009, 2200 projects were registered in the Registro de Efectores, slightly over 40 percent of the total. Because not all participants working in an enterprise necessarily registered, the share of participants is lower at 28.5 percent, falling slightly short of the target of a third of participants. Implementation difficulties with the registry are likely to have contributed to the shortfall. Performance is still judged satisfactory for two reasons. One, registration is important because it is difficult for enterprises to sell their goods or services on a reasonable scale unless they provide receipts. However, this is possible as long as at least one participant in the group registers. Also, in the case of family enterprises, if one member was registered he/she could obtain benefits for other family members. Overall Performance

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The table below shows the accumulated participation of Heads of Household and Insurance Program beneficiaries in the main activities designed to promote employment. The number of participants which exited because they obtained formal employment is provided for reference. The increase in the “weight” of these activities in the Program was modest; even by the end of the Program when the number of participants was much smaller, only slightly over 20 percent were in activities to promote employability. The third results indicator measures the employment outcomes of these activities. Actual performance fell only slightly shore of the target of no less than 20 percent as of 2007, but met the target as of 2009. As of December 2007, 19.2 percent of the beneficiaries participating either in workfare activities designed to facilitate employment or training courses, were placed in jobs, and by December 2009, the share had increased slightly (19.9 percent).

Table 2: Promoting Employability Activities

Number of HH/Insurance beneficiaries

December 2007

December 2009

Attended professional training 29,469

60,422

Attended school 99,345

129,768

Participated in community infrastructure sub-projects

3,083 11,023

Participated in productive sub-projects 4,747 12,846 Other 900 Total 136,644 214,959 As share of total beneficiaries 12.1% 22.6% Exited for formal employment 204,815 318,251

Training and Employment Insurance The Training and Employment Insurance contributed to the objective of employment and graduation for Heads of Household participants. First, there was a two year time limit on participation. As shown in Figure 2, by the end of 2009, approximately 125,600 workers had participated in the Insurance. Nearly 58,900 exited because they reached the time limit.14 Another 23,600 left the program because they got a job, or to a lesser extent, accessed a pension.

Figure 2: Total participants and participants leaving Seguro, by reasons

14 Because of the international economic crisis that affected Argentina, in early 2009, the Ministry approved a one year extension of the time limit for the Insurance for any participant who would reach the original 2 year limit through December 2009 (Res. No. 241, March 2009). In total 36,020 participants were reincorporated.

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Seguro beneficiaries (Left Axis)

Exit to formal employment (Right Axis)

Exit to pensions (contributory and non-contributory) (Right Axis)

End of contract (Right Axis)


Second, an explicit aim of the Insurance was to promote participation in activities to improve employability. Beneficiaries signed an agreement stipulating a schedule of appointments at the employment office and their agreement to follow-up on the advice provided. Figure 3 shows the extent to which access to and coverage of the Insurance increased, measured by the number of municipalities (employment offices) implementing the program, as well as the share of individuals participating in activities designed to promote employability. About 50 percent of individuals participated in an activity at some point and between 20-30 percent were participating at any one time (as measured by monthly rates of participation). In addition, participants of the Insurance were required to attend counseling and follow-up meetings at the employment offices. On average, participants actually received 5 sessions.

Figure 3: Participation in Seguro activities and number of EO

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Seguro beneficiaries (Left Axis)

Beneficiaries doing counterpart (Right Axis)

Employment Offices (Right Axis)


Employment Offices The Project supported the establishment of municipal offices of employment services, the provision of technical assistance and equipment, and the testing of instruments to work with clients. The number of offices reached 168 by the end of 2007 and 310 by the end of 2009, exceeding by a substantial margin the target of 100 set out in the PAD. There are two relevant intermediate results indicators. The goal that no less than 300,000 Heads of Household beneficiaries would be interviewed in employment offices was exceeded by 10 percent by end 2007 and by nearly 30 percent by the end of 2009. These individuals were by and large those participants who were interviewed as part of the transition of beneficiaries to the Employment and Training Insurance. There was a substantial shortfall on the 2nd indicator (no less than 150,000 Heads of Household beneficiaries having taken a labor orientation course) as of December 2007, but the gap was narrowed by December 2009, with achievement only 17 percent below the target. The shortfall is explained by a combination of factors:

• It proved difficult to find competent staff for the employment offices, particularly in the northern region, where there is a concentration of Heads of Household participants. Staff had particular problems to put in place the labor market orientation courses. For that reason different modalities for delivering the course were tested, including subcontracting (See Annex 8, p. 60 for more details).

• Participation in the courses was voluntary.

• Because of difficulties in the operation of the management information system, not all participants in the courses were registered. In addition, although the

17

subcontracting option mentioned above had some success, its use is likely to have contributed to under-reporting.

In order to provide more information on the status of service provision and other operational aspects, a survey of employment offices was carried out at the end of 2009 and beginning of 2010. A summary of the findings of the survey is contained in Annex 8.

3.3 Efficiency The economic and financial analysis takes into account the fact that with the continued decline in the compliance with the work or education/training requirement, the Heads of Household Program became less and less a classic workfare program. Thus the cost effectiveness framework for a workfare program is no longer relevant. The efficiency of the Project is assessed positively based on: (i) the improvements in already good targeting to the poor; (ii) demonstrable impact on reducing poverty and inequality; (iii) the sustainability of selected subprojects; and (iv) the lack of an increase in the value of the transfer level consistent with the objective of promoting the transition strategy. Details are in Annex 3.

3.4 Justification of Overall Outcome Rating The overall outcome rating is assessed as satisfactory. The relevance of the Project was high. The transition strategy was implemented well and ahead of schedule. Performance on all 4 results indicators was fully satisfactory; in two cases achievements exceeded the targets. Results on the intermediate indicators were not as good. However, in the 3 (out of 4) indicators with shortfalls, the gap was largely made up by the actual closing date for the Project. Efficiency is satisfactory as well, given the poverty impact, the evidence of the quality and sustainability of the productive and works subprojects, and the maintenance of the value of the transfer.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development

This section covers gender aspects, since poverty impact is discussed in Section 3.2. When the Project started, nearly 70 percent of the beneficiaries of the Heads of Household Program were women, and this share increased during implementation. Based on the initial experience of working with these beneficiaries, staff of the Ministry recognized the need to increase gender considerations. In order to work specifically in this area, the Ministry supplemented Project resources with a grant from the Gender Action Plan. In particular, the Ministry developed materials to be used in activities for domestic workers (the main previous employment experience of the participants of the Heads of Household Program). The grant, still in execution, aims to improve the quality of employment services, particularly for low-income women in the Heads of Household Program and the Training and Employment Insurance, by incorporating methodologies and practices promoting gender equality within the Directorate of Employment Services

18

of the Ministry of Labor, as well as the employment offices. For the latter, the grant aims to strengthen capacity to interact with employers and to counsel female jobseekers. (b) Institutional Change/Strengthening The Project helped to increase the institutional capacity of the Ministry of Labor in several areas. First, there were substantial investments financed by the Project to improve the information systems in the Ministry, in particular the platform used to register those participants in education and training activities attending activities sponsored by the Ministry or receiving financial support in the form of per diems. The information system supporting the eventual installation of a lifelong learning system is building on this platform. In addition, the project supported capacity strengthening in the area of employment services, particularly for the staff of the Ministry of Labor. (c) Other Unintended Outcomes and Impacts (positive or negative)

Not applicable

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops During implementation of the Project there were consultations on the role and design of income transfers carried out in the context of analytical and advisory activities.15 There were two main instruments: first, a set of consultations with policy makers and practitioners in social policy, mainly at the provincial level (over 300 consultations); and second, a nationally representative opinion survey on the views and perceptions of the population. The survey found that there is a consensus that the current income support programs are important, regardless of whether there is a crisis. Less than 30 percent of the population would like to eliminate income support programs even if they could not be improved. A majority (61 percent) agreed that “programs are always needed because there are people who need them,” whereas 28 percent agreed that “programs are only needed during economic crisis”. Similarly, 41 percent believe that poverty would be worse in Argentina without the programs, 38 percent think that unemployment would be worse, and 37 percent think that inequality would be negatively affected. The consultations and survey indicated a strong interest in linking income transfers to the labor market. While there is debate about the level to which social programs should be linked to the labor market, both the consultations and the survey sent strong messages, that employment should be an objective of social policy, and that labor market incentives and opportunities should be considered in policy design. Related to this sentiment, there was nearly universal support (93 percent in the survey) for some form of conditionality to be included in the design of social programs. The potential beneficiary population expressed a strong preference for programs with tangible labor market outcomes. Beneficiaries prefer programs that would provide

15 The findings of the consultations and survey are summarized in Argentina: Income Support Policies towards the Bicentennial, Report no. 44194-AR.

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training, employment services, and ideally a guaranteed job upon completion, even if it would mean a lower benefit amount or duration of eligibility. This finding indicates strong support for the Training and Employment Insurance which combines a cash benefit with employment services.

4. Assessment of Risk to Development Outcome Rating: Moderate For both objectives, implementation is well aligned with the operating environment in Argentina and the Bank. The assessment of risk to development outcome takes into account that the Project was intended to support the Government in its transition strategy for the Heads of Household Program, rather than to support longer term social policy. Progress on the transition strategy exceeded expectations. At the end of 2009, the Heads of Household Program was eliminated as all remaining beneficiaries were automatically transferred to a family allowance. This decision is highly unlikely to be reversed. Under the second development objective, many activities to promote employment were intended to lay the base for broader support to poor unemployed and workers seeking to improve their employment conditions. This is the case, for example, for training and education and for employment services. In regards to the former, the Ministry of Labor has an eventual goal of installing in Argentina a lifelong learning and training system linked to employment, which is being supported by a Bank-financed project. This is a long term process which will require substantial efforts. Bank Support and monitoring would continue under Ln. 7474. In the case of employment services, progress in their installation exceeded the targets in the PAD, but there was a shortfall on achievements in service delivery. The offices will continue to be supported and monitored by the Bank under Ln. 7474 because of their role in the youth employment component – evidence itself of a continuation of their envisaged role in the social protection system in Argentina. The installation of a municipal network of employment offices providing effective services is a long-term effort. For both education and training activities and public employment services, it is too soon to predict their outcome, although signs up to now are favorable. There is a question mark on the Training and Employment Insurance. Since it is incompatible with the family allowance, if it continues to exist, it would have a smaller role than anticipated when it was launched in the management of the risks associated with unemployment and low qualifications.

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5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Moderately Satisfactory

The Bank’s performance in ensuring quality at entry was moderately satisfactory for the following reasons. The Bank’s long involvement in public works programs in Argentina via investment lending and support for monitoring and evaluation is reflected in the quality of background analysis and project design. The Bank’s support to the development of the transition strategy for the Heads of Household program ensured the strategic relevance and approach of the Project. The Project incorporated lessons from the previous loan. Project preparation included an independent quality review organized at the request of the task manager in order to get technical input on the strategy to increase the employment focus. Expertise from the United Kingdom on employment services contributed to project preparation and dialogue with the Borrower. The role of the Heads of Household Program in reducing poverty and in making growth post-crisis more pro-poor had been established in previous analytical work. It was expected that this impact would diminish as economic recovery permitted the phase-out of the Program. The social assessment was useful in revealing the opinions of stakeholders on the current operation of the Heads of Household Program and the new activities proposed. It included a study to explore the capacity and willingness of municipalities to carry out the activities intended to promote employability, as well as four local level consultations undertaken with the Ministries of Labor and Social Development to share views on the transition strategy. Particular efforts were made to strengthen fiduciary safeguards, including the incorporation of suggestions from specialized Bank departments. However, there are moderate shortcomings. One, while monitoring indicators were appropriate and drawn from the management information system of the Ministry of Labor or the Permanent Household Survey, the Bank team proposed impact evaluation designs which were too ambitious, particularly given the incipient stage of the employment services. Two, the performance-based disbursement design was over-optimistic on the ability of the Government to turn a trend of declining work compliance, particularly in the absence of any change in the legal or institutional framework for the Heads of Household Program. As a result, it did not achieve its intended objective as an incentive for better performance in this area (b) Quality of Supervision

Rating: Satisfactory Performance is rated satisfactory for the following reasons. The team focused on development impact by closely monitoring and reporting on the key indicators and the transition strategy. Bank staff carried out enhanced supervision activities (Box 1) and

21

was pro-active in identifying as problematic the decline in workfare compliance and came up with a solution that continued to support the transition strategy while managing and reducing project fiduciary risk. The regular procurement and financial management reviews were carried out and the ratings reflected in the ISRs16.

Supervision inputs and processes were adequate. Supervision visits were undertaken and ISRs prepared twice a year. The presence in the field of a highly qualified consultant experienced with Ministry of Labor programs and Bank procedures was crucial for the enhanced supervision, facilitated communications with the Borrower and timely resolution of problems, and generated more knowledge on local implementation of Project activities. The Bank arranged the participation of OECD expertise on 3 occasions to provide technical assistance and review progress on the installation of employment services. The Bank organized a trip to the US and to the United Kingdom for a Ministry of Labor team for in-depth discussions with service operators. The quality of performance reporting was satisfactory. Staff highlighted progress in the transition strategy, including trends in the Heads of Household Program and the Training and Employment Insurance, implementation issues with specific components and delays in receipt of the concurrent audit reports. Management reviewed and commented on issues raised in the ISRs. Supervision included discussions on transition arrangements.

16 Later ISRs showed lower ratings in financial management than in the reviews after taking into account the deficiencies in carrying out the concurrent audit.

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Box1: Enhanced Supervision Activities and Results

Enhanced supervision included field visits by Bank staff to make spot checks, preparation of monthly reports on Heads of Household Program trends for Bank senior management and press monitoring.

Spotchecks. Following on the experience under the previous Heads of Household Project (Ln. 7357), the Bank was concerned about the quality of the administrative data of the Ministry of Labor, specifically the extent to which the municipal data captured in the MIS of the Ministry, which was the source of the information presented in the Statements of Expenditure (SOEs), was consistent with actual workfare compliance. For that reason Bank staff carried out several spot checks of this consistency in selected municipalities. The spot checks showed a decline in the consistency of the administrative data of the Ministry compared with the information at the municipal level from about 70 percent to 35 percent (June/July 2006 to October 2007). After discussing the results with the authorities of the Ministry of Labor, two actions resulted. First, the Ministry of Labor instructed its provincial offices and the municipalities to review the information and adjust as necessary. Second, the Bank and the Government decided to amend the loan agreement in order to narrow the eligibility for transfer payments to those participants for which more robust information was available from the MIS.

Monthly Monitoring Reports . From February 2006 to July 2007 Bank staff sent a monthly report to Bank senior management containing short-term monitoring indicators for the Heads of Household Program, covering the following areas: total program enrollment, progress on the transition strategy, complaints received and their resolution, workfare compliance rates, targeting efficiency indicators, and the results of the spot checks (Table A2.7 in Annex 2).

Press Review. Bank staff reviewed systematically the coverage of the Heads of Household Program in the national and provincial press. With the exception of irregularities reported in one province on the execution of construction subprojects, on which the Ministry of Labor took remedial actions, the press reports did not include allegations or evidence of irregular use of the Program.

(c) Justification of Rating for Overall Bank Performance Rating: Moderately satisfactory Taking into account the two moderate shortcomings identified in Bank performance in ensuring quality at entry, overall Bank performance is rated moderately satisfactory.

5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The Government was committed to the Heads of Household Transition Strategy and supported the specific actions of the Ministry of Labor and the Ministry of Social Development to carry it out. The effective coordination between the two ministries demonstrated that this was Government policy. The enabling environment was supportive. Strong macroeconomic management during the period of Project implementation promoted strong employment growth, facilitating progress on the transition strategy. Overall project implementation was monitored by the Ministry of Economy, as well as the Office of the Chief of Cabinet, including discussion of the

23

amendment in 2007. The decision by the Government in late 2009 to put in place a non-contributory family allowance completed the transition from the emergency Heads of Household Program, although it did raise questions about the sustainability and future role of the Training and Employment Insurance. Minor shortcomings included the unavailability until recently of data from the Permanent Household Survey, which had been an important source of monitoring data for the Heads of Household Program, and the weak performance of the National Audit Agency on the concurrent audit. (b) Implementing Agency or Performance

Rating: Moderately Satisfactory

The Ministry Labor through the Secretariat for Employment was responsible for implementation of most of the Project, with the exception of one activity under Component E which was carried out by the Secretariat of Labor. The agency was highly committed to implementation of the transition strategy and improvements in the employability of the participants of the Heads of Household Program. Consultations with stakeholders and local governments regarding the transition strategy were good. The Project was ready for implementation as the transition strategy had been announced; subsequent announcement of the Training and Employment Insurance strengthened this strategy. The goals set out in the Project for the transition strategy were superseded. Those positive features notwithstanding, there were some shortcomings. Overall coordination of the Project activities occurred mainly in the administrative area, while technical responsibilities for specific activities (construction subprojects, productive subprojects, Training and Employment Insurance, employment offices) were distributed throughout the Ministry. Given the challenges in increasing the employment focus and results, overall Project direction and the management of some components would have benefited from a more pro-active and coordinated approach. Problems were resolved, but perhaps took more time to surface because there were few individuals who monitored all the activities being implemented and the information on results. There were shortcomings on compliance with covenants related to financial management, as well as with procurement guidelines. Monitoring information was adequate, but did not seem to be used to its full potential to influence Ministry decisions. There were delays in the start-up of the construction sub-projects and less utilization than expected of the per diem expenditure category. The time for Project execution was about double what had been expected (43 months vs. 22 months). (c) Justification of Rating for Overall Borrower Performance

Given the moderate shortcomings identified in the performance of the Implementing Agency, the Overall Borrower Performance is considered moderately satisfactory.

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6. Lessons Learned

• The Heads of Household Program had been a successful crisis response, but it is important for emergency programs to have an explicit exit strategy once the emergency is over. The experience of the Project shows that this is possible. In addition, the actions the Government took during the transition have laid the base for activities that could be part of a longer term social protection strategy, for example, the public employment services.

• Supported by the Ministry of Labor, a substantial number of municipalities in Argentina decided to establish public employment services. While this is an encouraging development, experience under the Project suggests that the installation of a network of public employment services takes time and will be a long-term effort requiring further efforts at capacity building and performance management in order to install an effective system.

• It is important to ensure that the specific interventions for which the Bank is providing assistance are framed within a broader policy dialogue that provides a consistent strategic context. The longer term goal of generating conditions of employability for those marginalized from the labor market was initially addressed through the Heads of Household Transition Project, but the longer term challenges involved in creating quality employment services will continue to be addressed through other suitable instruments, in this case under the Life Long Learning Project

• In the absence of flexible delivery systems (self-directed learning, module and pertinent curriculum, and tutoring support) for adult education, it is difficult to scale-up services and attract students. This activity might have achieved more results if arrangements for second chance education had been more appropriate and if there had been more attention to results.

• Process evaluations can be an important monitoring tool. When new services are being installed, as was the case for the employment services, process evaluations may be more appropriate than an impact evaluation, and in any case should precede an impact evaluation, in order to know what is being evaluated.

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• Initiatives to promote employment are likely to be more effective if combined with up-front counseling, in order to ensure that training is suitable and of interest to the potential participant. This is turn makes the training more effective in improving employability. The lack of up-front counseling may be part of the reason for the disappointing results on the construction subprojects.

• Another strategy to make training more effective in improving employability is to focus on a sector with expanding employment. With sufficient knowledge and cooperation, training can be tailored to the specific needs of that industry. This occurred in the case of Chaco in the component of construction projects (See Annex 2). It is a good practice which could service as a model.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies The Heads of Household Program played an important part in the Social Protection sector, simultaneously serving two problems that affected the population: unemployment, which generated poverty because of a lack of income, as well as more structural poverty situations.

The Argentine government launched a support strategy for poor households where the head was unemployed. This strategy adopted different policies over time so as to accompany changes in the labor market as well as the population’s needs.

In this sense, the Secretary of Employment considers it appropriate to evaluate the Heads of Household Project as a whole, analyzing it as a social safety net policy in the context of crisis and reflecting on some lessons learned, beyond the financing of the two loans, highlighting that both completed the objectives proposed as established in the Loan Agreement and the PAD, and supported the policy guidelines established by the Argentine Government. One of the most significant contributions of the Project to Government strategy was the support for the strengthening and expansion of the network of municipal offices of employment. The municipal employment offices represent a key institution for the implementation of active labor market policies, mobilizing local resources and capacity in order to offer options for the most vulnerable workers to improve their employability, and playing a role to strengthen the supply of local education and training services.

Lessons Learned:

1. In order to respond to a crisis, there is a need for a rapid and massive response in order to be able to help the vulnerable through social and economic contingencies. The plan for exiting the program should be progressive; ensuring that the population remains in the social protection system since recuperation and opportunities for the most vulnerable sector of the population is slower than in other economic indicators.

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2. In order to rapidly design and implement on a social policy on such a large scale, certain conditions and minimum institutional capacities need to already be in place for it to begin to function. At the same time it is necessary to maintain a monitoring and evaluation framework of results that allows for systematic and constant improvement linked to governance and continuous improvement.

3. The addition of new local actors in the administration of policies assured proximity to those in a vulnerable situation, and to the unemployed who sought out employment opportunities.

a. Strengthening and creating local institutions with a growing capacity to develop strategies for people with employment problems. Development of strategies for institutional strengthening in the local environment: young people and adult education system, job centers, professional training institutions.

b. Despite the efforts and investment that were carried out to strengthen capacity, the processes of construction or reconstruction of institutions do not always advance at the same pace as the needs of the programs and policies. This was the situation for formal education options and professional training institutions as well as municipal employment offices. Local level capacities varied greatly, and as a consequence, the quality and coverage of the services provided was also diverse. .

4. Development of an exit strategy should be based on the beneficiaries’ voluntary decision to embark upon possible personal development and social inclusion. There is a need for institutional environments close to the beneficiaries in order to guide them in aspects linked to human development, as well as processes of labor insertion. This strategy implies at the same times risks related to the availability (or not) of the human, institutional and financial resources necessary to achieve these objectives.

5. Administrative decentralization allowed for greater proximity to heterogeneous situations of poor and unemployed workers, as well as more effective problem solving and promoting employment and other opportunities. This was an important element in designing the program’s exit system.

Conclusions:

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The objectives of the Heads of Household Program were sufficient to help households affected by poverty and unemployment during the crisis of 2002. The performance was highly satisfactory in terms of targeting, reaching the poorest households and carrying out a decisive role for the first phase of economic recuperation since it benefitted the population with fewest resources.

The improvement in the general economic and social situation has provided the Government with a new challenge in terms of social policy, with the need to approach the process of reorienting the Heads of Households Program, towards new political strategies, establishing different alternatives for beneficiaries according to their needs, capacities and opportunities with a central focus on decent employment. The Training and Employment Insurance, the Plan Familias for Social Inclusion and recently the Asignación Universal por Hijo, constitute a more appropriate and effective social protection strategy in the current economic context than the Heads of Household Program for those individuals who ho, post-crisis, have not been able to find quality employment.

(b) Cofinanciers

Not applicable (c) Other partners and stakeholders Not applicable

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)17

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

Component A: Heads of Household Program Sub-Projects (Community Services and Works, Training, and Basic Education)

2,199.00 1,406.60 64.0

Component B: Heads of Household Productive Sub-Projects

23.00 35.5 154.3

Component C: Training and Employment Insurance

229.10

Component D: Employment Services

5.00 5.12 102.4

Component E: Governance Improvements and Monitoring & Evaluation

2.70 3.00 111.1

Total Baseline Cost 2,229.70 1,679.32 75.3

Physical Contingencies 0.00

0.00

0.00

Price Contingencies 0.00 0.00

0.00

Total Project Costs 2,229.70 1,679.32 75.3 Front-end fee PPF 0.00 0.00 .00 Front-end fee IBRD 3.50 0.00 .00 Total Financing Required 2,233.20 1,679.32 75.2

(b) Financing

Source of Funds

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower 1,883.2 1,329.3 70.6 International Bank for Reconstruction and Development

350.00 350.00 100.0

Annex 2. Outputs by Component

17 Significant variances with appraisal estimates due in the case of Component A to faster implementation of transition strategy than expected and the addition of Insurance component with the 2007 amendment and in the case of Component B to the Government’s decision to provide more than expected counterpart resources.

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The Project supported key components of the Heads of Household transition strategy:

• Continued funding of Heads of Household transfer payments of workfare participants during the transition phase. Workfare activities would include new, employment oriented fulfillment of the work requirement (Component A);

• Promotion of small-scale productive activities by groups of beneficiaries through the provision of grants (Component B);

• As of October 1, 2007, funding for participants of the Training and Employment Insurance in eligible activities (Component C);

• Development of Employment Services (Component D); and

• Control and governance improvements in the Program (Component E).

Information on the outputs for each component follows below. Component A: Heads of Household Program Sub-projects (Community Services and Works, Training and Basic Education) General Workfare Activities Most loan resources financed the workfare part of the Heads of Household Program whose participants continued to receive AR$150 per month. At the time the Project was prepared most of the beneficiaries who were complying fulfilled their work requirement in community services (soup kitchens, child care, schools, health centers, etc.), municipal services (maintenance of buildings, cleaning of public spaces, etc.), or small construction projects. The Project design for this component, specifically related to the disbursements for the largest expenditure category in the loan (Category A – Remuneration for Temporary Workers) was performance-based. The disbursements of funds from Category A were to be paced in-line with the number of beneficiaries that participated in either a work or education/training or job-search activity18. The design reflected the importance the Bank attached to the work requirement and was intended to provide an incentive to the Government to continue efforts to improve the Program on a variety of fronts including enforcing controls over eligibility requirements, promoting the timely transfer of eligible beneficiaries to Familias, and expanding employment support activities and promoting the participation of Heads of Household beneficiaries. According to the agreed upon

18 Upon Project effectiveness, the Bank used a disbursement ratio of 40 percent of the amount of the transfer to beneficiaries that complied with the workfare requirement. The disbursement rate would: (i) increase to 55 percent if the combined share of beneficiaries in activities in which they work more than 15 hours and those in education and training activities reached 60 percent; and (ii) increase to 60 percent if the combined compliance exceeded 65 percent.

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disbursement mechanism, the share of Bank financing in total Program expenditure could vary depending on the overall workfare compliance rates of the Program Contrary to expectations and in spite of the performance incentives, the rate of workfare compliance did not improve. As shown in Table A2.1, the share of Program participants complying with the work requirement steadily declined, owing to several factors. A growing economy generated more informal employment opportunities for participants or their family members. And even for a reduced number of participants, the organization of sufficient, meaningful workfare activities and, more generally, enforcement of the work requirement, remained extremely difficult for many municipalities. The performance incentives (in the form of an increase in the base level disbursement rates) never took effect. This design feature was abandoned when the 2nd amendment took effect (March 25, 2008).

Table A2.1: Compliance with work requirement

II Semester2004

II Semester 2005

ISemester 2006

II Semester 2006

ISemester 2007

ISemester 2008

Work activities

20 hours or more 51.9 37.9 35.6 28.6 23.4 15.2

15-19 hours 6.3 5.0 3.7 4.6 2.4 1.36

10-14 hours 7.5 8.2 5.9 7.6 5.8 2.77

1-9 hours 8.0 8.8 8.1 9.0 9.2 8.16

Education & Training 3.6 5.5 6.2 3.5 4.9 3.9

None 22.7 34.6 40.5 46.7 54.4 68.7

Source: WB staff calculations based on EPH microdata.

Activities to Improve Employability An important aim of the Project was to increase the number of participants who improved their employability by completing basic education, participating in training courses, combining the work requirement with on-the-job training, and participating in subprojects designed to provide experience and skills for future jobs. Education and Training. The figures in the table below show the progress on increasing participation in education and training courses. Progress was impeded by the insufficient supply of training courses of reasonable quality, the lack of flexibility in the adult education systems in most provinces, and the lack of counseling of participants given the incipient stage of employment services in most localities. In spite of these difficulties some progress was made during the project and the “weight” of participation in training and education activities did increase.

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Table A2.2: Participation in Education and Training Indicators December

2007 December 2009

Number of HH or Insurance beneficiaries attending professional training

29,469

60,422

Number of HH or Insurance beneficiaries attending school

99,345

129,768

% of Average Total Number of HH and Insurance beneficiaries

11.4% 20%

Payment of Per diems

In addition to the monthly payment to participants, the Project financed per diems for beneficiaries participating in training and education activities, with the intention of covering the associated out-of-pocket costs of inputs and transportation. Participants enrolled in training or education activities could receive up to AR$50 more per month, for a maximum of 6 to 8 months. The payment of per diems was intended to promote the participation of beneficiaries in activities designed to improve employability. Although the availability of these payments probably had some impact on improving participation rates, utilization was slightly less than expected because of supply side constraints, the attraction of income-earning opportunities, and the weak enforcement of the work or training/education requirement. Also, although only the per diems for participants in the Heads of Household Program and the Training and Employment Insurance were eligible under the Project, the Ministry of Labor adopted a broader strategy of covering any unemployed participating in the same activities drawing on domestic resources, reducing the priority attached to participants in the two Programs.

Work Requirement Combined with Training One result of this part of the strategy was a partnership with PAMI (Programa de Asistencia Medica Integral – Integrated Medical Assistance Program), the national health program for the elderly (see box).

Box A2.1: Employment in Personal Services – Care for the Elderly The purpose of the agreement with PAMI was to train and obtain jobs for the unemployed in activities related to the care of adults either in their home or in specialized institutions. In order to implement this initiative an agreement was signed (Agreement No. 132/2006) between the Ministry of Labor – who financed and organized the training and identified the interested unemployed – and the Ministry of Social Development responsible for the national program of home care workers and the integrated medical program for the elderly (PAMI) that received the requests for qualified caregivers. The participants in the training became part of the official registry of home care workers, from which individuals were identified to meet the needs of the families requesting the services. During 2009, around 900 participants were trained in home care.

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Another result was a special effort related to domestic workers. One, as an incentive for these workers to become formal (have a legal contract) they were allowed to maintain the Program benefit for a year. 3500 female program participants became formal during the life of the project. Two, these women were advised on alternative occupations, material and training activities were developed, and compensatory strategies implemented to help promote their participation (related to transport costs, child care, monetary support, and adjusting the schedule for courses). 4000 women were trained in alternative occupations. Construction Subprojects The Ministry of Labor had identified construction as a promising sector to generate jobs. In order to increase employability, Heads of Household participants interested in construction jobs would get experience working on small infrastructure projects, sponsored mostly by municipalities. Participants were to receive on-the-job training towards certification and access to a basic social insurance package available for construction workers. In addition to the monthly transfer payment to the participants, the Project financed the cost of materials for these subprojects. The implementation and outputs of this activity are discussed below. The specific objectives of the activity were:

• Provide training in construction, certifying the competencies acquired through the Libreta de Aportes (libreta), occupational certification, and/or a training certificate;

• Promote employment of the beneficiaries taking into account their profile and interests and the local labor market, by providing employment services to them through Employment Offices or other organizations; and

• Promote the construction of infrastructure which would have a positive impact in the communities.

The Ministry of Labor contracted tutors to train participants simultaneously with their work on the subproject in order to ensure that the workers obtained sufficient knowledge in different areas. The Ministry also signed an agreement with UOCRA, the construction workers union, so that they would train the tutors, provide didactic materials for the on-the-job training, supervise the training carried out by the tutors, and if requirements were met, authorize the issuance of the libreta by IERIC. The libreta improves employment possibilities because potential employers generally ask for it to provide evidence of the knowledge and experience of the worker in construction. Even without the libreta, it was thought that the training itself might improve employability. The activities got off to a slow start. The first sub-projects were not approved until April 2007 (almost a year after Project effectiveness) because of delays in finalizing the design, and preparation of the operational manual and the necessary regulations. Municipal elections in late 2006 interrupted the submission of subproject proposals.

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Some of the adjustments made to a more traditional workfare design included: increasing the number of possible participants; ensuring adequate time for training; simplifying evaluation and supervision in order to focus more on training; and promoting typologies which needed less evaluation but which were assumed to have value for the communities, for example, rehabilitation of education and health infrastructure. An attempt was also going to be made to improve the process of beneficiary selection by making more efforts to publicize this opportunity, including by incorporating, in localities where they existed, the municipal employment offices to identify interested participants. There were minor adjustments during implementation. The Government requested a higher ceiling on the size of subprojects in order to take into account higher construction and other costs. The higher ceiling also allowed for financing of the construction of Integrated Community Centers (CICs), a program initiative promoted by the Ministry of Social Development, which had been included in the previous project. In these subprojects, the temporary workers (including participants of the Heads of Household Program) had to be organized in cooperatives. Construction or rehabilitation of facilities for employment offices was also added to the list of eligible typologies. As shown in Table A2.3, by the end of the Project, 1.408 subprojects were approved in which 11.023 beneficiaries participated. Some difficulties were experienced during implementation. Municipalities had problems accommodating their proposals to the design. As a result, about 40 percent of subprojects were not approved until the last 4 months of 2008, before the December cut-off which had been agreed between the Ministry and the Bank. This contributed to problems in the execution of subprojects. As of December 2009, only a third of the approved subprojects had been finalized, 16 percent were subsequently dropped, and 8.5 percent never started. A large number of subprojects (750) are still being executed. The distribution of proposals and approvals was unbalanced. Four provinces accounted for 80 percent of expenditures, although they only accounted for 20 percent of beneficiaries in the Program. The province of Tucuman alone accounted for 40 percent of expenditures, even though only 3 percent of beneficiaries resided there. Ensuring the participation of the beneficiaries of the Heads of Household Program continued to be problematic. In practice, employment offices played a minor role in identifying the appropriate participants. Supervision by the Ministry continued to focus more on the progress on construction, instead of the training activities.

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Table A2.3: Workfare projects by type (December 2009)

Types of projects Number

of Projects

Share % Beneficiaries Amount

(USd)

Educational Infrastructure 462 32.8 3429 7.9 Health Infrastructure 75 5.3 300 1.1 Sanitary and Water

Infrastructure 146 10.4 1572

3.1 Social and Cultural

Infrastructure 410 29.1 2587

7.6 Productive and Developmental

Infrastructure

49

3.5

221 0.7 Improvement of neighborhood

conditions

72

5.1

486

1.2

Integrated Community Centers Employment Offices

175 19

12.4 1.3

2154 274

10.6 0.4

Total 1408 100 11023 32.6

An ex post review of a sample of projects carried out in August 2009 found that:

• Municipalities were more interested in completing the infrastructure than in the participation of the beneficiaries.

• Possession of the Libreta de Aportes (Unemployment Insurance Notebook) increased employment possibilities.

• In spite of the recognition of the importance of the libreta to improve employability, the participation of Heads of Household beneficiaries was low and the works ended up being built by other workers who were not beneficiaries of employment programs. In addition, there were some participants who were not interested in future work in construction.

• Because of delays, relatively few projects had been completed, but those that were demonstrated good quality, were in use, and appeared to generate adequate public benefits.

Based on the data available at the end of 2009, training results fell well short of expectations. For about 80 percent of the sample subprojects in the ex-post evaluation, training results were rated low for a variety of reasons. The tutoring had taken place, but construction had been delayed, so participants had gotten little practical experience. Participation of beneficiaries was low, while many who did the actual work, already had sufficient experience. For some projects, the final visit of UOCRA – necessary in order to receive the libreta – had not taken place. As of December 2009, 1060 libretas had been delivered. While this represented around 60 percent of the participants who worked in projects which had been finalized, it was only 10 percent of total participants. This

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figure was likely to increase since delivery of a substantial number of libretas (830) was in process.

Table A2.4: Training Indicators – December 2009 Tutors contracted 636Projects with a tutor assigned 1079Libretas de Aportes delivered 1060Libretas de Aportes in process 830Certificates delivered 1118Trained participants, without libreta 730Trained participants, without final visit of UOCRA 790

In sum, implementation turned out to be very challenging and required more intense and pro-active management. The challenges included:

9Coordination between training and construction activities. It proved difficult to coordinate many different agencies and actors. The Ministry of Labor was responsible for transferring funds to municipalities. Municipalities had to ensure the availability of the other inputs needed to execute the works. The tutors, supervised and supported by UOCRA, were responsible for the training which needed to coincide with progress on construction. Finally UOCRA was responsible for the final assessment and requesting the libreta for selected workers. The correct scheduling of these activities was critical.

9Balancing the importance of training with the construction activity. The incentives of the different actors must be aligned. The implementing organizations (municipalities) were more interested in the works and the financing of the materials and neglected the training and/or hired qualified staff to advance more quickly and finish the infrastructure.

9Conditions of the labor market. The recovery in the construction sector which offered employment opportunities for many, including those with low qualifications, made it more difficult to attract beneficiaries interested in participating in this activity. One positive experience in which a province decided on a sector focus is described in Box A2.2.

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Box A2.2: Chaco – The Experience of the Provincial Water Supply and Maintenance Company (SAMEEP) in Construction Subprojects

The provincial government of Chaco decided to focus on water and sanitation where expansion of coverage was a priority with the potential to generate employment. The Ministry agreed to finance these subprojects, although the typology was not originally included in the eligible list. SAMEEP designed a strategy that facilitated the achievement of the twin objectives of infrastructure investment and training of Program participants, as well as the efficient use of available resources. Project resources were used to train and certify the competencies for those installing the water or sewerage services and their assistants. SAMEEP entered into an agreement with two provincial technical schools that designed the training and certified competencies. Practical on-the-job experience was obtained by extending the water and sewerage network into low-income neighborhoods. Because of the financing received from the loan, it was possible to subsidize these connections. The individuals who participated were added to a registry of potential new hires for the company. The extension of the network was expected to require more trained workers, especially for domestic connections and maintenance. About 3000 people participated of which 800 were contracted by the state enterprise for a year with a high probability of continuing their employment. Another 750 participants organized themselves into 53 cooperatives.

Component B: Heads of Household Productive Subprojects The Project provided support to small groups of beneficiaries of the Heads of Household Program to finance the cost of tools, equipment and inputs for productive activities and to provide technical assistance to beneficiaries. The table provides information on the types of activities. About 82 percent of the subprojects were concentrated in the categories of services/commerce, production of goods (not related to food), agriculture/fishing and agro-industry. About 69 percent of participants were women.

Table A2.5 Productive Projects by type (December 2009)

Types of Projects

Number of Projects

Share % Beneficiaries Amount (US$m)

Agro-industry 603 11.4 1531 2.07 Agriculture/fishing 989 18.6 2381 3.44 Non-food related production of goods

1373

25.9

3467 4.57

Production of construction goods

443

8.4

1041 1.49

Production of industrial inputs

19 0.4 53 0.07

Services and commerce 1410 26.6 3296 4.74 Personal services 172 3.2 390 0.54 Rural and agricultural services

40 0.8 93 0.13

Construction or building maintenance services

141

2.7

320 0.46

Machinery or appliance repair services

114

2.1

274 0.38

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Total 5304 100 12846 17.9

An ex-post review of a sample (150) of productive subprojects (Cirstina Cogliati 2008) rated them on sustainability, taking into account the adequacy of the infrastructure and equipment, trends on production and sales, workers’ income, and the quality of management19. Slightly over 80 percent of the subprojects were in operation. Among those in operation, 44 percent were ranked high, 17 percent were ranked medium, 15 percent were ranked low, and the remaining quarter were judged to be unsustainable. Those enterprises ranked as high had proactive participants, leadership and growth strategies. They set goals, consistently reinvested, identified market niches, and innovated. They had high quality products and services, combined with good marketing strategies and publicity. Taken together the subprojects ranked as either high or medium on sustainability represented two/thirds of those still in operation or about half of the total sample. The main problems identified were that the beneficiaries were not competent in the selected activity, had low working capital or problems with market access (low social capital, insufficient resources for transportation, and operating in the weak part of the value chain, in particular for textiles). The initial association of workers had been maintained in about 60 percent of the subprojects albeit with adjustments in some. Family businesses or groups with previous work relationships or strong ties of friendship were more likely to have maintained the association. The ex-post evaluation reviewed the type of employment obtained by the enterprises. Employment security for the participants depended primarily on the sustainability and consolidation of the enterprise and secondarily on its formalization. All enterprises ranked as highly sustainable generated stable employment for the participants. For about a third of the sample, the participants earned more than the minimum wage; only a few participants in active enterprises were earning less than the transfer from the Heads of Household Program. Many participants saw advantages in self-employment. Other findings included the following:

• The idea of working in a group is valued positively if it is voluntary and not artificially forced because it is a requirement for financing.

• Having previous experience in the activity is fundamental to sustain the subproject. Neither technical assistance, nor the advice of the municipality is sufficient to develop these competencies for the participants. Workers do develop competencies by participating in the subprojects.

• Commercialization is the main difficulty confronted by subprojects.

19 If enterprises had high rankings on all aspects they were ranked as high. Enterprises ranked as medium had less income, but were stable with potential to consolidate their positions. Enterprises ranked low faced various (or combined) difficulties. For some it was only a side activity to generate complementary income, for others there were problems with commercialization, and others lacked working capital. Those ranked as unsustainable had very low income, high informality and vulnerability. Bad facilities were a factor as well as the breakup of the association.

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• In most cases, the Municipality was able to assist the formulation of subprojects and to provide support once they were up and running. In large municipalities there was often a separate administrative unit providing support to the self-employed, but even in those cases, and more so for smaller municipalities, the capacity was not sufficient to cover all the subprojects. Experience showed that it was easier for enterprises to be successful in smaller municipalities.

• Beneficiaries should be provided technical assistance for equipment purchases.

On the sustainability of subprojects, the main findings were as follows:

• In all types of activities, there were examples of subprojects in which beneficiaries had substantial monthly incomes (i.e. higher than ARG$773). Nevertheless, in general low income earners (ARG$128) were concentrated in the activity ‘elaboration of manufactures’.

• The services category had the highest proportion of subprojects with stable or increasing sales.

• Subprojects with male participants generally achieved higher incomes and sustainability than ones with women. Formalization seemed to be harder to achieve for female participants.

• Commerce had the highest concentration of subprojects whose sustainability was ranked “high”.

• The ranking on management indicators was related to the performance of the subproject and the extent of market entry. Subprojects which generated higher incomes for the participants also had adequate registries and sufficient funds to reinvest in the activity.

• Projects ranked as more sustainable were more likely to ‘formalize’, partly because they had the necessary resources to comply with the requirements. About half of the active enterprises were inscribed in either the Registro de Efectores or alternative tax arrangement. Often only one employee in the group registered, so that the enterprise could issue receipts.

As part of a strategy to promote participation in the formal economy by disadvantaged groups, the Government created the National Register of Participants in Local Development and the Social Economy (Decree 189/2004). All beneficiaries who received financing to carry out a productive project under this component were encouraged to register. Initially, the Registry experienced some implementation problems. Not enough information was available, neither on the benefits nor on inscription procedures. Part of the problem was a lack of easy access at the local level. As a result, it took between 6-8 months to register. Also, it was difficult for the Ministry of Labor to access up-to-date information on inscriptions, since the Ministry of Social Development was responsible for the registry. The ex-post evaluation made same recommendations on how the Ministry of Labor could improve its support to self-employment. The principal goal of this activity should be to

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generate decent and quality employment, in practical terms earning a salary above the minimum wage with social security. Working capital requirements need to be considered more in subproject formulation and the financing plan. Participants and municipalities need to have more information on the activity. More training should be provided up front, when the subproject proposal is prepared. Municipalities should receive advice on the ways they can provide support. The provision of technical assistance to the participants is key, but had been challenging to implement. More attention needs to be paid to the skill level of the tutors and their training needs. Tutors also should interact more with Ministry staff. A system of supervision and monitoring of subprojects should be developed, separate from the provision of technical assistance. This system should collect general information about advances in the subprojects, as well as indicators of sustainability and employment quality, supplemented with periodic ex-post evaluations on a sample basis. Component C: Activities to Promote the Employability of Participants in the Training and Employment Insurance Program On March 26, 2006, the Government announced further measures in the transition strategy through the creation of the non-contributory Training and Employment Insurance. It was introduced to assist the beneficiaries of the Heads of Household Program to reenter the labor market in better conditions. It is administered by the Ministry of Labor through the municipal employment offices and combines a cash benefit with training, job search assistance, and job placement services. In order to participate in the Training and Employment Insurance municipal employment offices have to guarantee several basic services for the Insurance beneficiaries: the collection of information on work experience, supervise their job search, offer short workshops on job search or labor orientation and/or referrals to other available activities (job placement, support for self-employment, training, completion of basic education, or placement in temporary work). Following an interview to collect information on previous work experience, education and training, participants register and sign an agreement to join the program in which they commit to:

• Regular contact with the employment office

• Accept job offers received through the employment office;

• Participate in interviews and job placement workshops;

• Join training activities; and

• Exit the Heads of Household Program.

Participants are dropped from the Program if they find a formal job, after the expiration of the two year time limit, if they reject job offers without justification, or if they fail to comply with the conditions of their agreement. The Program provides beneficiaries with

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a monthly benefit for up to two years, ranging from AR$200-275 (close to 20 percent of the minimum wage), as well as accrual of benefits in the pension system. By the end of 2009, approximately 125,600 workers had participated in the Insurance. Nearly 69 percent of participants are women (compared with 72.6 percent in the Heads of Household Program). Insurance participants are slightly older and more educated than Heads of Household Program beneficiaries. The activities with the greater concentration of beneficiaries from the beginning of the Training and Employment Insurance to date are: professional training (27.9 percent), primary and secondary education (26.4 percent); and labor insertion in individual or associative productive projects (25.3 percent). Other activities with smaller weight but highly significant in terms of formal labor insertion are: 19.6 percent participated in employment subsidy programs in the public or private sector and 17.7 percent in subsidized on- the- job training. Component D: Employment Services The Project supported the establishment of a network of municipal employment offices. Given the resources and implementation period of the Project, the Ministry of Labor was expected to install capacity and ensure minimum employment services in at least 100 municipal employment offices. The municipal employment offices are responsible for interviewing job seekers, with priority for Heads of Household beneficiaries, but services are open to all unemployed and individuals interested in improving their employment status. After collecting information on work experience, individuals are referred to activities including: job placement, supervised job search, short workshops on job search or labor orientation, support for self-employment, training, completion of basic education, or placement in temporary work. The results of this component exceeded expectations. By December 2007, 168 offices had been established, and by December 2009, there were 310 offices. A summary of the findings of a survey of employment offices carried out in late 2009-2010 is in Annex 8. Component E: Governance Improvements and Monitoring and Evaluation The results of the main activities are summarized below, except for monitoring and evaluation covered in Section 2.3 of the main text. Expanded Continuous Audit. It was expected that the monthly continuous audit carried out under the previous Heads of Household Project with good results would continue. That audit had focused on the monthly process of paying beneficiaries. The terms of reference of the continuous audit under this Project was expanded to include spot checks of municipal management of the Program, particularly for workfare activities and construction and productive subprojects. The problems with the concurrent audit are described in Section 2.4. The reports from the concurrent audits included spot checks of the consistency of information on beneficiary compliance with the workfare requirements, the subcomponent of productive projects (delays in the purchase of inputs and equipment by municipalities), payments through debit cards, consistency of information on the activities of the participants in the Training and Employment

41

Insurance, and construction subprojects (delays in start-up, problems with availability of inputs and the lack of registry and evidence of the participation of the beneficiaries in the training activities). Improvements in the Heads of Household Beneficiary Registry. Achievements were good on improvements in the quality and completeness of the data in the registry. Specific activities included:

• The Ministry of Labor continued to carry out its monthly standard database cross-checks against registries of formal employees and recipients of other social transfers.

• The National System of Tax and Social Identification carried out monthly cross-checks of the Beneficiary Registry with other data bases, as well as cross-checked those participants included in the Statements of Expenditure (SOEs) submitted to the Bank. In the case of the former exercise, monthly reports with observations were sent to the Ministry which took the necessary remedial actions. No significant observations were made on the cross-checks of the beneficiary lists in the SOEs.

• Additional databases included a cross-check against beneficiaries (and their family members) in the contributory health insurance plans.

• The Ministry of Labor also cleaned up the database by identifying possible irregularities through internal consistency checks within the registry. In addition, beneficiaries were dropped from the registry based on information from the Commission on Allegations as well as supervision of municipalities and sub-projects by Ministry of Labor staff.

Information and Communication. The PAD highlighted the importance of facilitating good communications with other stakeholders, particularly in the context of the new activities associated with the transition strategy and to ensure transparency. The results are seen in the communications strategy for the Employment and Training Insurance. There were publicity campaigns in the national and local press in order to inform Heads of Household participants. Neighborhood meetings and personal mailings were used to provide information about the new program. The advance work and cooperation with the municipality was more intensive than was the case for the Heads of Household Program. In addition, the respective roles and responsibilities of the municipality and the Ministry of Labor are more clearly defined. Municipalities have the obligation to disseminate the Training and Employment Insurance, to register those who decide to participate in the insurance, and through the Employment Offices, link them with formal education and training opportunities. Stakeholder Activities. Many civil society organizations believed that there had been insufficient consultations with stakeholders in the early stages of the Heads of Household Program. Under the Project, the Ministry of Labor in coordination with the National Consultative Council of the Program, carried out 3 workshops in order to consult and

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provide information to non-governmental organizations, unions, business groups, private companies, professional training centers, among others. The activities were designed mainly to discuss the proposed Heads of Household Transition Strategy and to consult with civil society and government interlocutors involved in local social and employment policies. The participation of key staff of the Ministries of Labor and Social Development, and the National Consultative Council and local actors was effective This component also supported activities in the Ministry of Labor which aimed to help small and medium-sized businesses to meet labor and social security regulations in order to improve their compliance. The Ministry also worked with the tax authorities to simplify the registration of workers and to update regulations on home-based work. After a review of the functioning of a simplified system for registering workers and the associated database, several cross-checks of information were made automatic, incorporating the registry of formal workers as well as the results of workplace inspections. Firms can register their workers on line using the system called “Mi Simplificacion” and workers can verify their and their employer’s social security contributions. The Directorate of Labor Regulations completed a set of proposals to regulate domestic and home-based work, presented and discussed them with the authorities of the Ministry and other interested actors. Both proposals were important inputs for proposed legislation recently sent to the Congress.

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Table A2.6: Monitoring Indicators Indicators December 2009 Values

Beneficiaries 1 Number of beneficiaries 353,888 2 Percentage of exits:

- to formal employment - for ineligibility and other reasons - transfers to Plan Familia - transfers to Seguro

33.7 38.1 22.0 6.2

3 Targeting efficiency indicators: - beneficiaries w/o formal employment - beneficiaries with dependents - share of benefits going to bottom 50 percent

of income distribution

EPH 1st S 2009 99% 92%

94.2%

Budget/Process Indicators 1 Number of supervision visits to training and basic

education courses 6,330

2 Percentage of formal complaints for: - Ineligible beneficiaries - Extortion - Irregular payment - Others

95.6 2.7 0.2 1.5

Employment Services 1 Number of employment offices (EO)

Staffing 310

2,100 2 Number of HH beneficiaries interviews (labor history) 381,125

Number of HH beneficiaries who attended labor orientation course;

95,499

Training and Education 1 Number of HH beneficiaries attending professional

training 60,422

2 Percentage of HH beneficiaries who attended professional training employed

19.4%

3 Number of HH beneficiaries attending school 129,768 4 Number of HH beneficiaries students with completed

primary or secondary education 5,943

Subprojects for Temporary Employment 1 Number of community infrastructure projects (with

financing of materials) 1,408

2 Number of HH beneficiaries in community 11,023

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infrastructure sub-projects 3 Number of HH beneficiaries registered in National

Register of Participants in Local Development and the Social Economy

3,369

4 Number of productive projects with materials delivered 5,304

Table A2.7: Monthly Indicators Report (July 2007) Indicator Baseline (period) Most Recent Data Available

1. Program enrollment

December 04

1,587,261

July 07

890.943

2. Reduction of beneficiaries Total o/w due to - better controls/ gov - employment - transfer Familias prog. - transfer Seguro prog.

Jul 03/Dec 04

388,325 (100%)

58% 42% 0% 0%

Jan 05/ June 07

670,439 (100%)

38.7% 30.7% 25.0% 5.6%

3. Number of formal complaints, total o/w allegation of - ineligible beneficiaries - extortion - irregular payment - others

Jun 03/Dec 04

13,356 (100%)

87% 6% 2% 5%

Jan 05/June 07

14,982 (100%)

95.3% 2.4% 0.5% 1.9%

4. Solution of formal complaints

Jun 03/Dec 04

4,883 beneficiaries dropped

Jan 05/June 07

13,941 beneficiaries dropped

5. Compliance with work requirement Total - Work - Education - Training

July-December 04

61.8% 58.2% 2.3% 1.3%

July-December 06

40.1% 33.2% 3.2% 3.7%

6. Targeting Efficiency

- beneficiaries w/o formal employment

- beneficiaries w/

July-December 04

99%

90%

July – December 06

99%

92%

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dependents - share of benefits going to

bottom 50% of income distribution

86.4% 91.3 %

7. Results of Bank staff spot checks on quality of Ministry of Labor administrative data on extent of compliance with workfare requirement

May 05.

93%

October/November 06*

46.2%

Source: Permanent Household Survey, Administrative Data of the Ministry of Labor and World Bank staff estimates. * The project team conducted visits to municipalities, in May 05, two among the urban areas surrounding Buenos Aires, as well as

1 each in Rosario and Tucumán; and in August 06, 1 each in La Rioja and Catamarca, as well as 1 in the urban area surrounding Buenos Aires. The focus of these visits was to check the quality of the administrative data of the Ministry of Labor.

Explanatory Notes for Monitoring Indicators

1. Number of people receiving the Heads of Household Program monthly transfer payment. Source: administrative data of the Ministry of Labor available on website: www.trabajo.gov.ar

2. Number of people dropped from the Heads of Household Program with distribution by reason. Better controls/governance includes several mechanisms used by the Program to identify and drop beneficiaries who no longer meet the eligibility requirements, including cross-checks with other data bases and dropping those whose children exceed the age limits. Employment includes those who leave the program because they have secured registered employment. Familias is the program managed by the Ministry of Social Development which enrolls families with young children who then receive a transfer in exchange for a commitment to ensure that their children participate in stipulated education and health activities. The transfer of those Heads of Household Beneficiaries eligible for the Familias program is part of the transition strategy. The Seguro refers to the non-contributory Training and Employment Insurance managed by the Ministry of Labor. Heads of Household participants can voluntarily opt for this program which has a time limit for any individual of 2 years. Source: administrative data of the Ministry of Labor

3. Number of complaints received by the Ministry of Labor (through 0800 line, follow-up of press reports, written communications and referrals from the National Social Security Administration –Administración Nacional de la Seguridad Social, ANSES)20 relating to the Heads of Household Program and classification by type. Allegations of “ineligible beneficiaries” refer to denunciations of people that receive the transfer but are not eligible (e.g. they do not have children, they have a business, their spouses have a job, etc). Allegations of “extortion” refer to requests to beneficiaries for a share of the Program payment. Source: administrative data of the Ministry of Labor.

4. Number of people dropped from the Heads of Household Program as result of complaints received. Source: administrative data of the Ministry of Labor.

5. Percentage of beneficiaries who comply with the requirement of the Heads of Household Program to participate in eligible activities, mostly working in various types of community services (working in schools, soup kitchens, health centers, etc.), but also in training or education, for a minimum of 15 hours a week. The chart also shows the distribution by type of activity. Sources: Quarterly Permanent Household Survey and administrative data of the Ministry of Labor.

6. Data on extent of compliance among participants of the Heads of Household Program with some eligibility requirements of Program (be unemployed, have dependents below 18) and the performance of the Program in targeting lower-income groups. Formal employees are those with contributions to social security. Source: Quarterly Permanent Household Survey

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7. Periodic visits to municipalities, conducted by Bank staff to carry out spot checks of the quality of the administrative data of the Ministry of Labor provided to the World Bank on which beneficiaries are complying with the requirement of the Program to participate in eligible activities (community services, training, or education). The indicator is the extent of coincidence between the administrative data and the Source: World Bank staff reports.

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Annex 3. Economic and Financial Analysis The economic and financial analysis takes into account the fact that with the continued decline in compliance with the work or education/training requirement, the Heads of Household Program became less and less a classic workfare program. Thus the cost effectiveness framework for a workfare program is no longer relevant. The efficiency of the Project is assessed positively based on the following: Targeting Performance. At Project appraisal there was rigorous evidence that overall the Heads of Household Program was successful in reaching the poor and mitigating the impact of the social and economic crisis21. During project implementation, targeting performance – a key results indicator – continued to improve. The share of participants in the lower half of the income distribution rose from 88 percent to 92 percent (2007) and then to 94 percent (2009). Poverty Impact. Based on household survey data, the evidence is that poverty indicators and inequality would have been higher without the Heads of Household transfers. The share of population in extreme poverty would have been 8.9 percent instead of 7.8 percent, while poverty would have been 25.8 percent instead of 25 percent. The Gini index would have been .482 instead of .477. Sustainability of Selected Subprojects. The sustainability of subprojects supported by the Project was satisfactory. The ex-post review for the construction subprojects (under Component A) indicated that out of the sample visited, two/thirds had either medium or high quality. The conclusion was that most of the works were pertinent and had improved community conditions. An ex-post review of productive subprojects (Component B) found that 80 percent of the sample was still in operation. Taken together, the subprojects ranked as either high or medium on sustainability represented two/thirds of those still in operation or about half of the total sample. Value of Transfer. A major concern raised in the economic analysis in the PAD was that there was little room to increase the level of the transfer, particularly given the goals of the transition strategy. Government did not raise the transfer level during Project implementation, thereby promoting the exit of participants to employment.

Fiscal Analysis

Government spending on the Heads of Household Program declined from 1 percent of GDP in 2003 to 0.2 percent of GDP in 2007, and continued falling in 2009 to 0.11 percent. During the crisis, transfers associated with the Program relieved pressure on the budgets of both provincial and municipal Governments and modified the structure and

21 Social Protection in a Crisis: Argentina’s Plan Jefes y Jefas, by Emanuela Galasso and Martin Ravallion, World Bank Economic Review, Volume 18, 2004, #3, p. 367-399 and Note: An Update on the Impact of the Programa Jefes y Jefas, November 2004 by Emanuela Galasso (processed).

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distribution of financial transfers from the national Government. In 2003 the transfers associated with payments to the Program participants accounted for about a fifth of the total transfers from the national Government to the provinces. With the reduction in the size of the Program, this share dropped to 14.6 percent in 2007 and to 9.6 percent in 2008.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Lending Maria Lucy Giraldo Senior Procurement Specialist LCSPT Procurement

Theresa Jones Lead Operations Officer LCSHS-DPT

Task Manager

Luz Meza-Bartrna Senior Counsel Legal

Marcela Ines Salvador Consultant LCSHS-DPT

Social Protection

Maria Claudia Vasquez AlvarezConsultant LCSHS-DPT

Civil Engineer

Supervision/ICR

Jorge C. Barrientos Consultant LCSHS-DPT

Operations

Gaston Mariano Blanco Social Protection Specialist LCSHS-DPT

Social Protection

Daniel Chalupowicz Financial Management Analyst LCSFM Financial Management

Regis Thomas Cunningham Sr Financial Management SpecialistLCSFM “Ana Maria Grofsmacht Procurement Analyst LCSPT Procurement Febe Mackey Consultant HDNSP Assistant

Luz Maria Meyer Junior Professional Associate LCSFM Financial Management

Marta Elena Molares-Halberg

Lead Counsel LEGLA Legal

Demetra Nightingale Consultant LCSHS-DPT

Employment Services

Marcela Ines Salvador Consultant LCSHS-DPT

Social Protection

Maria Claudia Vasquez Alvarez

Consultant LCSHS-DPT

Civil Engineer

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs) Lending

FY99 9.14 FY00 2 3.93 FY01 16 62.00 FY02 11 52.71

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FY03 1.96 FY04 3 29.54 FY05 59 265.27 FY06 33 128.28 FY07 0.00 FY08 0.00

Total: 124 552.83 Supervision/ICR

FY99 0.00 FY00 0.00 FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 0.00 FY06 4 41.81 FY07 15 103.71 FY08 21 145.65 FY09 12 0.00

Total: 52 291.17

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Annex 5. Beneficiary Survey Results 1. The National Opinion Survey, the Encuesta de Percepción de Planes Sociales (EPPS), was conducted between mid-June and mid-August, 2007.22 It was undertaken by a joint team of Equipos MORI Argentina and the Centros de Estudios Distributivos y Laborales de la Universidad Nacional de La Plata (CEDLAS). The survey included a sample of 2,500 households and was designed to be representative at the national and regional levels. Either the head of the household or spouse was interviewed, depending on their availability.

2. The survey included a module of questions that was applied to a sub-sample of 600 potential beneficiaries of social programs, to deepen the analysis among the target population. Selection of interviewees into the over-sample was based on self-reported income. The survey questionnaire included a sub-module for the over-sample which included specific questions relevant to the beneficiary population on adequacy of benefit amounts, contraprestaciones, the duration of programs, and views regarding training and labor market insertion as possible components of program design.

Familiarity and Experience with Programs

3. Jefes is widely known among the population, while newer programs are less recognized. When asked to name social programs in the EPPS, 93 percent of those interviewed mentioned Jefes (Figure A5.1).23 A large share of the population (61 percent) also mentioned Trabajar, the predecessor to Jefes which was discontinued in 2001, suggesting recognition of the plans, but less familiarity with recent developments. These findings illustrate the widespread familiarity with the emergency programs – especially Jefes– because of the high level of coverage within the population, as well as the significant media attention to the program.

4. On the other hand, newer programs, particularly Seguro de Capacitación y Empleo and Familias, were much less recognized. Only two percent of interviewees mentioned Seguro spontaneously. When prompted with a list of programs and asked which were familiar, the number of respondents indicating familiarity increased to 42 percent. Similarly with Familias, only 4 percent mentioned the program unprompted, while 55 percent recognized it from a list. These findings are not surprising, given that the programs are not yet fully implemented across the country.

22 The findings from the EPPS are synthesized in Cruces, Rovner and Schijman, 2008.

23 Spontaneous response plus guided (interviewee was asked to select programs from a list); 62 percent mentioned Jefes spontaneously.

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Figure A5.1. Familiarity with Social Programs (spontaneous and guided responses)

Source: Calculations based on EPPS (CEDLAS-MORI-BM, 2007). Base: total sample.

5. Beyond basic name recognition, the survey also asked respondents about their knowledge of the eligibility criteria for participation in the programs. The findings indicated a relatively broad knowledge of basic characteristics of eligibility, 54 percent of interviewees recognized that unemployment was a criteria for receiving the program, 40 percent identified poverty and 36 percent identified having children in the household as necessary. In addition to the eligibility criteria, 87 percent recognized that contraprestaciones were a requirement for receiving benefits.

6. A significant share of the population has had direct experience with social programs, again reflecting the high coverage of Jefes. In the EPPS, 20 percent of heads of households interviewed indicated that either they themselves, or a household member, had received a benefit during the last five years (2002-2007). This level of coverage is reflective of the peak level of coverage reached by Jefes in 2003. Of this 20 percent, 82 percent reported a monthly income below AR$1,249 – the level of median total family income at the time of the survey. On the other hand, 12 percent of respondents indicated that during the last five years, a family member had applied for a program but did not receive a benefit.

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Figure A5.2. Interaction with Social Programs (2002-07)


Views about Programs 7. The survey indicated that the population generally supports the social programs, but also signaled concerns about their implementation. When asked whether to “leave the programs as they are” or “eliminate them without replacing them,” half of respondents opted to leave the programs as they are, and 28 percent would opt to eliminate them. The remainder chose neither, or did not respond. This suggests that there is a large share of the population that finds value in the programs, despite concerns about implementation (discussed further below), while at the same time, a significant group feels strongly enough to suggest that the programs should be eliminated entirely.

8. As would be expected, beneficiaries were more enthusiastic about keeping the programs unchanged (71 percent), while the share who would opt to eliminate them was substantially higher (44 percent) among those who did not receive benefits. Approval of the programs appears to decline with age. Among those between 18 and 35 years old, 19 percent would eliminate programs, while this increased to 27 percent for those between 36 and 55 years old, and 34 percent for respondents older than 55.

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Figure A5.3. Overall Views on Existing Social Programs (leave or replace them)

Doesn’t know, 6%

None, 16%Eliminate the plans and don’t replace

them, 28%

Leave the plans as they are

now, 50%


9. The survey illustrated an overall view that the social programs play an important policy role and have an effect on economic and social issues in the country. A majority (61 percent) agreed that “programs are always needed because there are people who need them,” while 28 percent agreed that “programs are only needed during economic crises.” Support for permanent programs, rather than temporary during crises only was strongest among people in the poorest regions, young people, and those with beneficiaries living in the household. Similarly, 41 percent believe that poverty would be worse in Argentina without the programs, 38 percent think that unemployment would be worse, and 37 percent think that inequality would be negatively affected.24

10. The survey results suggest deep concerns about the design and implementation of the programs. A large majority (58 percent) of respondents either disagreed, or disagreed strongly that the programs should continue as they are, while only 21 percent agreed that the programs are fine without changes. The main concerns with the programs indicated in the survey were issues with access, low benefit levels, and lack of information about eligibility.

24 Poverty, unemployment and inequality were separate (not mutually exclusive) choices in the question.

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Figure A5.4. General Evaluation of Programs (agreement with the statement: “the programs work well and should be left as they are”)


Perceptions of Beneficiaries 11. Within the EPPS sample 17 percent of respondents, or their spouses, reported receiving some type of a social benefit between 2002 and 2007. Programs received included: a mix of national programs including Jefes (60 percent), Familias (24 percent), and Seguro de Capacitación y Empleo, as well as one of a range of provincial level programs.25

12. In terms of the overall evaluation of the programs, 35 percent of beneficiaries reported that they believed that their quality of life had improved from participating in the program, and 26 percent maintained that their potential to get a job had improved. The majority reported that both their quality of life and employment prospects had stayed the same regardless of receiving the benefit (57 and 66 percent respectively). These results may not necessarily represent a negative assessment, if interviewees did not include the counterfactual in their assessment. In other words, in the absence of the benefit their quality of life and employment prospects might have worsened further.

13. Of those respondents (or their spouses) who reported having received a benefit during the reference period, 66 percent were continuing to receive benefits at the time of the survey. For those who were no longer receiving benefits, the main reason cited for going off benefits was getting a job (36 percent) (Figure A5.5). Other reasons for discontinuing participation were that the program ended (8 percent); retirement (7 percent) or failure to meet the eligibility criteria of the program (6 percent).

14. The survey also reflected the government’s strategy of shifting Jefes beneficiaries to the new programs. One-quarter of the interviewees who reported receiving a benefit

25 Provincial programs mentioned included: Plan Bonarense, Fondo de Desempleo, Plan Vida, Vale lo Nuestro, and Plan Primer Paso y Plan Medicamentos.

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noted that they had transferred from Jefes to another program. For the majority of cases, this transition was one year or less from the time of the survey. The main reason cited for switching programs was that the new program offered a higher benefit level.

Figure A5.5. Reasons for Exiting Benefit Programs

Source: Calculations based on EPPS (CEDLAS-MORI-BM, 2007). Base: Respondents who had received (or whose spouse received) a benefit in the past.

Program Design

15. There is nearly unanimous consensus in Argentina for the need for contraprestaciones, or some form of conditionality to be included in the design of social programs. Contraprestaciones refer to the requirement for participation in work activities (including community services or attendance at education or training courses) for a specific number of hours a week. Popular awareness is high because of the incorporation of contraprestaciones into the Jefes program. Proponents of all three visions in the consultations expressed unanimous support for contraprestaciones. Stakeholders indicated that a requirement to work should be obligatory because of the persistence of poverty and unemployment, and as a means to discourage welfare dependency (asistencialismo).

16. Support for conditionalities attached to benefit receipt was nearly the same within the EPPS survey. Ninety three percent of interviewees agreed that beneficiaries needed to “do something in exchange for receiving benefits.” When asked about preferences regarding the type of conditionality, the majority (58 percent) supported a work requirement, while others supported participation in training courses (42 percent), a

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requirement that beneficiaries be actively seeking work (36 percent), or participation in a productive community project (20 percent).

17. Among beneficiaries surveyed in the EPPS, an overwhelming share (89 percent) reported that they had actually participated in some form of contraprestación. The majority participated in a work activity (55 percent), while the second most common activity was compliance with school attendance (27 percent) and health check-ups for children (26 percent).

18. The general consensus in Argentina is that the current income support programs are important. Less than 30 percent of the population would eliminate income support programs if they could not be improved. A majority (61 percent) agreed that “programs are always needed because there are people who need them,” whereas 28 percent agreed that “programs are only needed during economic crises.” Similarly, 41 percent believe that poverty would be worse in Argentina without the programs, 38 percent think that unemployment would be worse, and 37 percent think that inequality would be negatively affected.

19. The surveys showed general agreement among stakeholders that the emergency programs (that is, Jefes) were appropriate for the post crisis period and had served their purpose. However, there was also agreement on the need for a longer-term vision and strategy. Respondents did not express any particular disagreement with the transition strategy to the new Seguro and Familias programs but showed concerns about whether the programs would be enough to satisfy the existing demand for social policies.

20. A major theme emerged surrounding the link between income support programs and the labor market. While there is debate about the level to which social programs should be linked to the labor market, both the consultations and the survey sent strong messages, that employment should be an objective of social policy, and that labor market incentives and opportunities should be considered in policy design. Related to this sentiment, there was nearly universal support (93 percent in the EPPS) for contraprestaciones, or for some form of conditionality to be included in the design of social programs.

21. The potential beneficiary population expressed a strong preference for programs with tangible labor market outcomes, similar to Seguro. Beneficiaries prefer programs that would provide training, employment services, and ideally a guaranteed job upon completion, even if it would mean a lower benefit amount or duration of eligibility. This finding indicates support for the type of program the government is currently introducing: the Seguro de Capacitación y Empleo. Also, it suggests that other programs, such as Familias, could be adapted to incorporate more of a labor market orientation, for example, through the introduction of training opportunities or work requirements.

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Annex 6. Stakeholder Workshop Report and Results Not applicable.

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Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR

Hacia fines de 2001, inicio de 2002, Argentina entró en una aguda crisis económica. El impacto de la crisis de 2001/2002 potenció los problemas laborales y sociales de la Argentina. El desempleo abierto alcanzó su expresión más dramática en mayo del 2002, con una tasa del 21,5 %, fruto de la inactividad de la economía. En lo económico, las manifestaciones de la crisis han sido devastadoras, provocando finalmente la caída de la convertibilidad de la moneda. La profunda crisis económica sufrida en 2001-2002, sumada al proceso recesivo de los años anteriores, produjo una contracción del PIB del 20% acumulativo, en un período de cuatro años. Sólo en 2002 la caída fue del 11%.

Esta situación provocó que en 2002 más de la mitad de la población (54,3%) se encontraba en situación de pobreza, mientras que el 24.7% cayó en indigencia. Todos los indicadores económicos empeoraron afectando negativamente a vastos sectores de la población. Argentina no contaba entonces con una red de protección social, apta para atemperar este impacto, ya que los Programas de empleo directo presentaban una cobertura poco significativa en función de la demanda existente.

El 3 de abril de 2002, se dicte el Decreto 565 que modifica el Programa Jefes de Hogar instituyendo el Derecho Familiar de Inclusión Social. De este modo se instala la universalización del Plan Jefes de Hogar, que asegura un ingreso mínimo mensual a los hogares argentinos.

El Programa tuvo por objetivo transferir una ayuda económica de $150 mensuales ( equivalía en 2002 al 75% del salario mínimo vital y móvil), a todas aquellas personas que cumplieran con los siguientes requisitos: a) ser jefas/as de hogar desocupados; b) pertenecer a un hogar donde hubiera hijos de hasta dieciocho años de edad, o discapacitados de cualquier edad, o en los que la jefa o la cónyuge, concubina o cohabitante del jefe de hogar, se hallare en estado de gravidez, y c) residir en forma permanente en el país. También establecía obligaciones a los beneficiarios, como condición para la percepción de la ayuda económica. Estas son:

a) Asegurar la concurrencia escolar y control de salud de los hijos a cargo del jefe/a.

b) Participar en actividades de capacitación o en la educación formal, con el objeto de coadyuvar a la reinserción laboral; o

c) Incorporarse en proyectos productivos o en servicios comunitarios de impacto ponderable en materia ocupacional.

El Programa Jefes de Hogar cumplió un importante rol en el esquema de Protección Social, atendiendo simultáneamente dos problemas que afectaban a la población: el desempleo, que generaba situaciones de pobreza por falta de ingresos, así como otras situaciones de pobreza más estructural. Dicho Programa contó con un financiamiento concurrente del Tesoro Nacional y de un PRÉSTAMO BIRF Nº 7157- AR, en su primer tramo, y un segundo Préstamo Proyecto de Transición del Programa Jefes de Hogar (PRÉSTAMO BIRF Nº 7369-AR) para encarar el proceso de transición una vez superada la crisis más aguda a los efectos apoyar la salida de la emergencia y encarar políticas

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públicas más adecuadas para atender a la población en situación de vulnerabilidad social y laboral.

El Gobierno Argentino, encaró una estrategia de apoyo a los hogares pobres cuyos jefes se encontraban en situación de desempleo. Dicha estrategia fue adoptando distintos perfiles de política a los efectos de acompañar, los cambios en el mercado de trabajo, así como en relación a las necesidades de la población. Esto permitió la aplicación gradual de un esquema de trasformación de programa de atención a la crisis en políticas sociales y de empleo.

El PJH tuvo su mayor expresión en mayo de 2003 (mes en el cual se pagaron la mayor cantidad de prestaciones), con casi dos millones de personas beneficiarias (1.990.735), para llegar al mes de febrero de 2010 con 77.041 beneficiarios/as, es decir un 3.9% del total de las personas incorporadas inicialmente.

En este sentido, la Secretaría de Empleo considera oportuno, al elaborar un informe país, como contribución al ICR del PRÉSTAMO BIRF Nº 7369-AR, asumir al PJH en su integralidad, analizándolo como política de contención en contexto de crisis, y establecer algunas reflexiones sobre las lecciones aprendidas, más allá de los tramos de financiamiento que implicaron los dos préstamos consecutivos, destacando que ambos cumplieron los objetivos propuestos, conforme se estableció en el Acuerdo de Préstamo y en el PAD, y apoyaron los lineamientos de política que estableció el Gobierno Argentino.

En este sentido los Objetivos de Desarrollo del Proyecto eran ayudar al Gobierno : (i) a reducir la pobreza apoyando el componente de contraprestación laboral del Programa Jefes de Hogar, incluyendo las continuas mejoras en la gestión y gobernabilidad del Programa; y (ii) fomentar actividades destinadas a colocar a más beneficiarios de este Programa en empleos de tiempo completo, permitiéndoles así salir del Programa. Las actividades para promover la participación de los beneficiarios en el mercado laboral incluirían: (i) subproyectos con contraprestación laboral destinados especialmente a fomentar la empleabilidad, ofreciendo al mismo tiempo acciones de capacitación para la mejora de las competencias laborales, y acciones de apoyo a la inserción laboral; (ii) apoyo a micro-proyectos productivos; y (iii) establecimiento y apoyo a las oficinas municipales de servicios de empleo.

Algunos aspectos relevantes de la estrategia país en la construcción de un nuevo esquema de protección social que permitió la salida del PJH.

1. En Mayo de 2003, el Gobierno Argentino comprometió el desarrollo de políticas económicas con centralidad en el empleo. Las mismas permitieron, progresivamente, la reconstrucción del mercado interno, la recomposición del aparato productivo, entendiendo que la gobernabilidad democrática sólo era posible con inclusión social. La fragmentación social que vivía la Argentina era muy sería, y la política de superación de estas inequidades debía tener su eje en el trabajo decente.

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2. Cabe señalar que a partir del año 2004 (según datos de EPH) se registró un significativo descenso de las tasas de desempleo, lo que permitió que de manera progresiva un importante número de personas beneficiaras del PJH se incorporaran al empleo formal, o se sumaran a otras estrategias vinculadas al autoempleo, o a procesos de orientación laboral y apoyo a la búsqueda de empleo. Desde julio de 2003, sobre casi 2 millones de personas, aproximadamente 639.000 personas se incorporaron al mercado de trabajo en un empleo formal, constituyendo casi un tercio de los beneficiarios del Programa.

El Decreto 1506/04, constituyó el primer paso para encarar esta nueva orientación de la política. Se estableció una nueva perspectiva para reorientar la atención de las personas incluidas en el Programa Jefes de Hogar, promoviendo políticas específicas para atener dos problemas con características peculiares: (a) la falta de empleo y (b) la carencia de ingresos de los hogares pobres. El propósito de estos cambios es instalar progresivamente de dos lógicas complementarias, pero diferenciadas de atención a las problemáticas de la pobreza, la exclusión y el desempleo, desvinculando políticas de ingreso o renta mínima de las políticas específicas de promoción del empleo:

• Unas, centradas en las familias más pobres con el objeto de mejorar sus condiciones de vida, En tal sentido se trata de desarrollar una estrategia de transferencia de ingresos a los hogares pobres, cuyo eje central sea el desarrollo humano, en la órbita del Ministerio de Desarrollo Social.(Programa Familias para la Inclusión Social.

• Otras, destinadas a las personas con problemas de empleo y empleabilidad, centradas en medidas activas de promoción a la inserción laboral, En este segundo conjunto de políticas se inscriben las acciones y programas de la Secretaría de Empleo, que fueron básicamente apoyadas a través del Préstamo BIRF 7369-AR

3. Uno de los aportes más significativos del Proyecto en el apoyo a la estrategia del Gobierno fue la contribución con el fortalecimiento y ampliación de una red municipal de servicios de empleo, con capacidad de atender a los/as personas desocupadas que desde el PJH optaron por incorporase al Seguro de Capacitación y Empleo y recibir el apoyo para mejorar su empleabilidad y adquirir herramientas aptas para la búsqueda de empleo. Las Oficinas de Empleo municipales constituyen una institucionalidad clave para la implementación de las políticas activas de empleo a nivel territorial, comprometiendo recursos locales para la su promoción y las capacidades instaladas para brindar opciones referidas a la mejora de la empleabilidad, de los trabajadores/as desocupadas más vulnerables por su bajo nivel de calificación laboral; contribuyendo asimismo a fortalecer la oferta educativa formal y las instituciones de formación profesional sectoriales.

Lecciones Aprendidas:

6. Frente a las crisis la necesidad de una respuesta rápida y masiva que sirviera para la atención a las personas vulneradas por las contingencias sociales y económicas.

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7. Diseñar e implementar esta estrategia de política social de gran magnitud, cobertura territorial y con celeridad, requiere de la existencia previa de condiciones y capacidades institucionales mínimas para su puesta en marcha. Pero al mismo tiempo es necesario mantener un esquema de monitoreo y evaluación de resultados que permita mejorar de manera sistemática y permanente aspectos vinculados a su gobernabilidad y mejora continua.

8. La incorporación de nuevos actores territoriales en la gestión de las políticas sociales aseguró la proximidad con las personas en situación de vulnerabilidad, así como de aquellas que encontrándose desempleadas eran buscadoras de oportunidades laborales. Ello permite:

a. El fortalecimiento y creación de una institucionalidad territorial con capacidad creciente para desarrollar estrategias de atención a personas con problemas de empleo: sistema de educación de jóvenes y adultos, oficinas de empleo, instituciones de formación profesional.

b. A pesar de los esfuerzos y la inversión realizada en materia de fortalecimiento, cabe señalar que los procesos de construcción o reconstrucción de los ámbitos institucionales no siempre acompañaron las necesidades de los programas y de las políticas. Esta situación pudo observarse tanto en materia de oferta educativa formal, instituciones de formación profesional, como de las propias oficinas de empleo municipales. Se expresó así una heterogeneidad en las capacidades instaladas a nivel local cuya consecuencia fue la diversa calidad y cobertura de los servicios prestados.

9. La descentralización de la gestión permitió una mayor proximidad a las situaciones heterogéneas de los/as trabajadores/as pobres y desocupadas, así como resolver los problemas y potenciar las oportunidades. Constituyó un elemento potente para diseñar el esquema de salida del Programa.

10. El desarrollo de un esquema de salida debe ser progresivo, asegurando que la población no quede fuera de la protección social, dado que la recuperación de la población más vulnerable es siempre más lenta que la recuperación de muchos de los indicadores económicos.

11. Este esquema de salida debe basarse en la opción voluntaria de los beneficiarios para encarar posibles trayectorias de desarrollo personal y de inclusión social. La necesidad de contar con ámbitos institucionales que tengan proximidad con las

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personas beneficiarias para orientar tanto en los aspectos vinculados al desarrollo humano (Centros de Atención Local- Centros de Integración Comunitarios), como a los proceso de inserción laboral (Oficinas de Empleo Municipal). Estas últimas fortalecidas desde el Proyecto para el brindar apoyo a las personas en los procesos de orientación laboral, la búsqueda de empleo e inserción en empleos formales o autoempleo. Esto supone riesgos referidos a contar con los recursos humanos, institucionales y financieros necesarios para dar cumplimiento a estos objetivos.

Conclusiones:

Los objetivos del Programa Jefes de Hogar resultaron adecuados para atender a los hogares afectados por la pobreza y desempleo, durante la crisis del 2002. Su desempeño fue altamente satisfactorio en materia de focalización, alcanzando a los hogares más pobres y desempeñando un papel decisivo para la primera fase de de recuperación económica.

La mejora de la situación económica y social general puso al Gobierno en un nuevo desafío, en materia de política social, asumiendo la necesidad de encarar un proceso de reorientación del PJH, hacia nuevas estrategias de política, estableciendo alternativas diferentes para las personas beneficiarias conforme sus necesidades, capacidades y oportunidades, con eje central en el empleo decente.

El Seguro de Capacitación y Empleo, oportunamente, el Plan Familias por la Inclusión Social y recientemente la Asignación Universal por Hijo, conformaron una estrategia superadora del Programa Jefes de Hogar en materia de protección social, atendiendo a aquellas personas que, una vez superada la crisis, no lograron insertarse en empleos de calidad.

Buenos Aires, 26 de mayo de 2010.

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Annex 8. Selected Findings from Survey of Employment Offices The survey was carried out between December 2009 and January 2010. The objective was to obtain information on the operation and capabilities of the Employment Offices, the obstacles they faced, as well as good practices and initiatives. The survey gathered information in six main areas: human resources and infrastructure; communications and institutional relations; internal management; knowledge of labor market and the programs in the Ministry of Labor; services for job seekers; and relations with employers. The survey was self-administered on-line and completed by the coordinator of the employment office. The sample included 232 employment offices (about 80 percent of the offices existing at the time) from around the country and was restricted to those offices who had been in place for a minimum period of time. Selected findings are summarized below. Organization and Basic Characteristics The individuals participating in the survey had a reasonable amount of experience in the employment offices. 85 percent of the main respondents to the survey had been working in the office for at least a year and 58 percent had been working for at least 2 years. About 80 percent had been in their current job for at least one year and 50 percent for at least 2 years. Most respondents were coordinators, with the majority having a secondary responsibility of working with job seekers. 60 percent of the staff was split evenly between administrative personnel and interviewers. Nearly 70 percent of the staff are women. For about 60 percent of the offices the average experience of the staff was more than 1 year. About a third of the staff had received some form of training in the last 6 months. On average the municipality was financing nearly two-thirds of the staff, principally administrative staff. A substantial share of staff were assigned to one main function, suggesting a degree of specialization in different roles, although there were no cases of personnel with 100 percent of their time devoted to only one role. In addition to the provision of employment services, the majority of offices (90 percent) also had responsibility for the management/administration of social programs, reflecting the influence of the Heads of Household Program and illustrating the challenge of moving to an employment focus. Nearly 40 percent had yet another additional responsibility. Use of Office Tools: Computer Platform, Client Registry, Guide to Resources, and Knowledge of the Local Labor Market 90% of the offices have a guide to resources for making client referrals, but in only half is the guide computerized. All of the guides contain education and training institutions and/or social and health services, mostly public. The guides are less likely to have information on institutions related to the private sector and employers, such as business groups and professional associations. In about 70 of the offices, the guides include childcare facilities. Only 20 percent of the offices update the guide on a monthly basis. Nearly half of the offices do not update the guide on a regular basis. About 80 percent of the offices try to include new agencies in the guide.

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About 75 percent of the offices utilize the national computerized information platform to register all clients who utilize services, and about 70 percent use it for anyone who comes to the office. The platform is used most frequently (90 percent) to record labor histories and to management employment programs, such as the Training and Employment Insurance and Youth Employment Program (70 percent). It is used less often to register employers (34 percent). Between 30-40 percent of offices rarely or never use the platform to register training courses or to make training referrals. About 70 percent of the offices responded that the platform was very useful for registering labor histories and for about half, it was useful for general management of services. On the other hand, nearly 60 percent of the offices reported either that the platform was not a useful instrument or that they did not utilize it in their work with employers. The principal problems with the platform are: connectivity (reported by 80 percent of the offices), difficulties in accessing the information (42 percent) and lack of sufficient training (39 percent). Nearly half of the offices have a computerized registry to record referrals to labor intermediation activities, but only 40 percent had computerized information on the number of individuals interviewed or contracted by employers. Only 14 percent of offices lack a registry of job referrals and 30 percent do not keep track of the results of referrals. About 40 percent have a paper registry of job referrals, and 30 percent for jobseekers actually placed in jobs. Most offices (70 percent) state that they have sufficient information on their local labor market. Information is obtained mainly from conversations with employers (70 percent), municipal reports or their own analysis (57 percent). Only 10 offices said that they did not keep track of local labor market developments. The construction industry and domestic service are the two main sources of demand for workers in all municipalities. Competencies of the Employment Offices: Establishing Themselves in the Municipality, Planning, Priorities, and Feedback from Clients 80 percent of the offices have a publicity strategy. Most have monthly sessions to publicize their services with job-seekers (72 percent), 47 percent have monthly sessions outside of the office in another place in the municipality. Publicity with employers is less, with 40 percent doing monthly meetings in the office for employers. Only a third of offices do something on a monthly basis in the offices of businesses. Links with business associations appear to be underutilized - only 17 percent do monthly meetings with those institutions. Monthly meetings to publicize the office are organized by only 20-30 percent of offices at schools, training institutions, etc. About the same share carries out sessions at schools every quarter. The data show that about a third of offices do not plan and do not carry out regularly meetings with employers, suggesting the need to set guidelines for publicity with businesses and in locations outside of the office. The most common form of publicity is the distribution of printed materials (two-thirds of offices), followed by publicity in local communication channels and talks in the office for job-seekers (both about 60 percent). Nearly half have rarely or never organized a talk in

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the office for employers. 40 percent make visits to other institutions, and 45 percent use e-mail. About 100 offices responded that they had something interesting to share on their diffusion strategy which was innovative or that had had good results. When asked about the importance of the office to the municipality, the responses were about evenly split between those who give it a high priority and those who give it a medium priority (i.e., the office is just another municipal service). Only about 10 percent say that the municipality does not give any importance to the employment office. There were several questions which aimed to determine the extent to which the employment offices were planning their services. When asked if they set targets to be reached over a specific period of time, most often (70 percent of offices) mentioned were publicity activities, workshops, and transfers to the Insurance. The next most frequently mentioned (by around 60 percent) were targets for visits to employers and businesses; about half of the offices set targets for the number of people served and interviews for job-seekers. Only about 40 percent of offices set targets for the number of vacancies the office should receive. Of concern is the fact that about half of the employment offices do not plan their activities in important areas such as number of people to be served, number of interviews of job-seekers, and the number of vacancies available in the office. There seems to be a particular issue with vacancies. Related to planning is the extent to which the employment offices are differentiating their services and plans, according to the characteristics of the clients. Most offices make some distinctions, the most common being which program the client is participating in, followed by sex and age, but about a third of offices don’t make any distinction. What are the main functions that the office staff are spending their time on day-to-day? The activities with the highest ranking by most offices (90 percent) are helping people get jobs and improve their employability. Slightly fewer (84 percent) offices respond that they are spending their time helping people get better training. About 75 percent of the offices think their activities contribute to the social and economic development of the municipality. About two-thirds mention helping employers get workers and administering employment plans. The only functions which most offices identify as not very important are to carry out social assistance activities (about 50 percent rank as low) , to administer employment plans (about a third rank as low), and to help employers get workers. For the latter, 30 percent rank it as low in importance. Overall, the order of importance of the activities most often identified by the offices is as follows: work/employability, training, municipal development, and employers/administer plans.

To what extent do they get feedback from their clients? Among job seekers the most common response was frequently (40 percent) and sometimes (40 percent). A lower share report similar responses for employers, respectively 37 percent and 31 percent. Nearly a third of offices do not try to measure client satisfaction among employers. Overwhelmingly (90 percent of offices) this feedback is solicited informally (90 percent) through conversations and comments. 13 offices respond that they use a survey. Most offices (80 percent) do not have a complaints system for the users of their services.

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Characteristics of the Services Provided There is little subcontracting of services in the employment offices. Nearly half as many women as men visit the employment offices. The service that about three-fourths of offices say is highly utilized by clients is the registration of their labor force history. About 40% of offices identify other services as highly utilized by clients: the provision of employment advice, personalized counseling sessions related to the youth employment program, and training and education referrals. The next most highly utilized (marked by only 30% of offices) are help on looking for work, getting information on vacancies, and referrals to other social or employment programs. Services that are mentioned mainly in the category of used commonly are: help for job search, labor orientation, information on vacancies, and referrals to other social or employment programs. The employment offices report that there is little use of referrals to social services, preparing career ladders, training plans, and other services. It is worrisome that there is relatively little utilization of some services such as labor orientation, help in job search, and information on vacancies because these relate to labor intermediation which should be a central activity or the office. It suggests that the employment services need to develop beyond just taking labor force histories, towards more counseling and higher value services. On the positive side, the employment offices seem to be serving as a gateway to education and training services. Labor force histories are applied widely, to nearly every client. Nearly 90 percent of employment offices say that they include the labor force history in the interview. Slightly less than 60 percent of offices report that they cover training and education services. Less than half of offices include a discussion of workshops and the employment and social programs available in the interviews with jobseekers. Only about 30 percent of offices cover information on vacancies and the local labor market in all interviews. It is worrisome that about 30 percent of offices say that they hardly ever include information on local labor market or vacancies in the interviews. The responses suggest that up to now offices are not personalizing their strategy with jobseekers and instead tend to apply an “education/training first strategy” for most clients. Also of concern is the relative lack of discussion of topics related to labor intermediation. Regarding referrals, not surprisingly those related to education and training are most common. About 70 percent of offices report that they make these referrals frequently. Taking into account their recent establishment, the extent to which referrals to social services are being made is good. About a quarter of offices say frequently and 40 percent of office report that they make these referrals “sometimes”. The average number of referrals per office during the 4 week reference period was 65 for education, 74 for training, 12 for self-employment services and 12 to other social services. When making training referrals, the main factors that the staff seems to be taking into account are course availability, the interests and time limitations of the person, the location of the course, and the past experience of the office with the course. To a lesser but still significant extent (mentioned by about half of the offices) the type of training demanded by employers and whether or not the course offers a certification are taken into account. Where and how often do the offices learn about the supply of training courses? The main

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sources are the municipality and the programs themselves. About 40 percent of offices say that they get this information on a weekly basis. Information is received to a lesser extent form the Ministry of Labor provincial offices (30 percent) and through the information platform (only 20 percent). There seem to be some differences between offices on how often training information is received as most responses are concentrated at the two extremes (weekly vs. occasionally/without any specific time table). An area for improvement is the provision of information through the platform as half of the offices say that they never get information through this means. The quality of training offered through the municipality may be lower quality, so it is of some concern that this is one of the main sources of information. One of the services of the employment offices – and a focus in the Project – was the organization of workshops, particularly for beneficiaries of the Heads of Household and the Training and Employment Insurance Programs. Progress in this area has been slower than expected. Over the 3 month reference period, only 40 percent of offices responded that they organized job search and labor orientation courses at least monthly. Not surprisingly and appropriately, the courses for individuals interested in self-employment are organized less frequently. It is of concern that there are many employment offices which organize workshops only occasionally or without any particular timing. In fact there are about 50 offices who have never organized these workshops. What are the factors which explain the shortfall in the organization of workshops? Several reasons are given. Slightly over 20 percent of offices say that don’t have sufficient training and 11 percent say that they can’t find a qualified trainer. In other words, it could be said that for 30 percent of offices there is a skills/supply problem. Slightly less than 20 percent of offices say that it is because there is not sufficient demand. What services are of most interest to job seekers? The services of most interest to job seekers are information on vacancies and support in looking for work, showing that there is a disconnect between what services the employment offices are focusing on and what services clients want. Interest in referrals for education and training are also pretty high. Interest in referrals to other social services is ranked as medium by most offices. For most public employment services, labor intermediation is the core service. In this area, the responses show that the employment offices in Argentina have some way to go. First, only 2/3 of the offices responded to the questions in this section of the survey on the number of interviews and job placements. Presumably the offices who did not respond had nothing to report. Among offices which responded, on average, 35 individuals per week were referred to job interviews and 15 were placed. The average number of job vacancies received by those offices responding was 17, of which 13 were covered. The most common way that vacancies are received during the 4 week reference period by the offices is by telephone (mentioned by two/thirds of the offices). 60 percent of offices say that employers come to the office to register vacancies. About half of the offices say that they get vacancies through visits to employers and slightly less than 50 percent through e-mail. A third of the offices say that they can fill the vacancy more than 75 percent of the time and over half say 70 percent of the time, with only about 22 percent (32 offices) saying that they can meet the demand less than 25 percent of the time. Most offices (75

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percent) inform the job-seekers of employment opportunities by telephone. 50 percent of the respondents say they use notices in the office. Relations with Others

Reflecting the importance of the technical assistance being provided by the Ministry of Labor, the employment offices have contact most frequently with the provincial offices of the Ministry. About a third of the offices say that they have weekly contact with other offices in the municipality. Most offices also report contacts with private employment offices. Based on the responses, the resource guides of the offices are fairly comprehensive. Areas for improvement include the inclusion of more business associations and child care services. Nearly a third of offices say that there resource guide does not include the latter. The agreements between the employment office and other agencies are usually informal. That being said, nearly 50 offices have a formal agreement with training institutions and 45 have formal agreements with education centers.

Establishing close relations with local employers is key for effective public employment services. Nearly all offices report that they have an employer register. About half of the offices use their own internal database (generally non-computerized), and a third use the platform. Among those offices who responded (70 percent) there are 200 employers registered in each. How frequently and how do the offices communicate with employers? Slightly more than a fifth of the offices make at least weekly visits to employers, 26 percent of the offices send e-mails, and 31 percent call. It is worrisome that 22 percent of offices only visit employers every month or quarter. A substantial share of offices are not using some communication channels: 44 percent (60 offices) have not organized group meetings for employers in the office and 33 percent (43) have not organized group meetings with employer associations during the last 4 weeks. It is worrisome that only 70 percent of offices are responding to the question. During the 4 week reference period, the average number of employers contacted by each office is only 18. The average number of employer interviews during the same period as 12 and for only 7 employers on average did the office carryout labor intermediation services. On the positive side, about half of the offices think that their relations with companies have improved over the last year, while the rest report no change. Areas for Improvements The survey respondents identified several areas in which they wanted more training. The most common responses (60 percent of offices) for the highest priority were the following areas: employer relations, youth, labor market analysis, and knowledge about the programs of the Ministry of Labor. The areas ranked next in importance were labor orientation, support for job search, self-employment, labor intermediation, use of the platform, following up clients, and working with other institutions. Of medium priority are career ladders and how to improve referrals. The offices were also asked to identify what was most important in order to improve their services for jobseekers and employers. Ranked the highest were training on labor intermediation and learning about the good

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practices of other offices. Other areas ranked highly by 100 or more offices were implementation of agreements on referrals, knowledge of the local labor market, strategies for internal planning, and making contacts with employers.

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Annex 9. List of Supporting Documents Transición del Programa Jefes de Hogar Desocupados: Sub componente de Obra Pública Local con Capacitación “Trabajadores Constructores”: Revisión del desempeño en la etapa final del Crédito. María Claudia Vásquez, Consultant. September 2009 Transición del Programa Jefes de Hogar: Subcomponente de Proyectos Productivos.Documento de la revisión ex post de la ejecución de una muestra de proyectos. Cristina Cogliati, Consultant. November 2008 Argentina Income Support Policies toward the Bicentennial. World Bank Country Study. July 2006 / June 2008. Los Programas Sociales en Argentina hacia el Bicentenario. Visiones y perspectivas. Capitulo 2: Los programas sociales en la opinión pública. Resultados de la Encuesta de Percepción. Cruces y Rovner. November 2008. Preliminary Findings of Survey of Employment Offices, World Bank Staff, April 2010.

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