Labor Market Policy Responses in APEC Economies to the Worldwide Recession

From APEC HRDWG Wiki

This report (see full document), as part of a larger effort to measure the human resource impacts of the economic crisis, examines existing labor market programs in the 21 members of the Asia Pacific Economic Cooperation forum (APEC) and their responses to the current worldwide recession. It documents recent increases in unemployment, describes existing programs and outlines the new initiatives that were introduced to lessen the hardships experienced by the unemployed.

The report summarizes five passive labor market programs that provide income support to unemployed persons and their families. The performance of these programs is assessed and suggestions are made to broaden their scope and effectiveness.

Unemployment compensation programs are present in 13 APEC economies: nine operate unemployment insurance programs; four operate unemployment assistance programs (Australia, China, Hong Kong China and New Zealand). The analysis shows that APEC economies are
providing a very modest degree of wage loss protection to the unemployed. In response to the current recession, several APEC economies have enacted measures to broaden access to UC, lengthen potential benefit duration and increase the level of periodic benefit payments. Seven of the 13 APEC member-economies extended UC potential benefit duration and seven enlarged the scope of social assistance benefits.

Severance pay is present in nearly all APEC member-economies. The effectiveness of severance pay programs, however, is difficult to assess since relevant performance measures are not usually tracked in a systematic manner. Limited evidence shows that non-compliance is a common occurrence. Many who are eligible for severance pay do not receive it, and payments of severance frequently fell substantially below the legally entitled amounts. As presently structured, severance pay programs fall far short of their potential.

Approximately, half of APEC economies operate income-conditioned social assistance programs that make payments to families. While the unemployed are not a principal client group for social assistance, some families are eligible for benefits, especially in situations of long-term unemployment.