Labor Market Policies

Essay by AlexsintraUniversity, Bachelor's April 2004

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In recent years, there has been a larger interest in social protection because of the increasing of financial, economic, environmental and social stability that has been happening too many of the poorest countries in the world. These difficulties often affect people through the labor market. Losing your job or assets providing subsistence are often the first shocks that leads to poverty. For this reason, labor markets are central mechanisms for rehabilitation programs when difficulties happen to reverse poverty. This understanding of the role of the labor market has encouraged multilateral and bilateral donors to include labor market policies and programs into social protection strategies. This is in recognition of the fact that labor markets have important implications in people's ability to deal with the difficulties.

The Global View

Labor market policies across the world have developed what its call the Japanese, the European and the American models. These models simply reflect different types of approaches to labor market policies.

The purpose of this is simply to highlight different approaches to (LMP) developed by industrialized countries at the end of the 20th century.

The Japanese model, until the early 90s, believed on the principle of full-employment intended mainly as a value to be preserved in a good society. Labor market differences were supposed as a major problem at the company level rather than in the open market. Enterprises had hierarchical structures and protected their workers, employees that remained faithful to the company.

The European model accepts market laws and the existence of unemployment as a necessary temporary condition to help and maximize the allocation of labor. Government intervention to support enterprises in difficulties is limited and the government job is mainly to support the unemployed with income maintenance and training plans to facilitate job seeking and position. The European model...