Wednesday, February 15, 2012

Job guarantee vs. income support program in Argentina

Pavlina R. Tcherneva argues that job guarantee program and income support plan should be combined to bring out an employer-of-last-resort programs in Argentina. Tcherneva argues: “An examination of the Argentine experience based on survey evidence and fieldwork reveals that poor women overwhelmingly want paid work opportunities, and that a policy such as the JG or the ELR cannot only guarantees full employment and macroeconomic stabilization, but it can also serve as an institutional vehicle that begins to transform some of the structures and norms that produce and reproduce gender disparities.”

Tcherneva evaluates the transformation of Argentina's Plan Jefes, a job guarantee program, to Plan Familias, an income support plan, and finds that it represents a step backward for women by removing a number of benefits and reinforcing gender stereotypes. Paid work matters to women, says Tcherneva, and public employment plays a special role in providing an opportunity to work outside the home, especially for the poorest and most vulnerable of this group.

Employer-of-last-resort (ELR) programs can enhance individual well-being, so the role of fiscal policy extends beyond the goals of full employment and economic stability. The best way to combine the goals of basic income and job guarantees is to design a universal program in the form of an ELR, supplemented by a universal child allowance and income support for the sick and the retired.

Major constraints faced by firms operating in Nepal

Though based on data from 2009, here is a snapshot of the major constraints faced by firms operating in Nepal. These problems are still persistent. See all of the survey results here and the Enterprise Survey report here.

A majority of the firms identified political instability as the main constraint to sound business environment in Nepal. For firms in South Asia and low income countries, political instability is not that big of a constraint as it is to Nepalese firms. However, electricity is a bigger constraint to firms in South Asia than it is for Nepal (as perceived by firms). Interestingly, for other constraints the proportion of surveyed Nepalese firms think the constraints faced by them are not as pressing as those thought by firms in the region.

Now, the surveyed firms think that power outages is eating up their strength and revenue. Manufacturing firms are losing 28.2 percent of annual sales due to power outages. For retail sector, it is 25.6 percent. A recent study by the central bank found that the average capacity utilization of industrial sector in the last fiscal year was 54 percent, thanks to persistent power outages and labor problems.