Promoting Better Jobs through Integrated Labor and Skills Programs

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The government of Argentina is seeking to move from income support to employment programs and to build on evidence of what works to improve the income generation outcomes for vulnerable groups. In this context, the government is seeking to upgrade the effectiveness of programs to enhance employment prospects while supporting incomes during this transition. Faced with fiscal pressures, the government is seeking to do this while at the same time consolidating programs that focus on vulnerable groups who receive different support to develop their employability prospects. To this end, the government created a new program Volver al Trabajo to supersede the underperforming program Potenciar Trabajo and shift its management from the former Ministerio de Desarrollo Social to the Secretaria de Trabajo, Empleo y Seguridad Social in the Ministerio de Capital Humano. Potenciar Trabajo, which targeted at-risk and vulnerable individuals, had high numbers of ineligible claimants and low transition rates into formal employment, in addition to other concerns about program effectiveness . The urban poverty rate was 38.1 percent in the second semester 2024, down slightly from the rate of 40.6 percent at appraisal in the first semester of 2021. The unemployment and underemployment rates were 6.4 and 11.3 percent in the fourth quarter 2024, improvements from rates of 9.6 percent and 12.4 percent in the second quarter of 2021 but largely reflecting substantial flows into informal jobs. Young people and women are at higher risk of unemployment. For instance, in the fourth quarter of 2024 the gender gap in labor force participation was 17.7 percentage points (70.8percent for men versus 53.1 percent for women) and in unemployment was 0.8 percentage points (6.1 percent for men versus 6.9 percent for women). Both Volver a Trabajo and Fomentar aim to increase the formal employment opportunities of beneficiaries. Benefits seen from the ongoing impact evaluation of Fomentar would thus be expanded to Volver a Trabajo participants, to increase the probability of finding a formal job, including for women.The Program provides an integrated approach by consolidating a set of interventions in labor orientation, skills, internships, and support for finding employment. The target population is youth (men and women) from 18 to 24, women from 25 to 59, men from 45 to 64, among other vulnerable population. Implementation of the Program will be supported by the Employment Portal and will provide monetary benefits, in the form of stipends to certain priority groups, as well as non-monetary benefits, through the provision of different orientation and training services.The proposed Project would improve the quality of training and intermediation services and increase their coverage, linked to the objective of improving employment outcomes for these groups. In order to achieve this, the Project would support the following: i) expansion and strengthening of a labor competency-based training and orientation system; ii) promotion of labor market insertion through participation in active labor market activities; iii) strengthening the training and intermediation services (Employment Offices network and its coordination with the Employment Portal); and, (iv) Strengthening evaluation and Information systems, including a new qualification database to systematize the skills demanded by the labor market.