The World Bank and the provision of assistance to redundant workers : experience with enterprise restructuring and future directions

This paper summarizes the World Bank's experience in dealing with redundant (laid-off) workers. It identifies World Bank lending of 88 loans in 47 countries that have contained labor assistance to redundant workers related to enterprise restructuring or privatization since 1987. The paper classifies total World Bank lending into three broader categories that consist of different forms of labor and income support. The findings show that the total number of such loans more than doubled from 1994-98, and most of Bank's labor assistance goes towards long-term capacity building to develop the institutional framework needed to support redundant workers. Training, labor market mobility and severance pay programs were the three major labor programs used most frequently. The paper examines regional differences in total amount of labor assistance and regional difference in using the particular type of labor assistance. The findings also show how major type of labor assistance program changes over time, for example, severance pay program surpassed training program in 1997.