Jobs crisis to be confronted through tax reforms: IMF

Saturday, August 18, 2012 - Islamabad—The International Monetary Fund(IMF)has suggested that reforms of tax and expenditure policies offer great promise in helping countries confront the jobs crisis, including in the short term.

Faced with a jobs crisis, policymakers the world over are digging deep into their policy toolkits to generate more employment. A latest study by the IMF’s Fiscal Affairs Department argues that improving employment outcomes, over and above what could be achieved through policies aimed at supporting the demand for goods and services by consumers and investors requires actively supporting labor demand, strengthening incentives or reducing disincentives to work, and expanding training and job assistance, while preserving equity objectives.

It further said the economic and social consequences of job losses since the onset of the global crisis have been enormous. However, as bad as the crisis has been for jobs, unemployment was already elevated before the crisis in many advanced and emerging economies. This would suggest that labor market challenges will not go away as the global economy recovers, and that policy measures are needed both to address structural employment issues and to improve the employment outlook in the short term.—Online