Evaluation of DOL"s [Department of Labor] labor market transition program in Poland, Hungary, and Bulgaria

Department of Labor"s (DOL) program to provide TA and training to support labor market transition in Eastern Europe, as mandated under the Support for Eastern European Democracy (SEED) Act of 1989. The evaluation covers 15 DOL projects implemented in Poland, Hungary, and Bulgaria for the period 1992-96. Despite the difficult operating environment in Eastern Europe, DOL quickly fulfilled its SEED mandate by efforts in public employment services, labor statistics, vocational training, labor-management relations training, and the establishment of social insurance systems. Initial project designs were drawn from a menu of standard employment services programs available in the United States, and adapted to local conditions, where possible. Many initial activities, especially in the employment services area, helped host governments develop a basis for mitigating high unemployment in the region. Once underway, most projects evolved logically despite a few false starts. Of 15 activities in the three countries, 12 began in 1992 and were continuing in 1996; of these, 1 will terminate this year and 2 have not yet begun. Of ongoing and long-term activities, 9 have accomplished most planned tasks and had beneficial effects, but the other three -- including the construction crafts training project in Poland, DOL"s largest and longest running SEED project -- are of uncertain sustainability without DOL funding. Of 12 long-term projects, 6 appeared to have a significant impact nationally, 2 are likely to have such impact, and 4 either have had or are destined to have moderate impact in limited geographic areas. Only a single component of a two-component project seems to have had only slight impact. Relationships between the DOL Bureau of International Labor Affairs and USAID appeared strained, mainly due to inadequate consultation, resulting in a lack of information about what, how, who, and for whom activities were to be implemented. Nonetheless, despite inconsistent management, monitoring, oversight, and reporting by USAID/W and USAID missions, extensive field interviews suggest that most DOL activities have had significant and often nationwide effects. DOL relations with host governments appears excellent, with national authorities giving high marks for DOL assistance, and DOL is viewed by other donors as a useful partner able to apply SEED resources in a timely manner and in ways that facilitate the issuance of World Bank loans and effectively leverage U.S. funds. Country-specific findings are as follows. (1) In Poland, the assignment of a highly qualified Polish-speaking field coordinator in Warsaw has had an excellent overall effect on DOL operations. However, activities are at different stages of implementation; some have achieved most of their objectives and are subject to close-out, while others are just getting underway. As already noted, the construction crafts training project has serious sustainability problems. (2) In Hungary, activities have had significant nationwide effects. Demonstrated models are being considered at the highest levels of government for inclusion in the national employment services package; decisions about government fiscal support appear to be possible within the next 2 years. However, these models will not realize their potential impact until they are effectively linked with local economic development/job creation initiatives. Problems include a lack of timely and accurate management information and a lack of DOL on-the-ground management for all programs. (3) In Bulgaria, The Employment Services/Dislocated Worker program has had significant effects and is being institutionalized at the national level. Again, the utility of the model could be enhanced if effectively linked with local economic development initiatives. The program targeting ethnic minorities has had mixed results. Literacy training has not resulted in major gains, probably due to a lack of political will. The Social Welfare-to-Employment program has been widely accepted and is likely to be applied even more widely. Support requirements in the area of social insurance reform are varied, extensive, and long-term. Coordination with other donors will prove critical. Private pension reform may become a priority for the mission. Lack of DOL management continuity for Bulgaria has resulted in confusion at the USAID mission as to the appropriate DOL contact.