Report No: ACS8246 Republic of Kosovo Kosovo LFS Support Completion Memo December 3, 2013 ECSP3 EUROPE AND CENTRAL ASIA [Type text] Document of the World Bank Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. 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Background Since 2006, the World Bank has employed a programmatic and sub-regional approach to poverty- focused analytical and policy work in the Western Balkans (comprising Albania, Bosnia-Herzegovina, Kosovo, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia). The programmatic multi-year approach has ensured continuity in long term efforts such as statistical capacity building, while also permitting a great deal of flexibility to respond to emerging developments such as the financial crisis and recession. In addition to the Bank’s own resources, the Western Balkans Programmatic Poverty Assessment (PPA) was supported by a trust fund financed by the United Kingdom’s Department for International Development (DFID, also known as UKAid) from 2006 until 2011. In early 2011 the DFID trust fund closed and DFID withdrew its operational and financial support from all Western Balkans countries except for Kosovo, which continued receiving assistance because of its greater development needs. DFID continued its financial support to the Bank’s work on poverty in Kosovo through the Externally-Financed Output (EFO) instrument, which complemented the Western Balkans programmatic poverty assessment work that was funded out of the Bank budget. The Kosovo- specific financial support from DFID enabled the Western Balkans poverty team to provide much more regular and in-depth technical assistance to Kosovo institutions, especially the Kosovo Agency of Statistics (KAS). The first EFO from DFID funded the Kosovo Statistical and Analytical Capacity Building (SACB) project (P127642), which aimed to improve the quality of survey data and expand the use of survey data for evidence-based policy making in Kosovo. The second EFO financed by DFID was the Kosovo Labor Force Survey Support project (P132962), which is the subject of this completion memo. This focus of this project is supporting the modernization of the annual Labor Force Survey (LFS) in Kosovo, intensifying work that had begun under the Western Balkans PPA and the SACB. DFID contributed GBP 181,000 for the World Bank to carry out a set of activities designed to rejuvenate the LFS in Kosovo, which had not been conducted since 2009. DFID had been providing technical and financial support for the LFS directly to KAS since the second half of 2011. The EFO contribution was intended to continue DFID’s financial support following the closure of its office in Kosovo in late 2012, with the World Bank taking over responsibility for technical assistance on the LFS. The timeframe of the EFO was from November 2012 through August 2013. The main objectives of the agreement were (1) to improve the frequency, quality, and relevance of labor force data collected in Kosovo, and (2) to promote wider use of these data in policy formulation and programming. The identification of specific activities to achieve these objectives was influenced strongly by KAS’s on-going program to improve the LFS, which included regular technical input from DFID, the World Bank, and other development partners through the LFS Stakeholders Group. The activities are also influenced by the World Bank’s past and on-going capacity building efforts with KAS, particularly the Statistical and Analytical Capacity Building project, which also received financial support from DFID. The following set of four activities was planned. These are described in greater detail in the project concept note and EFO agreement. 1 A. Improving data collection B. Documentation of activities to help ensure sustainability C. Updating Methods for Standard Tabulations and Reporting D. Commissioned papers and seminars Throughout the project the PREM team worked closely with the ECA Human Development department, especially the Economics cluster, which is also a major user of Kosovo’s LFS data. The HD team contributed their expertise to the redesign of the LFS questionnaire, and complemented the LFS agenda with qualitative work to understand better the reasons for non-participation in the labor market and unemployment. Outside the scope of this project, PREM and HD were the first users of the new LFS data, addressing the impact of a minimum wage increase that the government was considering. This report summarizes and reviews progress on these activities during the lifespan of the project (September 2012 through November 2013). 2. Summary of Outputs A. Improving data collection The new LFS in Kosovo introduced many innovations, which bring the LFS more in line with the practices used in neighboring countries and in the European Union. One major change was the move to a continuous year-round survey, which yields much more accurate and rich information about labor market patterns. Past practice in Kosovo limited data collection to a few weeks in October or November, which imparted a seasonal bias to the results, and also precluded any inferences about seasonal variations in employment. A second innovation was the adoption of a longitudinal component, through which the same individuals were interviewed each quarter. This captures the dynamics of a person’s employment status, including distinguishing better between long-term unemployment and cyclical unemployment, which may require different policy responses. A third innovation was the introduction of Computer Assisted Personal Interview (CAPI) methods. The CAPI approach helps ensure the proper sequencing of questions during the interview, based on the interviewee’s responses, and also provides for instantaneous quality control and faster processing of the data after the interview is complete. A fourth area in which the 2012 LFS was improved was the use of a new sampling frame, based on the 2011 Population Census. Previous LFSs had to rely on the outdated 1981 Population Census, with a sample listing that was updated from time to time. Finally, the new LFS employed an updated questionnaire, which follows more closely the standards set by the International Labor Organization and Eurostat. In addition to these improvements in the structure, content and technology of the LFS, considerable improvements were made in the implementation of the LFS. One area that stands out is better training of LFS interviewers, especially on interview techniques to obtain more reliable information about the respondents’ recent employment and job search activities. This was reinforced by closer supervision of the interview teams, including random follow-up visits to surveyed individuals to verify that the interview was done and that the information was accurate. Results1: Data quality improved as a result of the project, although it is difficult to quantify this improvement, or to point to a tangible “output” that proves this. Follow-up supervision visits and 1 A summary of results, using the results framework from the project concept note, appears at the end of this memo. 2 analysis of the data reveal a higher level of internal consistency than was achieved previously. A year- round survey requires substantially more resources than the Labor Force Surveys that KAS had previously conducted, which only spanned a few weeks. The new longitudinal component also adds a layer of complexity, as it requires tracking the same individuals over time. That data quality improved despite the much higher demands placed on the LFS team is an important achievement. This is attributable at least as much to the investment in training and supervising interviewers as it is to the improvements in the design of the survey itself. B. Documentation of activities to help ensure sustainability A 2011 evaluation of DFID and SIDA support to KAS highlighted “inadequate documentation of methodologies or procedures used” as a major constraint to the sustainability of progress made at KAS. Under this project greater attention was given to producing, using, and systematically storing clear and comprehensive documentation. This included production of a detailed interviewer manual, documenting the design and programming of consistency checks, specifying the derivation of variables, and recording how variables are re-coded for submission of data to the Eurostat LFS database. It also included structuring the computer code (written in the SPSS/PSPP statistical program) to facilitate replication of analyses in subsequent years, as well as extensive documentation within the program files to explain to new users the methods being carried out. A detailed methodological note on sampling and weighting procedures was also prepared. Finally, an extensive user’s guide was prepared for potential users of the LFS data. The English version of the user’s guide and the methodology note on sampling and weighting are attached. Other documents are available on request (some are only in Albanian). Results: The documentation of LFS procedures and methods improved in both scope and quality. The documentation covered all stages of the data collection and analysis process, from sampling to field work to quality control checks to tabulation of results. Going forward it will be important (a) to ensure that all team members use the relevant documentation, and (b) to update the documentation as needed when and if there are changes to procedures. These should be mutually reinforcing, as users will tend to ignore out-of-date documentation, but if the documentation is used regularly it will become obvious what needs to be updated. The main risk to the updating of documentation not taking place is the limited staff time available on the LFS team in KAS, especially at the level qualified to write good documentation, which takes both skill and time. C. Updating methods for standard tabulations and reporting Because of changes to the LFS, KAS needed to make changes to its standard template for reporting results of the LFS. This was particularly the case because of (a) the adoption of a year-round survey with a longitudinal component and (b) closer adherence to Eurostat and International Labor Organization (ILO) standards. The year-round survey also made quarterly reporting of LFS results possible for the first time in Kosovo, which in turn required development of standard tables for quarterly reports, which are generally not as detailed as annual reports. Under this project, consultants were engaged to develop new customized programs in SPSS/PSPP and ADePT to generate the new set of standardized tables for reporting by KAS. A consultant also provided regular on-the-job training to KAS staff so that they would be familiar with running the tabulation programs. Results: Excellent progress was made on this component, with the creation of a new set of standard tables, including the requisite computer software code to generate similar tables in future years. However, transfer of skills was not as complete as initially hoped, and KAS analysts are likely to require continued external support for at least the next round of the LFS, and possibly a year or two beyond. For 2013 and 2014 this support will come from UNDP in Kosovo and from the World Bank’s regular technical 3 support to KAS. Again, one of the main constraints is the small size of the LFS team at KAS, especially in relation to the much larger workload and data volume associated with the adoption of a year-round LFS. D. Commissioned papers and seminars It was initially planned to commission two or three papers on topics relevant to microeconomic analysis of employment and labor markets. The intent was to provide evidence-based policy guidance to the government and to contribute to the policy debate more broadly, and to help build local capacity in the analysis of labor survey data. Results: As was the case with the companion Statistical and Analytical Capacity Building project (P127642), this proved difficult in practice. One major constraint was the delay in processing the 2012 LFS data, which was not completed until September 2013, after this project had ended. This constraint was compounded by the fact that there was no LFS in Kosovo in 2010 or 2011, so that there was very limited scope for papers based on older Kosovo data. In lieu of the commissioned papers and seminars, the publications and public events focused on the releases of the official results, which are described in the next section. 3. Dissemination and outreach Unemployment is a major economic and social challenge in Kosovo, and the absence of Labor Force Surveys in 2010 and 2011 left a considerable information void on this subject. Throughout the planning and execution of the 2012 and 2013 LFS, the Bank team (including staff from the Country Office and headquarters, as well as consultants) has played a central role in the LFS Stakeholders Group, which is chaired by KAS and includes representatives from government and other donors. To help familiarize users of LFS data with the new approach to the LFS, the companion SACB project dedicated one of its three-day training workshops to the new LFS. The workshop was held in February 2013 and included 13 participants from government, private think-tanks, the Kosovo Chamber of Commerce, and UNDP. It covered methodological changes in the survey, the construction of standard labor market indicators, and other labor market analysis using hands-on exercises. In observance of Labor Day (May 1), KAS and the Bank’s Country Office organized a press conference to announce the LFS results for the first six months of 2012. The press conference was well-attended, and there was extensive coverage in print and online media, as well as television and radio. A larger media event—attended by nearly 100 people, including numerous media representatives—was held on September 30 to present the full results for 2012. The English versions of the six-month and full-year reports are attached. Albanian-language and Serbian-language versions were also produced and distributed, and all are available on the Bank’s and KAS’s web sites. 4. Sustainability and lessons learned Through this task, the Bank and DFID provided a much-needed boost to Kosovo’s regular collection of essential labor market and employment data. The transition to a year-round survey with a longitudinal component is a significant leap forward, as is the adoption of ILO and Eurostat standards for reporting labor market indicators. As originally conceived, this task was designed to help KAS overcome these initial hurdles of resuming and modernizing the LFS, with the aim of KAS being able to carry out the bulk of the work in future years, with more limited technical assistance by the Bank (through the Western Balkans PPA) and other development partners such as UNDP. 4 The main challenges to KAS’s ability to sustain the LFS at its current level—or improve it—are its very limited financial and human resources. The 2010 and 2011 LFSs were cancelled because KAS’s parent ministry at the time, the Ministry of Public Administration, removed the LFS from its budget. In 2012 the LFS field work was subsidized by DFID (separately from its EFOs with the Bank) and UNDP is subsidizing LFS data collection in 2013. Since late 2011 KAS has been part of the Prime Minister’s Office, and for the LFS to be sustainable financially it needs to be included in the regular government budget. In terms of personnel the LFS team at KAS is very small. They have coped well with the enormous increase in data collection requirements and the complexity of tracking individuals for repeated interviews in the longitudinal component, while also improving the quality of the data collected. However, the increased demands of data collection have hindered progress on upgrading their skills for processing and analyzing the LFS data and producing reports. The Bank will continue to support KAS’s LFS team in these areas through the Western Balkans PPA, albeit on a more limited basis. Continued efforts will be required to educate and inform policy makers and the public about employment, unemployment, and labor market conditions in general. For example, there is still considerable public misunderstanding about the important distinction between “unemployment” and “inactivity,” despite numerous efforts by the team to clarify through publications, presentations, and other outreach activities. In the short and medium terms it will be necessary to incorporate a substantial element of public education with the release and discussion of new LFS results, and it will be necessary to strengthen KAS’s capacity in this area as well. Table 1: Results matrix (from results framework in project concept note) Immediate Outcome Indicator Activities Client capacity Monitoring & Evaluation  Improvements in data collection methods increased capacity increased  Improved documentation and regularization of methods and protocols  Adoption of ILO and Eurostat standards for reporting labor market indicators  Training of KAS staff on producing standard tables and other statistical output Policy/strategy Public debate  Workshop for analysts and other users of LFS data informed stimulated/initiated  Publication of LFS results, with strong media outreach, including op-eds by the Country Manager Development financing Existing operations informed  Generated labor market indicators for SEDPO informed (employment services DPL) Attachments (also filed in WBDocs) - LFS User Documentation - Sampling and weighting methodological note - LFS Reports: (a) first six-months results, (b) full-year results 5 6