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Mr. David Coady, Samir Jahan, Baoping Shang, and Riki Matsumoto
This paper provides an overview of the design of means-tested Guaranteed Minimum Income schemes, which constitute an important component of social protection systems in European countries. It discusses how key design features differ across countries, including how countries balance the primary objective of poverty alleviation against the desire to both manage the work disincentives inherent in such programs and contain fiscal cost. The analysis finds a clear trade-off between both concerns in practice, with many countries combining low generosity with low benefit withdrawal rates (BWRs) thus prioritizing employment incentives over the primary objective of poverty alleviation. Many countries can reduce this trade off by combining higher generosity with higher BWRs. Countries with very high BWRs should consider reducing these, including through allowing income disregards and time dependent (rather than income-dependent) benefit withdrawal. The work disincentives associated with higher BWRs can also be attenuated through strengthening complementary activation policies that incentivize and support participation in the labor market.
International Monetary Fund. European Dept.

decomposition of factors underlying recent trends in FLFPRs indicates that the impact of recent activation policies has been uneven . Specifically, activation policies seem to have induced a significant increase in participation amongst women with primary education or less ( Figure 5 ): while the share of women with primary education in the female labor force decreased substantially, their participation rate went up significantly, possibly induced by measures such as tightened access to benefits and participation requirements in the public works program. At the other end of

Mr. Francesco Grigoli, Zsoka Koczan, and Petia Topalova
Despite significant headwinds from population aging in most advanced economies (AEs),labor force participation rates show remarkably divergent trajectories both across countries and across diferent groups of workers. Participation increased sharply among prime-age womenand, more recently, older workers, but fell among the young and prime-age men. This pa-per investigates the determinants of these trends using aggregate and individual-level data.We find that the bulk of the dramatic increase in the labor force attachment of prime-agewomen and older workers in the past three decades can be explained by changes in labor mar-ket policies and institutions, structural transformation, and gains in educational attainment.Technological advances such as automation, on the other hand, weighed on the labor supplyof prime-age and older workers. In light of the dramatic demographic shifts expected in thecoming decades in many AEs, our findings underscore the need to invest in education andtraining, reform the tax system, reduce early retirement incentives, improve the job-matchingprocess, and help individuals combine family and work life in order to alleviate the pressuresfrom aging on labor supply.