Governments Should Strengthen Public Employment Services, say IDB, OECD, and WAPES

WASHINGTON — Governments play a key role in strengthening labor markets' resilience through employment services, but expanding their capacity to address persistent gaps will be critical in an era of increasingly frequent shocks.

Only 38% of countries provide a full portfolio of Public Employment Services (PES), including both income support and labor market programs, underlining a persistent gap between expanding mandates and delivery capacity, according to the new World of Public Employment Services 2026 report, which examined nearly 80 countries.

The report was produced by the Inter-American Development Bank (IDB), the Organisation for Economic Co-operation and Development (OECD), and the World Association of Public Employment Services (WAPES). These institutions call for a more proactive, connected, and accessible PES ecosystem. This efforts includes strengthening engagement with employers, expanding outreach to underserved populations including through partnerships with social economy entities, investing in staff and digital capabilities and improving co-ordination with social protection systems.

The study underlines that PES can drive more resilient labor markets and are uniquely positioned to respond at every stage of shocks. By absorbing immediate impacts through income replacement and job retention schemes, supporting recovery through rapid re-employment and short-term training, and enabling long-term transformation by aligning skills with structural change, PES are uniquely placed to strengthen labor market’s resilience.

Although public employment services have made strides in digital transformation, progress remains uneven across services and regions. Around 40% of PES report having a data strategy, yet only 31% have attached performance indicators to their goals and measure them. Emerging technologies such as generative artificial intelligence (AI) could help expand service capacity, yet adoption remains limited, with only 4% currently using AI-enabled tools such as chatbots.

PES are now taking on a growing role in implementing labor mobility policies and helping connect workers with employment opportunities. Around 74% now provide services related to migration planning, international mobility or migrant integration, an increase of 29 percentage points over the past decade. These services need to be strengthened to establish stronger data collection, tighter collaboration between PES across countries, and better collaboration with private employment agencies and recruiters.

Additionally, to expand capacity and improve outreach, PES are increasingly working with partners in the Social and Solidarity Economy. These organizations such as social enterprises and co-operatives are helping to deliver core employment services, strengthen employer links and reach disadvantaged and hard-to-reach groups. Nearly half of PES report that such partners provide placement services, while just under 70% rely on them for training provision, highlighting their growing importance in expanding access to employment opportunities and improving labor market integration.