Technology is touted as both savior and saboteur of young people’s futures. It is capable of opening opportunities once undreamed of by helping young people to transcend the physical, social, and economic barriers that stand between them and a decent job. At the same time, advances in automation and artificial intelligence could combine to see two thirds of workers worldwide replaced by machines.
The economy of the Democratic Republic of Congo is not creating sufficient jobs for its young and rapidly growing workforce. Although the Congolese economy has experienced fast growth and poverty has declined, further reducing poverty will require more dynamic job creation and continued reductions in fertility rates. The current youth bulge and potential demographic dividend will open a unique window of opportunity but will demand faster job creation.
Value chain (VC) studies allow us to provide an in-depth understanding of the interrelationships among firms that operate in a supply network and of the factors that determine the structure, dynamism, and competitiveness of these chains. Although most approaches to value chain analysis provide a limited focus on the nature and structure of jobs in these chains, the Jobs in Value Chains survey toolkit discussed in this guide will help illuminate the number of jobs, where they are located in the VC, and the extent and nature of relationships among actors in a VC.
This report focuses on the challenge of Mozambique’s jobs transition: how to accelerate the shift into higher value-added activities and better livelihoods. As Mozambique enters the next phase of the demographic transition, the working-age population (WAP) is growing rapidly.
The recent oil and gas discoveries in Ghana present a unique opportunity to boost economic growth and increase prosperity. These discoveries created high expectations for a significant positive impact on the Ghanaian economy and people through job creation, particularly through small and medium enterprises (SMEs). However, among resource-rich countries there are examples of both successes and failures in the utilization of resource-generated wealth. The impact on the Ghanaian economy and society will depend on the policies implemented moving forward, including those associated with the use of the government oil revenues. This study discusses impacts observed to date, potential implications, and likely growth scenarios from 2015 to 2030 linked to several policy choices.
Recent oil and gas discoveries in Ghana present a unique opportunity to boost economic growth and increase the prosperity of its people. With support from the World Bank Group, the Ghanaian government engaged with international private sector partners in the exploration, development and operation of world-class hydrocarbon discoveries in the Jubilee, TEN, and Sankofa fields.
Between 2007 and 2017, 99 countries initiated reforms in labor regulations that affected World Bank Doing Business labor indicators. The most common topics for reforms are (i) procedural requirements in case of contract termination, and changes in notification arrangements; (ii) fixed-term contracts; (iii) severance payments; (iv) annual leave arrangements, and (v) working time arrangements.
This report was authored by the members of the Jobs Umbrella Multidonor Trust Fund (MDTF) Team, David Robalino, Fareeba Mahmood, Siv Tokle, Alvaro Gonzalez, Sonia Madhvani, Vismay Parikh, and Emily (Beibei) Yan.
The World Bank in collaboration with the Tanzania Social Action Fund (TASAF) conducted an assessment on the constraints and opportunities faced by non-farm household enterprise owners when starting and growing a business. The report highlights the findings from two applied methodologies namely a qualitative toolkit and a quantitative analysis.
Economic growth depends on skills being put to productive use. In recent years, research on labor outcomes and education shows that there is a substantial mismatch between the supply and demand for skills around the world (Cappelli, 2014: McIntosh and Vignoles, 2001). This mismatch affects more than just wages or individual job satisfaction.
This paper finds that skills constraints – related to a broad set of skills - have an effect on job creation and labor market outcomes in Kenya. Most seriously, skills shortages negatively impact recruitment and have been identified across a broad set of socioemotional skills and cognitive skills that are necessary for any occupation.
This study follows on other IFI initiated impact studies like the PIDG-commissioned study on the Bugoye power plant in Uganda and the study on Powerlinks transmission in India/Bhutan conducted by IFC. This report explains how the impact of IFI investments in Philippine power generation largely travels through its effect on electricity price. Unlike the situation in a number of other emerging markets (notably in Africa) where demand (far) outstrips generation capacity, power supply in the Philippines has historically been able to satisfy demand, albeit at prices which likely constrain demand. Residential electricity consumption depends much more on income than on electricity price (i.e. is elastic with respect to income and inelastic with respect to price). In most commercial sectors electricity use is also rather price inelastic because it constitutes a fixed production cost. In the manufacturing sector, however, electricity is largely a variable cost and electricity consumption has thus been found to be more price elastic. For that reason and because the manufacturing sector is responsible for about a third of electricity consumption, this study focusses on the marginal price decreasing impact of IFI-attributable power generation and thereby on increasing manufacturing sector output. Apart from a direct increase of value added (incomes), more manufacturing output also requires other sectors to increase their output and value added (incomes), which in return will increase electricity consumption, thereby increasing electricity prices.
This study sets out the pathways through which improvements in the availability, affordability and reliability of electricity supply impact on businesses and households. Specifically, it evaluates whether IFC investments into power generation and distribution have helped sustain jobs and incomes in Turkey. IFC is supporting private sector investment in the power sector in Turkey. The organization has exposure both in power generation and distribution. Since 2008, it has provided USD 1,816 million in (A, B and C) loan capital and invested USD 170 million equity capital. A total of USD 1,666 million loan capital went to four generation companies (Enerjisa Enerji, ACWA, Akenerji, and Rotor Elektrik) while the entire equity investment was made into a sixth generation company (Gama Enerji). The distribution company SEDAS received USD 150 million loan capital (and an additional USD 90 million sourced from international banks). IFC has financed plants with a total installed capacity of 6,109 MW of which 3,053 MW are currently operational and the remainder is under construction.
Today, more than half of Haiti's population calls cities and towns their home, in a major shift from the 1950s when around 90 percent of Haitians lived in the countryside. Urbanization is usually paired with economic growth, increased productivity, and higher living standards, but in Haiti it has taken a different course. Potential benefits have been overshadowed by immense challenges, all of which require immediate action. To better understand the factors that constrain the sustainable and inclusive development of Haitian cities, this Urbanization Review organizes the challenges along three dimensions of urban development namely planning, connecting, and financing. Planning reviews the challenges in supporting resilient growth to create economically vibrant, environmentally sustainable, and livable cities. Connecting focuses on the obstacles of physically linking people to jobs and businesses to markets, while financing focuses on identifying the key capital, governance, and institutional constraints that are hurdles to successful planning and connecting.
Almost one in 10 of the world’s population, 679 million, are children younger than five years old. To thrive and develop, these children and their older siblings need care. Yet in many parts of the world, childcare remains scarce. Globally, just over half of the children under age five benefit from a preschool program. Formal childcare is often outside the reach of low- and middle-income employees. For those who can afford it, available options are often limited and poorly aligned with full-time working hours. Access to care is particularly lacking for children younger than three. For employers, the lack of good quality and affordable childcare for their employees can translate into higher turnover and absenteeism, lower productivity, and difficulty recruiting skilled employees. This is because the unavailability or unaffordability of care affects the choices that parents make regarding the type of work that they do, whether they stay at home, or how they combine work with care. For families, gaps in access to quality care can mean less paid working time and lower household incomes.
Participation in a Global Value Chain (GVC) can create more jobs through a structural transformation, and potential jobs spill overs from strengthened backward and forwardlinkages. GVCs can also have a positive impact on jobs for women. Evidence shows a disproportionateshare of jobs in labor-intensive chains benefiting women.Jobs in GVCs are better jobs because of higher wages and better working conditions, as domestic firms seek to comply with global standards to participate. However, these above mentioned labor market outcomes being achieved depend on several parameters, such as the sector of operations, level of firm operation, and existing distortionsin the labor market. But evidence for GVC participation leading to better jobs is strong at the firm level, given the win-win business case through higher productivity, efficiency, and profits.The jobs outcome through GVC participationcan be strengthened through focusing on GVC upgrading strategies, implementing and strengthening private standards, improving national regulations, and strengthening monitoring and evaluation of impact of GVC operations.
Digital technology is transforming the organization and location of production, and thus the future of work. It risks widening the gap between richer and developing countries, and between the better skilled and connected and the poorer population groups within countries, who stand to bear the brunt of the adjustment. But technology also creates opportunities (leapfrogging), to generate jobs, increase earnings and be more inclusive. To take maximum advantage and counter the threat of rising global inequality, developing countries need to address bottlenecks in technology access, invest in skills and create an enabling environment.
The Jobs M&E Toolkit provides a package of resources for project teams and clients to support mainstreaming the Jobs Agenda in World Bank Group (WBG) lending operations. The aim is to help teams working with government counterparts with simple tools for data collection on jobs, without the burden of resource-intensive survey efforts. The toolkit contains a set of guidance on indicators for key results on jobs, data collection forms and manuals, which are tailored by beneficiary type: individuals and firms. The availability of measurable indicators should encourage a more systematic assessment of jobs outcomes. The Jobs M&E Toolkit provides resources to be used throughout the entire project cycle. It is best applied ex-ante in the design of projects and their M&E systems, so that data collection can support implementation progress and reporting from the outset. Regular monitoring and data availability will underpin project completion to assess achievements in job results ex-post. The indicators and data collection forms may also be useful for related mid-term, final or impact evaluations. The resources made available through the Jobs M&E toolkit have been developed by the WBG's Jobs Group in a consultative process. The menu of indicators and related guidance were generated through a portfolio review of WBG projects and in consultation with Task Team Leaders (TTLs) from different Global Practices (GPs). Further, data collection manuals were developed using existing resources from Labor Force Surveys, enterprise surveys and different surveys developed by the WBG. Moreover, the Jobs M&E Toolkit is currently being piloted in a number of WBG operations, with feedback from project teams helping to revise, adapt and refine the toolkit.
Training is one of the main ways that the Nepal government intervenes in the labor market. This descriptive study documents patterns, trends, correlates, and the labor market effects of formal off-the-job training of youth, based on national household survey data. Training rates in Nepal tend to be higher than in other South Asian countries. Within the country, rates are higher for traditionally advantaged groups. While both short- and long-term training programs are available, most programs are short-term. Training is associated with a higher likelihood of employment, wagework, and nonfarm work for women but not for men. Training does not appear to be associated with wage earnings for either gender. Interest in training runs high, especially among traditionally disadvantaged groups, and among those who are currently employed or have previously obtained training. Little rigorous evidence is available for Nepal to inform the extent and nature of public intervention in the training market. The study concludes by offering suggestions for future, policy relevant research.
This paper applies a newly-developed survey instrument to assess the structure and dynamics of jobs in the potato value chain of North Lebanon. The analysis finds that while on-farm activities represent the largest source of jobs in the value chain, most of these are low-skilled, low quality jobs taken by seasonal workers, offering limited opportunities for young Lebanese workers. The best opportunities to develop high quality jobs would come through investment in downstream processing, which would have a spillover effect also on expanding lower-skilled jobs across the chain. Taking advantage of this opportunity will require addressing significant constraints in the trade and investment climate in North Lebanon.
This paper develops a general framework to inform the design of a new generation of jobs lending operations. The paper discusses the rationale for developing jobs focused lending operations with specific targets in terms of job creation, job quality, and labor markets outcomes for vulnerable population groups. It reviews the current portfolio of jobs-flagged lending operations, discusses the limitations of existing interventions, and outlines options to optimize countries lending portfolios and develop new, integrated, jobs lending operations on the basis of jobs diagnostics and jobs strategies. The paper provides examples of innovative projects that are currently under preparation or implementation, including jobs investment projects that link supply-side and demand side interventions; jobs Program for Results (PforRs), and jobs Development Policy Lending. The final section describes the types of monitoring and evaluation systems that these new projects would require to track jobs outcomes.
The high incidence of informality in developing countries acts as a drag on economic development due to the associated efficiency and equity costs and implied weak governance. Policy makers therefore want to reduce informality. This note presents guidance on policy levers to make formality more attractive and informality less attractive from the perspective of small, medium and large firms, and from the perspective of micro-entrepreneurs. It elaborates the challenges for shifting incentives in favor of being formal and employing workers on formal contracts rather than operating under the regulatory radar, and presents a range of policy options.
This Note systematizes the economic evaluation of Jobs Investment Projects. It explains the limitations of past approaches that have regarded jobs only as a by-product of growth. It focuses on market failures that create a gap between the social and private return on investments and reduce the number of good jobs below the socially optimal level. Two of these market failures are: labor externalities arising from the divergence between the market price and opportunity cost of labor; and social jobs externalities linked to improved jobs outcomes for groups such as youth, women, and the extreme poor. These externalities can amplify other market failures such as learning spillovers and coordination failures. The analysis is integrated within a Cost-Benefit framework, to facilitate decision making around jobs investment programs. The Note discusses applications to different sorts of projects: those that focus on improving the labor supply and labor market matches; those that focus on strengthening firms' demand for labor; and integrated projects, that include both types of interventions.
The high incidence of informality in developing countries implies that many workers are not covered against important risks, such as unemployment, illness and old-age poverty. Given that expanding the Bismarckian system to include informal workers presents many challenges, several countries implemented non-contributory social insurance programs to expand coverage. However, these contributed to labor market segmentation and are unlikely to be financially sustainable. This note reviews the economic literature dealing with the expansion of social insurance programs and summarizes the main policy insights. It draws on international evidence on social insurance system design and innovations, and the resulting impact on coverage. It also provides general design principles that can apply to unemployment benefits, health insurance, and pensions.
Why do some countries create more jobs than others? To consider this question, in this paper we focus on one of the most basic relationships, between growth and employment. In practice, the private sector responds very differently to growth (and decline) across countries. Understanding the patterns and drivers of private sector decisions to expand and shed jobs may be important to guide policy approaches for job creation. This paper analyzes the output-employment relationship in the context of business cycles at three levels: the macro-economy; industry (in manufacturing); and firms. The results highlight major differences in private sector job creation responsiveness to growth across stages of development and economic structures, but a critical finding is that economies (and firms) where formal sector job creation was more responsive to growth cycles generated more jobs overall. In addition, results from both the macro analysis and the sector analysis suggests significant complementarity between capital and labor. Finally, the findings may help to frame a broad policy agenda for job creation, including: macro-economic fundamentals, responsive labor markets, access to finance, competition, and a facilitative business regulatory environment. These are not surprising, but nevertheless frame a set of issues that could be explored in further research.
This report analyzes the World Bank Group (WBG) portfolio in Zambia focused on jobs, referred to as the jobs portfolio, regarding its impact on outcomes related to job creation, job quality, and job access. The review is presented within the context of Zambia’s jobs priorities: more good-quality jobs with traditionally disadvantaged groups benefitting from opportunities to work. It finds that the jobs portfolio is more focused on intermediate-level outcomes related to jobs, such as improving access to markets and firm performance. A range of intervention types contributes to job creation (66 percent of the reviewed portfolio), job quality (47 percent), and job access (51 percent). Activities focused on spatial development in value chains tend to support job creation in the formal sector. Job quality outcomes include enhanced worker productivity in informal agriculture where the majority of Zambians still work. The WBG has primarily supported job access through targeted interventions in lagging regions. Further, the combined portfolios of the WBG and let’s work partners show greater coverage of a range of job quality and job access outcomes. Areas for future support to improve job outcomes include macroeconomic and regulatory support, skills development, and targeted support for vulnerable populations and youth in particular. In addition, projects need to be reinforced by sound monitoring and evaluation (M and E) systems tracking results explicitly related to jobs.
SME’s form a dominant share of the private sector in developing countries, and account for more than 50 percent of jobs in their respective economies. Besides their positive employment effects, the growth and vibrancy of these firms is also important for broader economic growth, diversification of economic base and as a source of innovation that is exhibited by some of the start-ups. Women-owned SMEs are emerging as one of the fast growing segments within the SME sector. Youth play an important role in the creation of new firms and start up activities. Given this importance of SMEs for creation of more, better and inclusive jobs, there is significant focus on understanding the constraints to growth of this sector and implementing programs to address them in the World Bank Group and the other development institutions. Among the several constraints that they face, access to finance is usually cited as the most important and there are several instruments that can be applied to address this constraint. However, what is the evidence of impact of these programs on the employment effects? This note brings together the learnings and evidence from access to finance interventions on employment and provides some recommendations for development practitioners who seek to maximize this objective from their access to finance interventions.
Should public investment be targeted to big cities or to small towns, if the objective is to minimize national poverty? To answer this policy question, this paper extends the basic Todaro-type model of rural-urban migration to the case of migration from rural areas to two potential destinations, secondary town and big city. The analysis first derives the labor income, migration cost and poverty line conditions under which a poverty gradient from rural to town to city will exist as an equilibrium phenomenon. Then sufficient statistics are developed for the policy decisions based on these parameters. The empirical remit of the model is illustrated with long-running panel data from Kagera, Tanzania. Further, the paper shows that the structure of the sufficient statistics is maintained in the case where the model is generalized to introduce heterogeneous workers and jobs.
Despite progress on women’s labor force participation in the past few decades, there remain persistent gender gaps across multiple dimensions of job quality. Women generally earn less than men. Gaps are particularly acute in the Middle East and North Africa but also persist in high income Organization for Economic Co-operation and Development (OECD) countries. Women tend to be concentrated in less productive jobs, run enterprises in less productive sectors, and are more likely to do part-time and temporary jobs with fewer avenues for advancement, than men. Women are particularly concentrated into the more invisible activities, such as domestic labor and unpaid work or work in the informal sector in jobs that lack security and are not covered by labor laws. In other words, there are persistent gender gaps not only in labor force participation rates or the quantity of jobs, but perhaps more importantly, in the quality or types of jobs that men and women do. Having access to quality jobs which are stable, decent, secure, and productive is even more important from a gender perspective because women are more likely than men to be over represented in low paying, part time, informal, and low productivity jobs. This paper explores the multiple dimensions of women’s access to good quality jobs, factors contributing to gender gaps, and possible solutions or actions that have worked in different countries.
Sierra Leone is a relatively small economy with potential for jobs-rich growth. It is an extremely poor nation with
substantial mineral, agricultural, and fishery resources. Nearly half of the working-age population engages in
subsistence agriculture. Alluvial diamond mining remains the major source of hard currency earnings, accounting
for nearly half of exports. However, the anticipated job-rich recovery is unlikely to be realized simply from the
continued exploitation of the minerals underneath Sierra Leonean soil. This Jobs Diagnostic of Sierra Leone is a first, modest, but necessary, step to formulate that focused effort to create good jobs. It provides a better understanding of the job creation performance of the economy. It identifies the major problems that hold back the economy from creating good, formal-sector jobs that will lift people out of poverty and get them on the road to upward mobility.
The Jobs Diagnostic begins with a look at the jobs creation performance of the economy. It then provides an
examination of the labor supply—the state of the present and future workers and entrepreneurs. Finally, this
diagnostic looks at job performance of firms—the potential employers and job creators
This Jobs Diagnostic presents the characteristics and constraints of the labor market in Bangladesh, identifies the objectives of the jobs agenda, and proposes a policy framework to progress toward them. This multisectoral diagnostic assesses the relationships between supply- and demand-side factors that interact to determine job creation, quality, and inclusion outcomes. Understanding the factors that influence jobs outcomes requires a holistic approach capturing issues such as access to markets, inputs, capital, technology, skills, and matching of supply and demand. Standard labor analysis tends to miss crucial aspects of the demand side of job creation, while growth diagnostics have no direct link to jobs. The Jobs Diagnostic thus intends to provide the comprehensive evidence base to support the development of a national jobs strategy that focuses on policies to foster an environment for more, better, inclusive jobs in Bangladesh.
This report provides an assessment of constraints and opportunities for the creation of more and better quality jobs for Lebanese in the more fragile and conflict-affected regions. The geographical focus is North Lebanon, including Tripoli. This analysis, accompanied by further dialogue with the key public and private sector professionals, can serve to inform the design and development of a jobs-focused program of financial support for North Lebanon. This diagnostic and program development approach can also be replicated in other high-priority, lagging regions of the country. The diagnostic followed a three-pronged approach in order to assess the gaps that need to be overcome to respond effectively to job opportunities, foster productivity, and increase earnings: 1) an assessment of the investment climate in North Lebanon; 2) a value chain analysis (VCA) of selected sectors and the interventions required to unlock competitiveness and job creation; and 3) a review of the supply of labor and skills in the region, a stock-taking of training providers.
An additional 600 million new jobs will be needed by 2020 due to global population growth. The private sector, which currently provides nine out of then jobs in developing countries will be critical to meeting the challenge. IFC, a member of the World Bank Group, promotes private-sector led growth to help people escape poverty and boost shared prosperity. As part of this, IFC provides both investment and advisory services to financial institutions (FIs) in India, to expand access to finance for local micro, small and medium enterprises (MSMEs), support the growth of their businesses, create new jobs, and, with this, contribute to the country’s economic growth.
One of the world’s most youthful countries, Zambia’s economy has been booming since the early 2000s on the back of record high copper prices and private sector investment response to the better business environment. But poverty rose from 2010 to 2015 and remains very high in rural areas. Economic transformation is underway with workers moving to off-farm jobs, but these are heavily skewed in the capital Lusaka and in the Copperbelt, are mostly informal, and aside from jobs on the commercial farms, good waged are inaccessible to large groups of rural Zambians, especially women and youth. As labor has started moving out of agriculture into industry and especially into services, productivity and hours worked have fallen on average, especially for young people and those with low levels of education. Better educated people in the upper income quintiles are gaining most from rapid growth in Zambia, with the public sector hiring a substantial share of better educated Zambians and paying them more for a given level of education. The majority of Zambia’s rising number of poor people are stuck in low productivity agriculture. This report identifies the main jobs challenges facing Zambia and recommends policies and programs that could reduce poverty and make growth more inclusive by generating more and better jobs for Zambia.
Jobs need to be at the heart of economic development policies in Zambia. Recognizing the role of jobs in making Zambia a more equal middle-income country, the Government of Zambia has prioritized job creation in its Vision 2030 and National Strategy on Job Creation and Industrialization by setting a goal to create one million jobs in key sectors over the next five years. This report has three main objectives. First, it outlines the main challenges to Zambia's jobs agenda at the macro, household, and firm levels. Second, it takes a closer look at jobs at a sectoral level, with a focus on agribusiness value chains that illustrates the potential for job creation in high-potential sectors. Lastly, it presents a set of policies that may be prioritized by policymakers as part of implementing a jobs strategy through creating more formal sector jobs, improving the quality of informal sector jobs, and connecting vulnerable population groups to jobs.
This study analyzes from a jobs perspective two high potential value chains (VCs) in Zambia’s agribusiness sector poultry and aquaculture. With more than 50 percent of workers and over 80 percent of poor Zambians recording themselves in agriculture in the 2010 population census, raising agricultural productivity is a determinant to reduce poverty. Yet small-scale farmers (SSFs) and modern commercial operations in large farms exist in parallel, as SSFs typically use backward production systems with scant capitalization. Zambia’s challenge is to overcome the persistent disconnect between low productivity smallholder agriculture and high productivity modern agribusiness firms. Developing market linkages will enable the agribusiness sector to meet the growing urban demand for food products, while connecting more people to jobs.
Kosovo's economy experienced strong growth over the past decade. Has growth translated into robust job creation? Do those in the bottom forty percent of the population have access to employment opportunities that can translate into sustainable shared prosperity? This report seeks to provide an integrated analysis of the demand-side and supply-side constraints to job creation and employment; and highlighting salient issues like informality and skill mismatches. Bringing together evidence from a number of data sources, including surveys of household budgets and labor force, as well as firm-level panel data and a specialized survey capturing the employers' assessments of demand and supply of skills in Kosovo, the report tries to provide evidence to argue that reforms aimed at adopting the right set of rules, and developing the right set of skills, to promote job creation, will be vital to reduce inactivity and youth disenfranchisement, and to productively employ the demographic dividend.
Kazakhstan is a unique country in a unique part of the world. Its uniqueness is important, as it shapes the opportunities and economic realities faced by the country, as well as the political responses to those challenges. Since independence in 1992, Kazakhstan has made rapid progress in transitioning to an upper-middle income country. This sustained growth has enabled Kazakhstan to achieve rapid reductions in poverty. This note draws on a large body of recent and ongoing analyses carried out by the World Bank, the Government of Kazakhstan, and other partners. The strategy, in turn, aims to enhance the impact of the government’s policies, programs, and projects on the availability, diversity, quality, and sustainability of jobs. The remainder of the note is structured as follows: Section 2 provides a detailed review of the state of jobs in Kazakhstan, reviewing recent progress and analyzing the nature of the challenges around self-employment; Section 3 introduces a framework for thinking about a jobs strategy in Kazakhstan, and provides an initial overview of the current situation and government response along each of its dimensions, as well as some potential policies for consideration; and Section 4 concludes.
This note presents a detailed analysis of jobs in Kazakhstan at the macro and individual levels, including regional and socio-economic disparities. At the macro level, it includes a diagnostic of the links between economic growth, jobs, and productivity across different economic sectors. At the individual level, the analysis focuses on labor market outcomes of women and men, young and adult workers, residents of urban and rural areas, and people in the bottom 40 percent of the consumption distribution. It also presents a detailed analysis of determinants of employment and wages. The rest of the note is organized as follows: section two discusses the relationship between economic growth, jobs, and productivity across different economic sectors. Section three discusses demographic trends and overall labor market outcomes. Section four focuses on assessing spatial and sectoral differences in access to jobs, including for those in the bottom 40 percent. Section five concludes with a discussion of challenges and broad policy implications.
Labor Market Observatories are institutions aimed at producing systematic information on labor market conditions in order to help labor market actors make informed choices leading to better alignment between skills demand and supply.
The case study illustrates that better working conditions can be a business case, even in highly competitive sectors with low margins, such as the garment sector in Bangladesh. DBL, a vertically integrated knit garment manufacturer in Bangladesh, faces stiff regional competition from companies that are able to use their workforce more effectively. To bridge the worker productivity gap, DBL adopted good and safe working conditions by investing in building, fire, and electrical safety and providing employees with loyalty incentives. The interventions led to lowered absenteeism, higher employee satisfaction and decreased staff turnover, which resulted in higher employee productivity and long term cost savings for DBL. In combination with training programs and resource efficiency measures, these effects have led to less downtime, increased wages and the strengthening of DBL’s competitive advantage in the market. The results have allowed DBL to pay higher wages than the industry average and enabled DBL to further invest in better working conditions. The experience of the DBL group highlights that sometimes small changes can lead to substantial business impacts.The case study is a result of DEG’s evaluation work regarding the development effectiveness of the transactions it co-finances.
Let’s Work, in close collaboration with the World Business Council on Sustainable Development (WBCSD), compiled a series of case studies that demonstrate how companies – who work with the public sector and educational institutions – can play a vital role in increasing the skills and employability of thousands of job market entrants and seekers. When investing in emerging markets, private sector companies are faced with two main challenges: (1) to find employees with the right set of skills and (2) a lack of required quality and quantity of goods and services provided by suppliers. Firms can benefit from a well-trained workforce in more ways than through increased production.The purpose of this exercise was to understand why and how the private sector addresses the constraint it faces of accessing good quality skilled workforce – both as their own employees and also skills in their value chains. The initiatives were categorized into three areas: workforce development, value chain development and community development.
Tajikistan’s economy is not creating sufficient jobs for its rapidly growing workforce, in particular its burgeoning youth population. As a result, its most valuable asset – human capital – is largely underutilized. Although remittance-driven growth since the early 2000s has led to a steep decline in the poverty rate, poverty remains high. Strong economic growth in the last decade has not resulted from structural transformation that can lead to sustained improvements in the standard of living. Jobs have been created, but these are mainly in low-productivity activities, often in the informal sector. In addition, there are major inequalities in terms of labor market outcomes between population groups and across regions. The report, “Tajikistan Jobs Diagnostic: Strategic Framework for Jobs”, analyzes the main challenges the country faces in creating jobs at the macro, firm, and household levels. It also sets out policy recommendations to enable the country to create more and better jobs that are also more inclusive of women, youth, and other vulnerable population groups.
For a long time, the urbanization and development discourse has coincided with a focus on economic growth and big cities. Yet, much of the world's new urbanization is taking place in smaller urban entities towns), and the composition of urbanization may well bear on the speed of poverty reduction. This paper reviews the latter question within the context of Tanzania.
This study is the result of a partnership between CDC Group Plc, the International Finance Corporation (IFC), and RBL Bank as a contribution to Let’s Work, a global partnership that unites organisations to provide effective solutions to tackle the global jobs crisis. The team would like to thank several individuals who have contributed to this report. Our gratitude goes to the RBL team: Rajiv Janjanam, Nishant Shah, Anshul Swami and Faiyaz Naikwadi. Without their efforts – their provision of data, time, and information, their follow-ups, coordination and multiple reviews – this study would not have been possible. The team is also grateful to the SME clients of the bank who took the time to share their stories.
The World Bank Group considers infrastructure development to be critical to achieving economic growth, reducing poverty and addressing broader development objectives, such as access to basic services, improved country competitiveness and broad-based inclusion of the poor and marginalized. Within this context, support to infrastructure development is a key strategic priority to the International Finance Corporation (IFC). Specifically for the significant seaports sector, IFC’s active projects comprise 52 projects in 20 countries with a total commitment of USD 2.2 billion in own account financing. Seaport developments1 (greenfield developments or port expansions) may improve connectivity, increase port productivity, and add traffic capacities. As such, the projects may have an economic impact not only through the direct development and operation of the port, but may have second order effects such as allowing for increased traffic volumes and also cheaper and faster transport.
After a decade of crisis and stellar economic growth over the past five years, Côte d’Ivoire has now set its sight on becoming an emerging economy. Improving prospects for productive employment will be essential for socially sustainable growth and poverty reduction. The "Cote d'Ivoire Jobs Diagnostic: Employment, Productivity, and Inclusion for Poverty Reduction" report provides a comprehensive and multi-sectoral empirical analysis of employment challenges and opportunities to inform strategies and policy actions in Côte d’Ivoire. The report aims to expand policy discussions on employment from a focus on the number of jobs and unemployment to a broader attention on the quality, productivity and inclusiveness of jobs. It makes the case for a jobs strategy with a sharper poverty lens that would focus on raising labor productivity in agriculture and informal off-farm employment to foster structural transformation, while, in parallel, pursuing longer-term goals of expanding the thin formal sector.
This paper estimates the effects of knowledge spillovers on firms' long-term performance and workers' wages. For this purpose, we use the participation in an innovation support program as an exogenous shock to the knowledge stock of non-participant firms. We pinpoint the knowledge diffusion process by tracking the mobility of skilled workers among firms. Combining an employer-employee panel dataset that contains the whole population of firms and workers in Argentina for the period 1998-2013 with administrative data from the FONTAR program, we track the mobility of workers from participant to non-participant firms. To estimate the effect of spillovers we use the panel structure of the dataset using Lag Dependent Variable (LDV) models. We find that firms that hired skilled workers from participant firms increased employment (in addition to the workers from participant firms), the average wage they pay, their exporting probability, and the value of their exports. Consistent with the hypothesis that those effects are due to newly acquired productive knowledge, we provide evidence showing that the effects were driven by firm-level productivity improvements. Finally, we show that a wage premium is paid to skilled workers exposed to the program either by participant (to retain) or non-participant firms (to acquire) depending on the concentration level of the industry of reference. This finding further confirms the hypothesis that valuable productive knowledge is generated through the program and that this knowledge is more extensively diused in less concentrated industries.
To this end, IFC commissioned Oxford Economics (OE) to analyse the economic impact of airports. The report’s purpose is to advise how best to accurately measure and track the economic impact of airports; and to evaluate the effect of IFC’s investments in two case study airports in which it had previously invested: Montego Bay Airport (MBJ) in Jamaica and Punta Cana Airport (PUJ) in the Dominican Republic. The main focus of the project was on quantifying impacts via the airport’s operational activity, the footprint of tourist arrivals and effects on the tradable sector. To do this, we established a Theory of Change (ToC) framework that identified the various channels through which airports support economic activity. It sets out how economic effects stem from the operations of an airport itself, its supply chain and through the wages spent by its employees; and from wider catalytic effects—here most notably from the impact on tourism and trade.
This study sets out the pathways through which improvements in the availability, affordability and reliability of electricity supply impact on businesses and households. Specifically, it evaluates whether more and better power helps create jobs and improve livelihoods.
In this study a framework is developed to quantify job creation due to investments in renewable energy (RNE) infrastructure. The framework has been applied to two PROPARCO-financed case studies: Polesine in Uruguay and Azure in India. Using the results of the two case studies as well as four other studies conducted by Let’s Work partners (IFC, CDC and DFID’s Nigerian Infrastructure Development Facility) an online toolkit has been constructed with which GDP and employment effects can be estimated for 120 countries in PROPARCO’s investment universe. Because the six case studies on which the toolkit is based encompass a wide range of different economic and power conditions, the toolkit produces dependable ex-ante estimations of the impact of new investments. The toolkit can henceforth contribute to investment decision making and strategy development effective immediately. When more detailed case studies become available and are integrated into the toolkit, the reliability of the estimations will improve further. Hitherto power and RNE investments decisions have been based mainly on financial risk & return projections and a climate footprint assessment. The GDP and employment estimations from this toolkit enable the inclusion of the development impact perspective in the investment process.
Review of activities financed by the Let's Work Partnership for the year 2016.
Worldwide, more than 200 million people of working age are unemployed. Over the next 15 years, on account of population growth and demographic change, 600 million additional jobs need to be created to keep current employment rates stable. It is the aim of the initiative “Let’s Work” to provide effective solutions to the global jobs crisis, by harnessing the potential of the private sector to create more and better jobs in emerging and developing countries. In that spirit, this report – which takes the perspective of practitioners from the private sector – has the following objectives: (a) to demonstrate that there can be a business case for private sector enterprises in emerging and developing countries to tackle skills gaps, and that there can be a win-win situation for companies and society; (b) to present good practices, and examples of their application, by and for private-sector companies on three different levels: the current and prospective workforce, along the value chain, and in the local community; (c) to present and showcase hands-on methods for assessing the costs and benefits of initiatives to bridge skills gaps; and (d) to provide concrete recommendations for identifying and addressing skills gaps step-by-step, by means of a practitioners’ guide based on good practices that are applicable in various sectors and regions.
Review of activities financed by the Let's Work Partnership for the year 2015.
This paper investigates the impact of tourism policy on employment, using the Tourism Development Policy (TDP) implemented in the Argentinean province of Salta during the years of 2003 to 2010 as a case study. Following the Synthetic Control Method for comparative case studies, we use a combination of non-treated Argentinean provinces to construct a synthetic control province which resembles relevant characteristics of Salta before the TDP implementation. Given the dual focus of the evaluated policy – one specific sector in one province – we also construct a synthetic control for the tourism sector using a combination of other sectors for Salta, and other sectors from other provinces. This novel approach based on multiple dimensions of the donor pool allows us to test the robustness of the estimated impact. We find that TDP implementation increased tourism employment in Salta by an average of 11 percent per year, for an overall impact of around 112 percent between 2003 and 2013. The analysis also suggests that larger impacts of the TDP occurred from the second to the seventh years after policy implementation. Results are robust across a series of placebo tests and sensitivity checks.
This paper studies the impact of the Brazilian Arranjos Productivos Locais (APL) policy, a cluster development policy, on small and medium enterprises’ (SMEs) performance. Using firm-level data on SMEs for the years 2002–2009, this paper combines fixed effects with reweighting methods to estimate both the direct and the indirect causal effects of participating in the APL policy on employment growth, value of total exports, and likelihood of exporting. Our results show that APL policy generates a positive direct impact on the three outcomes of interest. They also show evidence of short-term negative spillovers effects on employment in the first year after the policy implementation and positive spillovers on export outcomes in the medium and long term. Thus, our findings highlight the importance of accounting for the timing and gestation periods of the effects on firm performances when assessing the impact of clusters policies.
This paper studies the effect of government- backed partial credit guarantees on firms’ performance in Colombia. These guarantees are automatically granted by the National Guarantee Fund (NGF) to firms without enough collateral to lift their credit constraints. We put together a panel of firms covering the period 1997–2007 that allows us to control for observed and unobserved firm characteristics potentially affecting both the selection of firms into the program and firms’ performance. We find that firms that gain access to credit backed by the NGF were able to grow in terms of both output and employment. However, we do not find any effect on productivity, wages, or investment.
Review of activities financed by the Let's Work Partnership for the year 2014.
The Private Infrastructure Development Group (PIDG) seeks to understand the impact of the projects it supports and to this end commissioned ODI to conduct a pilot study of the job creation impact of the Bugoye Hydro Power Project (BHPP) in Uganda. The purpose of the study is to enable the PIDG to understand the impact that the project has had on jobs and to help develop a methodology for similar studies on other projects. The study was undertaken between November 2012 and January 2013, including a visit to Uganda. Bugoye Hydro Power Project (BHPP) is a 13 MW run-of-river hydro plant, located in Kasese District, western Uganda. The plant is owned and operated by TronderPower Ltd (TPL), who are in receipt of a 15-year loan from the Emerging Africa Infrastructure Fund (EAIF) amounting to US$ 31.7 million. Equity investment by Norfund and TrønderEnergi, the shareholders of TronderPower, totals US$ 19.7 million. The Government of Norway provided a grant of US$ 8.9 million to Uganda to construct the transmission line that links BHPP to the national grid. BHPP began operating in October 2009, ahead of schedule, and has since supplied a total of 240,536 MWh to the grid. The study assessed the net direct, indirect and induced employment effects of the project, following an approach modelled on a methodology developed by the International Finance Corporation (IFC). This methodology was adapted to the circumstances of Uganda and of the project, in particular to take account of limitations in the quality and availability of data.
This article evaluates the effect of the Argentinean Support Program for Organizational Change on employment and wages. The program aimed at increasing small and medium-sized enterprises’ competitiveness by co-financing technical assistance to support process and product innovation activities. Although employment is not usually the main objective of these types of programs, they are always implemented assuming that they create—or at least do not destroy—employment opportunities. We to test this important assumption. Using a combination of fixed effects and matching, we find that both process and product innovation support increased employment and wages, with a higher impact on employment. In addition, we find that product innovation support had a larger effect on wages than process innovation support. We use a unique data set with information for the population of firms in Argentina from 1996 to 2008 to test this important assumption. Using a combination of fixed effects and matching, we find that both process and product innovation support increased employment and wages, with a higher impact on employment. In addition, we find that product innovation support had a larger effect on wages than process innovation support.
This paper evaluates the impact of the Chilean Supplier Development Program, aimed at improving and stabilizing the commercial linkages between small and medium-sized suppliers and their large firm customers, during the period 2003–2008. We use the panel structure of our dataset to control for observables and time-invariant unobservable factors that affect the participation and performance of firms. We find that both small and medium enterprises and large firms benefited from the coordination efforts. The program increased sales, employment, and the sustainability of small and medium-sized suppliers; it also increased the sales of large firms and raised their ability to become exporters. In addition, we find that the timing of the effect is different for suppliers and large firms. While the effect on suppliers appeared 1 year after the firms enrolled in the program, the effect on large firms took 2 years to appear.