Publications

The Mozambique Agricultural Aggregator Pilot (MAAP) research program investigated how jobs and earnings changed when seven different commercial aggregators worked with contracted growers in farm-based value chains in Mozambique in the period 2017-20. The study covered a range of crops and animal products including: cotton, sugar, maize, chickens, sesame and goats. It measured changes in the net earnings of the smallholders (to quantify the welfare effects for the growers) and the aggregators (to understand the profitability and financial sustainability of the schemes). So, the study provides new evidence on two metrics relevant to the design of public support to commercial aggregators: (a) the amount of the economic gains and their distribution between the commercial firms and smallholder growers; and (b) the marginal profitability of the commercial systems and (thus, implicitly) what subsidy amounts would make their expansion viable.

This report presents the results of the analysis of data collected on workers and clients using
Biscate, a digital labor market matching platform for informal services workers in Mozambique.
The platform aims to facilitate labor market intermediation of workers performing various
household services and clients looking for labor. Informational asymmetries and contractual
uncertainties might undermine both demand and supply of household services in this market.

Mozambique has a low average yield of raw cashew nut (RCN) of 3 kg/tree. The latest census of agriculture in 2015 estimated that 1.33 million households owned cashew trees. Another 30,000 households were involved post-harvest. One-half of RCN production sold was processed in 2015, up from 1/3 in 2008. A large share of cashew exports are raw nuts, mostly “informal” (no tax). In 2017, national production was only two-thirds of 1972, when Mozambique was the world leader in cashew exports. An export tax was imposed on RCN exports in 2001, currently 18 percent of the F.O.B. price, to promote domestic processing. Key challenges for production include replacing aging trees with improved root-stock and stepped-up anti-fungal spraying. Industrial processing now comprises 15 factories employing 17,000 workers, 57 percent of whom are women. Main recommendations are: a multi-stakeholder Platform to periodically review cashew developments; smallholder participation in producer organizations; privatization of seedlings distribution and tree-spraying without subsidies; public and private commercial infrastructure (warehouses, transportation, access roads); accessible international market and technical information; using cashew shells to generate energy; using cashew apple to produce packaged fermented beverages; and a cross-Ministry push on food safety protocols for cashew.

Mozambique had 60,000 hectares of large-scale commercial planted forest in 2009, supporting about 3,000 full-time-equivalent jobs. Very little growth in large-scale commercial planted area has occurred since 2009, unlike what would be required to meet predictions at the time of 1,000,000 hectares planted by 2030. Labor costs are three to four times lower in plantation forestry in Mozambique than in Brazil, South Africa, and Uganda. Yet, unit costs per cubic meter of eucalyptus timber produced in Mozambique are higher due to lower tree volume growth rates, skills gaps, and employee absenteeism up to 50 percent. Yet, deforestation and imports of high-end wood products are rekindling interest in plantation forestry, with recognition of the need for community involvement. Integration of
smaller-scale forestry into community land use patterns is taking off. Recommended actions include: matching grants financed by public resources to leverage private investment and contract farming through community woodlots; empowerment of an independent third-party organization funded by companies to analyze, broker and communicate amongst relevant stakeholders; private sector mobile agroforestry schools for training in remote areas; community land-use plans developed with local stakeholders, delimiting different kinds of land and different rights; and strengthening of community-based organizations that deal with land.

Cassava is the principal starch in Mozambique, at 30 percent of calories. It can be stored unharvested up to 30 months, but fresh cassava lasts only 3 days once harvested. Most processing in Mozambique is artisanal, to eliminate cyanogenic glycosides in the 90 percent of production from pest resistant bitter varieties. Only 6 percent of production in 2011 was used commercially for non-food, two-thirds for feed and one-third for starch. Low levels of productivity for cassava compared to elsewhere and poor transportation ar the main barriers to the development of a processing industry. Unit costs of production range from USD 0.09 to USD 0.30 U.S. cents per kg. Producers would need to achieve 15 tons/hectare to be commercially viable, compared to average yields between 5 and 9 tons/hectare in Mozambique. Actions recommended include: adoption of a "Master Plan "; time-limited subsidies for industrial Hig Quality Cassava Flour, ethanol, and starch; a network of service providers to operate in smallholder areas to deliver improved inputs and extension; promotion of farmers’ associations for better access to service providers; research on pest control in sweet varieties; greater availability of global market intelligence; capacity-building for processing; and introduction of legal norms to prevent processors from polluting.

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.

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.

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.

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.

Bangladesh has made remarkable progress toward poverty reduction and shared prosperity. As recently as 2000, around one in three Bangladeshis was in extreme poverty based on the $1.90 a day poverty line; today, this has fallen to below 13 percent. As in most countries, the vast majority of poverty reduction in Bangladesh over the past decade has been the result of higher labor earnings, and positive labor market developments have been at the center of such progress. Many factors—such as large-scale expansion of employment in man- ufacturing driven by the ready-made garment sector, rapid urbanization, and international labor mobility and remittances—have contributed to positive developments in the labor market, changing the lives of many.

Jobs are central to economic development. Economies grow when more people work, when jobs become more productive, and when workers move to better jobs, e.g. from low productivity farm work into jobs in the modern manufacturing or services sectors, or from remote rural areas to urban centers with greater specialization and more job opportunities. Similarly, living standards improve and poverty declines when individuals move from inactivity or unemployment into jobs, or when workers’ labor income rises.

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.

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.

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.

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.